Massive Fines for Corporate Manslaughter Companies
Jan 1, 2010
After the Corporate Manslaughter and Corporate Homicide Act 2007 comes into force on 6th April 2008 across the UK, companies found guilty may face fines equivalent to 10% of their annual turnover. The biggest fines in health & safety cases are generally currently far lower than 1% of annual turnover. This new level of fines may be enough to put some organisations out of business.
The Sentencing Advisory Panel is currently consulting so as to provide sentencing guidelines on the level of fines. Other penalties may include publicity orders under which an organisation would have to publicise the details of their offence and conviction and any fines raised. Remedial orders may also be possible which would stipulate actions an organisation would have to take to address the conditions that had lead to the offence.
Corporate Manslaughter (Corporate Homicide in Scotland) is a new offence aimed at making the conviction of irresponsible organisations easier. The organisation would be found guilty if there had been a gross breach of the duty of care to a person which had resulted in a death, caused by failures in the management systems, processes and procedures. The courts will focus on the organisation's attitude and culture with regard to health & safety and any breaches of legislation and best practice and how serious these breaches were.
Although the Act introduces a new offence, organisations do not have to meet any new regulatory standards. If the health & safety systems in place are of a good quality and are effectively implemented an organisation should already be doing enough.
This is an ideal opportunity for an organisation to review its risk management processes, systems and the culture lead by its senior managers.
The Act does not allow for the prosecution of individuals, but it is already possible to prosecute managers for gross negligence manslaughter and for health & safety offences. There have been suggestions for companies to check their insurance cover for criminal costs and for criminal costs for directors and officers of the company.
Well managed, competent and compliant companies should have nothing to worry about from this new Act. However, its enforcement should be used as a trigger to review how the systems are being implemented and to check health & safety in the workplace is all it could be.
