Corporate negligence: top of the agenda

Practical Law UK Legal Update 0-385-9550 (Approx. 3 pages)

Corporate negligence: top of the agenda

by Karen Seward, Allen & Overy LLP

The announcement in April 2009 by the Crown Prosecution Service that it has authorised the first ever charge under the Corporate Manslaughter and Corporate Homicide Act 2007 highlights the potentially grave consequences for companies failing to comply with their health and safety obligations to employees.

Perhaps it takes a high-profile alert over swine flu, an easy-to-catch virus with potentially lethal consequences, to focus companies’ minds on the health and safety obligations owed to employees.

The announcement in April 2009 by the Crown Prosecution Service that it has authorised the first ever charge under the Corporate Manslaughter and Corporate Homicide Act 2007 (2007 Act) also highlights the potentially grave consequences for failing to comply with those obligations. Cotswold Geotechnical Holdings has been charged with corporate manslaughter, following the death of one of its geologists when a pit collapsed on him while he was collecting soil samples.

The specific nature of the incident is irrelevant. The prosecution risk will exist for safer occupations in office environments because, under the 2007 Act, companies will be guilty of corporate manslaughter if the way in which senior management organise work activities amounts to a breach of the (exceptionally wide) duty of care and causes death.

The 2007 Act is the culmination of years of policy measures designed to make it as easy as possible to find employers liable for what goes on under their ultimate direction. Penalties include unlimited fines, orders to remedy the management failures that caused the death, and publicity orders giving details of convictions (for more information, see News brief “Corporate manslaughter: new offence comes into force”, www.practicallaw.com/8-381-0927).

The charges do not stop there. Cotswold is also being prosecuted for failing to look after the health and safety of its employees under the general duty in section 2(1) of the Health and Safety Act 1974 (1974 Act). One of the directors has also been personally charged with the common law offence of gross negligence manslaughter (which carries a maximum sentence of life imprisonment) and with an offence under section 33 of the 1974 Act, under which a director will be liable where a criminal offence was attributable to his neglect.

These are sobering developments for employers struggling to think strategically how to plan, for example, for a swine flu pandemic. Significant corporate and personal risks attach to the health and safety of employees and so risk management needs to be high on companies’ agendas. Companies need to be proactive: they will be liable for risks they ought reasonably to have anticipated. This requires them to put in place now the steps needed to prevent or reduce the risk of infection spreading in the workplace in the future. Planning will inevitably reduce exposure to future liability (see box “Health and safety checklist”).

Karen Seward is a partner at Allen & Overy LLP.

See also feature article “Business interruption: preparing for the unknown”, www.practicallaw.com/4-102-3895 and Practice note “Pandemic influenza: is your business prepared?”, www.practicallaw.com/6-386-0329 .

Health and safety checklist

Make sure you are up to speed with any Health and Safety Executive and government guidance: the publicly available knowledge (and therefore the knowledge of risk) increases daily. Implement any recommendations that are published without delay. Review communication mechanisms to ensure you can do this quickly. Obvious commonsense advice like frequent hand washing and avoiding close contact should be already out there in your workplace.
Make sure you are able to direct employees quickly to recommended actions. Have Q and As ready for distribution, possibly now, to raise the level of employee awareness.
Get a direction out imposing on staff a positive obligation to advise you immediately if they have been exposed to a risk of contagion. That notification will then give rise to a positive duty to act on the information provided, so be prepared for the possibility of action.
If you have a health service provider you might consider paying for them to hold a stock of antiviral drugs for possible future use by your staff and their families. Affected staff would be sent to your occupational health provider on falling ill and the drugs would be made available to them after prescription by a doctor employed by that provider. This is a service offered by a number of providers.
Think carefully before sending an employee to any area designated as a danger zone, however temporarily. Work out, if they have to travel to such regions, whether you will need to quarantine them on their return to protect others in the workplace.
Amend your business continuity plan to deal with any future need to keep employees out of the workplace where swine flu has been identified. Work out how face-to-face meetings and travel can be reduced and how you can transfer staff skills and competencies to depleted areas of the business without breaching working time limits.
Find out what insured and other assistance can be made available to allow employees access to specialist advice. Provision for, and access to, those in the know is a legitimate way of delegating at least part of the duties you owe.

End of Document

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Resource ID 0-385-9550

Published on 22-May-2009

Resource Type Legal update: archive

Jurisdiction

United Kingdom