The Act came into force on 6 April 2008.

Scope of the Act

An offence is committed under the Act if the way in which an organisation manages or organises its activities:-

(a) causes a person’s death and
(b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.

Gross Breach

The statutory definition of gross breach is that it falls far below what could reasonably have been expected.

For the offence to be committed the way senior management organise or manage its activities must be a substantial element of the breach.

Senior Management - a definition

Senior management is defined as persons who play significant roles in (i) the making of decisions about how the whole or a substantial part of an organisation’s activities are to be managed or organised or (ii) the actual managing or organising of the whole or a substantial part of those activities.

Who is liable?

For the purposes of the Act, organisations include corporations, partnerships, trade unions and employer’s associations.

Duty of care - where it applies

A duty of care will apply to a relevant organisation’s employees in connection with supply of the organisation’s goods or services, the carrying out of any construction or maintenance by the organisation, the keeping by the organisation of any plant or vehicle and the carrying on of any other activity on a commercial basis.

A duty is also owed to a person for whose safety any organisation is responsible. In the event of a prosecution, a Judge will make the finding of fact as to whether a particular organisation owes a duty of care to a particular individual.

A jury will decide in relation to whether a gross breach of a duty of care has occurred and will look at whether an organisation has failed to comply with any health and safety legislation relating to the alleged breach.

Importantly, the Act provides that the extent that attitudes, policies, systems or accepted practices within the organisation are likely to have encouraged any such failure or produce a tolerance of failure will also be considered.

Aim of the Act

This is to make it easier to convict organisations whose senior managers have caused death by breaching their duty of care. It does not apply to individuals who can still be prosecuted under existing legislation.

Under the existing offence of gross negligence/manslaughter, a single individual identifiable as the director in the mind of the company has to be found personally guilty.

Penalties

The Act provides for unlimited fines to be imposed and also remedial orders allowing for the Court to order an organisation convicted under the new Act to remedy any management failure that led to a fatality. The Court may also impose a Publicity Order publicising the details of any conviction and the amount of any financial penalty.

The level of financial penalties are currently under review by the Sentencing Advisory Panel but the figures being considered are in the region of 5% of an organisation’s average turnover during the three years prior to sentencing and within a range of 2½ - 10% of average turnover dependent on the presence or otherwise of aggravating and mitigating features.

Risk Management

The following are steps which organisations can take to protect themselves from prosecution:-

1. Consult and follow the health and safety guidelines issued jointly by the Institute of Directors and the Health and Safety Commission and ensure health and safety leadership within the organisation meets the standards set out in that guidance. 
2. Regularly review the effectiveness of safety management systems to see whether adaptation, amendment or change is required.
3. Tackle the health and safety culture within a firm to ensure responsibility is taken throughout the organisation for improving health and safety.
4. Review an organisation’s insurance policy to ascertain whether recoverable legal costs under the new Act can be recovered.
5. Consider instigating an independent health and safety audit of health and safety compliance and management systems. 
6. Plan for incidents and ensure that any such incidents are properly documented. 

Advice on the utilisation of the Act

It is uncertain as to how the Act will be applied at present.

However, should you require advice in relation to the Act then please contact either Andrew Davidson or Tanya Forret on 0113 280 2104. We can advise on questions such as the following:-

• Can a parent company be convicted because of failures within the subsidiary?
• Does the new offence apply to foreign companies?
• Does the new offence apply to subcontractors?
• Does the new offence apply to charities and voluntary organisations?
• What is the position of private companies carrying out exempt functions?

Posted: April 8th, 2008 under Corporate Defence & Prosecution.
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