New Law on Corporate Manslaughter

Sat, 12 Jan 2008
The Corporate Manslaughter and Corporate Homicide Act 1997, effective April 2008, means that organisations operating fleets can be fined huge amounts of money. In effect, another 'politically correct' tax raising exercise that will particularly affect road transport fleets and companies with large numbers of employees on the road. It also affects publishers of motoring magazines and TV production companies where the essence of 'testing' a car could be held to have led to a road death.

The following information comes courtesy of Virtual Risk Manager – www.virtualriskmanager.net

Recent issues of the Fleet News publication in the UK have included the following headlines regarding Corporate Manslaughter:

Timeline of the Corporate Manslaughter Bill.
DfT push to target fleets.
Crash tragedy a wake-up call to all fleets.
Fleet Alert over work death law.
Eyres case demonstrates fleets’ safety difficulties.
Act may lead to contract review.
Smaller fleets failing to heed Eyres’ lessons.

The aim of this briefing, the first daft of which was written by Lloyds TSB autolease, is to provide practical information on the new UK Corporate Manslaughter (England, Wales and Northern Ireland) and Corporate Homicide (Scotland) Act that takes effect 6th April 2008.

Under the new Act, employers have a Duty of Care to ensure the safety of employees driving for work purposes. The revised legislation makes it easier to prosecute large and medium sized organisations for manslaughter following a work related death.

Put simply, prosecutors will no longer have to identify the single individual, director, or senior manager responsible before they can bring criminal proceedings. The new legislation simply requires that a significant element of the procedure or system failure that caused the incident must be at a management level. It means that senior managers and directors will be more accountable after any fatal work related collision.

Employers must ensure risk assessments are carried out and recorded, followed by auditable measures to minimise and manage the risks to employees.

Although some influential voices suggest this will be a burden to organisations, it should be embraced as an opportunity to improve safety, profitability and employee effectiveness by reducing road crashes, fuel use, insurance, maintenance and fleet costs.

The current law

To secure a conviction currently, the prosecution must identify an individual ‘controlling mind’. This is difficult in large organisations, and to date successful prosecutions have mostly been brought against small companies where the controlling mind is obvious.

The new law

The new Act makes it easier to prosecute companies that fail to protect people. In the event of a work related death, attention will focus on the way in which a company’s activities are organised by senior management (persons responsible for making decisions about, or playing a significant part in, the way their organisation is managed) to ascertain if:

a) These have caused the fatality.
b) They amount to a gross breach of a relevant duty of care owed by the organisation to the deceased.

The Act will not rely on an individual being found guilty of gross negligence and being prosecuted under the Act, but the organisation as a whole, and effects:

All companies and organizations, regardless of size.
Some government departments: including local authorities, NHS Trusts, Police and others (See schedule 1 of Corporate Manslaughter and Corporate Homicide Act 2007).
Partnerships, Trade Unions and employers’ associations.

Penalties for employers

In the event of a conviction the court may impose:

A ‘remedial order’ which will require the organisation to take specified steps to remedy the breach, and ensure adequate health and safety policies and practices are put in place.
A ‘publicity order’ which requires the organisation to publicise the conviction.
An unlimited fine, most likely based on profitability and turnover.

Other areas of potential accountability

Individuals, managers and directors can still be prosecuted under existing health and safety legislation and common law manslaughter. Civil claims may arise against employers where an employee has been prosecuted for negligent driving, and also if an employee is injured whilst driving for business purposes. Potential criminal prosecutions, for example, contraventions of mobile phone legislation whilst driving on business, could also arise.

Advice to fleet operators and their advisors

A range of risk management, training, fleet leasing, legal and other organisations have provided guidance. The following is typical.

Organisations need to able to demonstrate working health and safety procedures in line with all existing Health and Safety legislation to protect themselves from prosecution.

Work related road safety should be incorporated into existing health and safety procedures. Guidance can be found in the publication entitled ‘Driving at Work: managing work-related road safety’ produced jointly by the Health and Safety Executive and Department of Transport in 2003, which has become a minimum benchmark and focuses on risk assessment and management of an organisation’s drivers, vehicles and journeys.

The detailed steps below are widely regarded as best practice:

Identify who the senior managers are, ensuring they accurately reflect the seniority of the role. All senior managers should fully understand their obligations surrounding health and safety at work and their duty of care to improve and enforce it in the workplace. A safe driving committee, comprising operations, HR, OHS, fleet and risk is an effective way to engage senior managers, set up systems, allocate duties to key members of staff and ensure that everything “reasonably practicable” is being done to avoid and reduce risks on the road.

Formal company risk assessments, audits or health checks (examples shown in further information below) should be carried out on both the fleet and individual employees, to identify potential risks and hazards within the organization. This must include all company car drivers, cash takers, employees driving on company business, contractors and associated agencies. These risks need to be evaluated, and written policies and controls implemented to cover or eliminate them. All employees must be made to understand the health and safety policies, and be updated when changes are made.

Maintain appropriate records to demonstrate that vehicles used or provided by the business are legal, fit for purpose, regularly serviced and maintained.

Ensure that the driving licences and insurance arrangements of all employees who drive on business are checked at least annually to assess their eligibility to drive, and identify any potential risk areas.

Put in place accident management procedures to assess all collisions/incidents (business and private) and appropriate corrective action to reduce future risks.

Ensure systems are in place for continual reporting, monitoring, measurement, evaluation and improvement.

Further information

Corporate Manslaughter and Corporate Homicide Act 2007 - www.opsi.gov.uk/acts/acts2007/20070019.htm

Fleet News – www.fleetnews.co.uk

Health and Safety Executive – www.hse.gov.uk/roadsafety

Driving at Work: managing work-related road safety - www.hse.gov.uk/pubns/indg382.pdf

Department for Transport - www.dft.gov.uk/drivingforwork

Lloyds TSB autolease Health Check - www.virtualriskmanager.net/ltsba/health/index.php

Fleet safety audit and benchmarking – www.fleetsafetybenchmarking.net

Virtual Risk Manager – www.virtualriskmanager.net

Comments

Add a comment

 

Ask Honest John

Value my car

Amount to borrow
Sorry. The minimum loan amount is £1000
To pay back over

My credit score

Best available rate 9.20%

Total repayment £9,304.93

Total cost of credit £1,804.93

£155.08

60 monthly payments

Apply now

Representative example

The Representative APR is 13.2% (fixed) so if you borrow £7,500 over 4 years at a rate of 13.2% p.a (fixed) you will repay £199.21 per month and repay £9562.20 in total.

CarFinance 247 Limited is acting as an independent credit broker