Corporate Manslaughter and Corporate Homicide Act 2007

The Corporate Manslaughter and Corporate Homicide Act 2007 is a landmark in law. For the first time, companies and organisations can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care.

The Health and Safety Executive welcomes and supports the Act. Although the new offence is not part of health and safety law, it will introduce an important new element in the corporate management of health and safety.

Prosecutions will be of the corporate body and not individuals, but the liability of directors, board members or other individuals under health and safety law or general criminal law, will be unaffected. And the corporate body itself and individuals can still be prosecuted for separate health and safety offences.

The Act also largely removes the Crown immunity that applies to the existing common law corporate manslaughter offence. This is welcome, and consistent with Government and HSC policy to secure the eventual removal of Crown immunity for health and safety offences. The Act provides a number of specific exemptions that cover public policy decisions and the exercise of core public functions.

The Government's Sentencing Advisory Panel, (SAP), has proposed that those found guilty of the new offence of corporate manslaughter which came into force on April 6 th 2008, be fined up to a maximum of 10% of their annual turnover.

At the launch of a consultation on the new offence they propose that courts should also impose a publicity order on every organisation convicted of the offence to advertise the fact of its conviction.

The order might require publicity on television and local or national press, in trade press and in letters to shareholders or customers!

The SAP - an independent body sponsored by the Ministry of Justice that advises the sentencing guidelines council – believes that comprehensive guidelines are required because Corporate Manslaughter is a new offence and courts will be unfamiliar with publicity orders which are an entirely new sanction in England and Wales.

Under the corporate Manslaughter Act, courts may also impose an unlimited fine along with a publicity and remedial order. The SAP argues that a fine under the Corporate Manslaughter Act should be at a level which is significantly larger than that for an offence under the Health and Safety At Work Act involving death.

For a first offence of corporate manslaughter where the defendant has pleaded not guilty, the SAP proposes a starting point of 5% of annual turnover based on an average taken over three years. After taking into account any mitigating factors the SAP argue that the courts should ultimately arrive at a figure somewhere between 2.5% and 10% 0f turnover or more if there are previous convictions.

To put this into perspective in 2005, Transco were fined £15 million for health and safety breaches which led to the deaths of four members of a family in a gas explosion. To date, this is the largest ever fine imposed under health and safety legislation but represents less that 1% of the company's annual turnover.

The Act can be downloaded here.