The Corporate Manslaughter & Corporate Homicide Act 2007 is an important piece of legislation; but should you be worried?

Published: Auto Retail Network, March 2008

Well, if you run your company well, your shareholders should be able to sleep at night.  If not, and the company causes one or more fatalities, then this legislation is designed to hit companies where it hurts; their balance sheet and their reputation.

From 6 April 2008, companies and organisations can be found guilty of corporate manslaughter or homicide for the first time. The prosecution will need to establish two things:

• Serious management failures which resulted in one or more deaths.
• A gross breach of a duty of care to the deceased, due substantially to these management failures.

What does this mean?

Well, suppose a customer falls down a man-hole that has been left uncovered on your forecourt and dies of their injuries.

If you can prove you run your business really well, with regular Health and Safety inspections, training, risk assessments etc, and this was a one-off mistake, albeit a very serious one, you are unlikely to fall within the Act. 

Likewise, if CCTV shows that the customer themselves, or even vandals removed the cover just before the incident, then you are likely to be safe.

But if the pictures (or any other piece of evidence) prove that it was accepted practice that the man-hole was regularly left open, then be very afraid. Similarly if you run your service operation in a cavalier way, forget to tighten wheel nuts and the car crashes and kills someone, the law will be after you.

What does the law change?

Until now, when a death occurred cases in both criminal and the civil courts could be pursued against directors or other named individuals, if personal responsibility for the chain of events that caused the death or injury could be proved.

The liability of directors and others remains, but now this legislation allows the prosecution of companies, not individuals. Prosecutions will be of the corporate body and penalties have been designed to hurt companies where it matters, in the pocket and to their reputation.

We are convinced that for any early cases, the courts will want to send out a serious message to any company found guilty, as a warning to others. These could include unlimited fines, orders to put their house in order and probably worst of all, publicity orders requiring the company to publish details of the offence and the penalties imposed.

So you need to be prepared and robust in your procedures, the way you communicate responsibility to your managers and staff, and how you treat health and safety for your staff, your customers and others to whom you owe a duty of care. Getting it wrong should not be an option for you.

• Author Guy Liddall is Managing Director of Motor Trade Selection.  Cathy Norton heads up BackupHR, a sister company of Motor Trade Selection

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