The IoD's View

The IoD was concerned that the then existing law dealing with manslaughter and work acted unfairly against smaller enterprises as compared with large organisations. The IoD's activities also helped ensure that a new law will apply to a wide range of organisations, and that the penalties for breach of the law are to apply to the organisation itself.

Key Points

• A new law, called the Corporate Manslaughter and Corporate Homicide act 2007, comes into effect from 6 april 2008. The term 'corporate homicide' applies to Scotland, but the act covers the whole of the UK.
  
  
• The act applies to all corporate bodies and unincorporated bodies (with some limited public policy exceptions). The IoD lobbied and worked closely with the UK Government (Home Office, subsequently the Ministry of Justice) to help get the new law introduced.
  
  
• There is a link between this law and health and safety good practice. In fact, the act makes reference to official guidance on health and safety.
  
  
• The IoD worked with the Health and Safety Commission (HSC) and Health and Safety Executive (HSE) to produce the current official HSC guidance (also backed by the Health and Safety Executive for Northern Ireland - HSENI) on director health and safety leadership, so it is important to refer to that guidance as a basis for board health and safety monitoring and decision-making. Good health and safety practice should help in all cases.

Q & A

Q. There have been many attempts to get directors jailed for when there have been work-related death. What is the IoD view on that?

A. Apart from the new guidance that has been issued by the IoD and HSC, the IoD has lobbied and worked with the then UK Home Office (subsequently the Ministry of Justice) since the year 2000 on the inadequate position around 'corporate killing'. There had been several high-profile cases of work-related deaths in large organisations, leading to ultimately fruitless prosecutions. That was because courts could not identify a 'controlling mind' ('mens rea' is the legal term used in England and Wales) in those large organisations. On the other hand there had been a number of cases involving smaller enterprises, where it was adjudged possible to do so, and directors found guilty and imprisoned.

The IoD argued that it was right to punish organisations for such serious breach of the law, but that there was not a level playing field when it came to the treatment of large and small organisations. The resulting Corporate Manslaughter and Corporate Homicide act 2007 will make it possible to fine organisations themselves. (The term 'corporate homicide' is specific to Scotland.) The IoD does not support illegal or reckless behaviour and would not seek to avoid prosecution of individuals where that had occurred, but the aim of the new law is to identify organisational failings, and to some extent seek improvement in future performance.

Q. What difference will the new act make to health and safety standards?

A. Following good health and safety practice should help avoid death at work as well as injury. In seeking to help spread the message of good health and safety practice, by working with the HSC and HSE (and backed by HSENI) to produce the new UK-wide official guidance on director leadership on health and safety, the IoD was helping to make that link. The Corporate Manslaughter and Corporate Homicide act 2007 also means that courts will take account of whether boards of directors have followed official safety guidance.

Q. Surely a fine against an organisation is not a deterrent?

A. Loss of reputation can be a powerful deterrent to many an organisation. The act contains provisions for penalties involving possible adverse publicity orders and also having to make some form of redress. In cases where organisational failure has led to such a serious outcome as death, then the IoD considers it correct that an organisation be liable to punishment. That in itself can be a spur to change and improvement to avoid future occurrences. On the other hand, the IoD does not and will not condone reckless, negligent or illegal behaviour by individual directors, in which case it is possible for action to be taken against such individuals.