Corporate killing legal reforms
contractjournal.com Newsletter: 08.09.05
Corporate killing legal reforms
The guilty verdict against Network Rail for charges of breaching health and safety legislation in the run up to the Hatfield rail crash, has once again put the spotlight on proposed reforms to the law surrounding corporate responsibility.
This follows the decision during the trial to throw out the corporate manslaughter charges brought against bosses from Railtrack and Balfour Beatty.
The reforms have serious implications for companies, especially in high risk industries such as construction, but many organisations are still unaware of their potential impact.
Here Steve Hanson, senior health and safety consultant from international property consultancy EC Harris and Jamie Hanley (pictured), of trade union law firm Morrish & Co, welcome the proposed reforms and examine the effect they will have on the construction industry.
Under the current law, companies can only be prosecuted for manslaughter in work-related death cases if a company's director or senior manager - "a controlling mind and will"- is found guilty.
If there is sufficient evidence against an individual the organisation can be prosecuted, but often it can escape charges. Historically it has been relatively easy to prosecute small companies under this law but very difficult to prove that directors or senior managers of large companies are guilty.
Hanley comments: "In the case of large companies, decisions on safety are often delegated to outside companies or managers lower down the hierarchy. This makes prosecuting a director or senior manager for corporate manslaughter extremely difficult, as they are not the direct decision maker. Having to prove individual guilt first is leaving employees at risk from poorly implemented health and safety policies.
The draft bill for reform, published by the government, would enact a new offence of ‘corporate killing' and would allow charges to be brought against a company without having to prosecute an individual. If introduced, it would force companies to take responsibility for their workforce and their procedures.
It would be instrumental in improving company's health and safety standards and would provide a deterrent to companies intent on flouting regulations. However, it needs to be stringently imposed and would have to be linked to measurable objectives in order to succeed."
EC Harris is an expert on health and safety and is warning businesses to begin preparation now.
Hanson explains: "There are 70-80 deaths every year in the construction industry and this is largely due to poor health and safety practices. The corporate manslaughter legislation is designed to improve this record and give health and safety a prime position in the workplace.
Corporate manslaughter will have huge implications for construction companies. Not only will considerable fines be imposed that will seriously hit businesses, but companies found guilty under the new legislation will suffer irreparable damage to their reputation."
He continues: "Another issue is that industries that are traditionally exposed to health and safety issues will struggle to attract top level management talent in the face of corporate manslaughter prosecutions and the construction industry could be the worst hit.
People at the top of their profession will go to organisations that are putting the best health and safety practices in place and they will steer clear of any companies that have faced corporate manslaughter charge."
Hanson adds: "The goal is to increase the awareness of corporate manslaughter in the same way the image surrounding corporate social responsibility has been transformed in the last 20 years. Gone are the days when business giants could get away with unethical working practices.
Health and Safety is a crucial part of business and not just an extra burden that companies feel they should be seen to be doing correctly - it must be done properly. Ideally health and safety will one day have a seat in every boardroom."
EC Harris is running seminars and awareness days for businesses offering support and advice to increase the level of awareness among companies. Visit EC Harris's web site at: www.echarris.com for further information.