The new Corporate Manslaughter and Corporate Homicide Act which came into effect last month will have far reaching implications for all organisations that employ people. The Act has created a new offence whereby an organisation could be found guilty if the manner in which its activities are managed or orchestrated by senior management (those who play a significant role in management and organisational decision making or those involved in the actual management of activities) results in death which amounts to a gross breach of a duty of care to the deceased.
In deciding whether an organisation is guilty a jury will take into account breaches of Health & Safety policies procedures as well as the overall approach of the company towards Health & Safety
Where a company’s actions, or inactions, amount to a gross breach of the duty of care resulting in death then the following Court Penalties can apply:
1. Unlimited fines
2. Publicity Orders – guilty companies must place advertising notices of convictions in the local and/or national press.
3. Remedial Orders – the Courts can make these orders to force companies to take the required steps to remedy the failures which resulted in the conviction..
In addition for a company defending their position this can prove costly in terms of both ‘man hours’ and legal representation costs. If legal expense cover is operational then depending on the scope of cover and policy wording the policy may respond to the costs of defending such a claim so long as the legal expense insurer is notified immediately. Directors & Officers insurance policies however are unlikely to respond as the claim would be made against the corporate bodies and not individual directors and officers of a company.