Diluted Corporate Manslaughter Bill still packs punch

The Corporate Manslaughter and Corporate Homicide Bill has now reached the final stage in its long journey, having passed through both Houses of Parliament. It was expected to become law by the summer. Whether the Bill should cover deaths in custody remains, however, a vexed issue, and may yet hold up the Bill's implementation if John Reid, the Home Secretary, is unable to persuade the House of Commons to reject a House of Lords' amendment to include deaths in custody.

While significantly watered down from the original proposals, the new offence of corporate manslaughter constitutes a workable, albeit imperfect, solution for punishing the most serious health and safety offences.

It will apply to almost every organisation, be it as employer, occupier or involved in commercial activity, where injury results in death. Although not reserved for them exclusively, the most likely targets will be those organisations causing major disasters, particularly those involving the public.

Although Crown immunity has been removed, exemptions for 'exclusively public functions' remain, as do exemptions for certain operational activities carried out by the armed forces, police and other law enforcement agencies, and also for emergency, probation and child protection services. These exemptions are contentious and have been the subject of widespread debate in Parliament.

No individual can be liable under this Bill, although they would still be caught by the existing individual manslaughter laws. A significant amendment, made in the Commons, is to replace the requirement for a 'senior manager's' failure with senior 'management' failure, removing the individual identification doctrine which has been so problematic under current law. Additionally, the senior management failure must have been a substantial element of the organisation's breach of duty.

This should provide some comfort to organisations as it does seem to raise the bar for proving the causation element of the offence.

The penalty on conviction will be an unlimited fine, which, in the current climate, will be very substantial. There is also a power to make publicity orders, ensuring maximum reputational, as well as financial, damage from any conviction.

Brokers should encourage commercial clients to review their business risks in relation to the new law. The cost of mounting a legal defence in the event of a corporate manslaughter case will be substantial, and liability policies will need to provide adequate cover for this. Directors and managers should also check they are protected by their insurance policies in the event they are investigated for gross negligence manslaughter and that indemnity levels provide sufficient coverage to protect their interests.