64. Memorandum submitted by Alarm
In my capacity as Chairman of ALARM, the UK's
leading public sector risk management association representing
over 1,800 members, I am responding to the Government's Draft
Bill for Reform of Corporate Manslaughter, as published for comment
by stakeholders and interested parties.
Whilst wishing to state at the outset that ALARM
fully supports the intentions of the draft Bill in seeking to
address the problems experienced with the current laws on corporate
manslaughter, there are nevertheless several issues of concern
that I wish to raise in terms of the implications of the proposals
for the public sector and how it manages its enterprise risk management
arrangements.
ALARM strongly believes that it is necessary
to restore public confidence in the laws relating to corporate
manslaughter by holding organisations properly to account for
gross failings by their senior management where fatal consequences
have occurred, and supports any efforts to achieve this. However,
despite such clear objectives of the proposals, the practical
implications arising from the Bill's implementation are far less
clear and of considerable concern to our members.
Although the Bill generally presents more opportunities
for risk management than problems and should provide an excellent
driver for promoting the benefits of a risk managed approach at
a senior level to support governance standards throughout the
organisation, there are increasing concerns amongst the risk management
profession that the Bill could give rise to uncertainties and
more risk avoidance as a response.
We have consulted with our membership and with
other risk organisations and the general consensus is that risk
avoidance is a very real possibility and of major concern to our
members.
Too many examples of the public sector engaging
in risk avoidance activities have made the headlines in recent
years. These greatly distort the true picture and are extremely
detrimental to the enormous skill and hard work that has been
undertaken to improve service delivery and customer satisfaction
through proactive risk management. One such example is the recent
problems with school outings and the decision by teachers to cancel
outings for fear of prosecution. Although relatively small scale,
it nevertheless serves as an example of an underlying trend within
the public sector and one that our members fear will increase
as a result of the Bill.
Anything that gives rise to increased risk avoidance
at a time when the need is for organisations to risk manage its
operations from the top down will create enormous difficulties
for senior management and serve only to further erode public confidence
with the public sector.
This is a strong, consolidated view expressed
by our members during the consultation process and I am attaching
as an appendix to this letter, a précis of other main specific
issues raised.
16 June 2005
Appendix
PRECIS OF
MAIN ISSUES
RAISED BY
ALARM MEMBERS
1. What is clear in the draft Bill is that
it does not introduce new standards nor is it intended to introduce
new regulatory burdens on organisations rather, it is from a risk
management point of view directed at identifying ownership of
the risks to which the organisation is exposed. In short, because
an organisation only operates through its people, to rely on the
old principle of "vicarious liability" will in effect
ensure that every time an individual does something, it will be
attributed to the organisation, which would then be judged guilty
of an offence. What we will get is that organisations that are
entirely blameless will stand convicted of offences each time
and this naturally brings the law into disrepute (Tesco v Nattrass
(1972)).
2. The new offence will be where there has
been "gross negligence" and will be the same for manslaughter
committed by an individual or a corporation and this is defined
in the celebrated R v Adomako (1994) by Lord McKay in the House
of Lords.
3. The issue of causality will not change
and this has been recognised by the CPS to be "proximate
cause" as we know it in insurance involving a link between
an act or omission by the "controlling mind" in an unbroken
chain of events that lead to the death of another and that act
or omission should be a breach of the duty of care characterised
as "gross negligence and therefore as a crime" (Lord
McKay in R v Adomako 1994).
4. I query whether the document is sufficiently
clear in the case of Housing Associations (commonly Industrial
and Provident Societies), which have volunteer boards, as do the
Governing bodies at schools or any other arena where volunteers
act at governing body level with the best intentions, but are
predominantly influenced by a professional staff.
The size of Housing Associations varies enormously,
but all have a volunteer board. While not wishing to absolve such
a Board from their Health and Safety responsibilities, I would
not wish this legislation to cause a recruitment crisis.
In most cases, Associations have a significant
executive that I would consider to be the senior management referred
to in the document, but this is not the case.
There are a significant number of incorporated
bodies with volunteer boards who require clear guidance on this
issue. Naturally, it would be useful if this guidance could form
part of the legislation.
5. Other main concerns identified, specifically
by chief officers, relate to the impact of the Indemnity to Members
and Officers Order 2004. Under this new legislation, members and
officers may not be compensated for costs associated with trying
to defend a successful H&S prosecution nor for that matter
in respect of any charge of manslaughter.
At the moment, liability policies grant cover
for H&S prosecutions and until the advent of this order, members
and officers would not have to repay the costs where the prosecution
was successful. Now they would have to. In addition, liability
policies are unlikely to provide cover for manslaughter charges,
leaving officers to face these prosecutions alone.
Whether cover will be available in the market
to pay for the expenses incurred in either event, it is nevertheless
vital that those facing such charges have access to funds to help
them defend charges brought under this legislation (if that is
appropriate), for the sake of a fair trial.
6. Another aspect is that funds will have
to be made available to meet required expenditure on loss control/H&S
matters—that's a good thing but yet another pressure on
local authority funds. There will be some overreaction—there
is some talk of the need for external accreditation of systems
and procedures (more cost!) in order to gain assurance—and
there has never been a better time to understand properly the
standards required for risk management and health and safety and
the key priorities.
7. One of the important issues that needs
to be impressed upon senior managers is that whilst the proposed
new offence makes it easier to prosecute an organisation for failings,
it does not remove the ability to prosecute individuals under
existing laws. It has been interesting to witness senior managers
panicking because they perceive that it will be easier for them
to be personally prosecuted and face the prospect of a prison
sentence. The clear need is for continued adherence to good management
of health and safety risks and support for risk management.
8. If we take the draft Bill at face value,
the new offence would be based on failures in the way an organisation's
activities were organised and is referred to as "management
failure" rather than an immediate negligent act by an employee.
I think that it is therefore a largely demonstrative response
to public opinion and is littered with get out clauses. No manager
is going to prison because of a successful prosecution under the
new corporate manslaughter legislation.
9. The "public policy" issue will
no doubt be used to advantage in many areas and lawyers will have
an interesting time arguing this applies. This is of particular
concern over highways where there have been recent anxieties about
the Police investigating fatal road accidents and looking closely
at the highway authority and whether it may have a case to answer
in terms of road layout, design and maintenance.
10. There is a perception that the proposed
Bill is all about prosecuting organisations for management failings,
such as not having a proper procedure or safety policy and more
importantly not employing management controls to ensure the monitoring
of those procedures and policies and is therefore a new means
of punishing an organisation in addition to existing H&S law.
11. The proposal to remove the general Crown
Immunity exempting Government bodies from prosecution will have
enormous implications for local authorities, especially the fire
and police services, the NHS and armed forces. The likelihood
is that these organisations will become risk averse rather than
risk empowered and this will have a detrimental effect on their
services.
| 
