CORPORATE MANSLAUGHTER AND CORPORATE HOMICIDE BILL

Although Self Storage operators may consider the risks of injury or death of employees at work low due to the limited amount of manual work being done by employees, this piece of legislation introduces more onerous responsibilities for directors, senior managers and owners of businesses.

Background to the Bill

In recent years there has been a grim and chequered history of fatal disasters and incidents in the UK. Often these cause significant loss of life and this has caused the general public to become alarmed. Many people believe that those in senior management who had ‘’control’’ of these organisations have walked away without responsibility. Since 1992 there have been 34 prosecution cases for work related manslaughter but only 7 organisations or individuals have been convicted. This continues to prompt a widespread view that up to now the legal system is not delivering justice.
This new Bill will hold organisations accountable for gross failings by their senior management and deals with an issue in the current law, where there is the need to find a “directing mind” of a company who is personally guilty of gross negligence. In large organisations those at senior levels are seen to be remote from frontline operations, even though decisions made in the boardroom affect the way in which the organisation operates. Therefore, it has been impossible to identify an individual and where prosecutions have proceeded, they have not been successful. This has not been the case with small companies where directors have more direct control over the daily activities, and they have been successfully prosecuted.

To bridge the gap the thrust of the new law focuses on the way in which activities are managed or organised by senior managers. Senior managers are those who play a significant role in making decisions about the whole or a substantial part of the organisation’s activities or are managers who are actually managing or organising these things. In this respect the net is being widened.
The Bill involves not so much a huge change in the law, but a change in priority and perception of health and safety responsibilities, so it may have a significant impact on behaviour.

After passing through the commons committee stage, the Bill had its first and second readings in the House of Lords in December. The Bill went before a Grand Committee in early February this year and could be enacted this Summer.

Manage your risks

The most likely scenarios of death or personal injury for Self Storage employees are of course when they are completing any manual work. I am sure that many smaller operators ask staff to get involved in some maintenance work whenever necessary. Have a think about the following risks as they may be significant hazards for your business;

• Clearing gutters on roofs
• Painting from ladders
• Driving fork lift trucks
• Falling from mezzanine floors

I would strongly recommend that gutter clearing, painting and general maintenance at height are completed by experienced external contractors or appropriately trained staff. Proper assessment of risk prior to any job being undertaken is essential.

Insurance Protection

So as the Bill increases the potential penalty for getting this wrong proper risk management should mitigate the potential that an incident may occur. The fact is that accidents do happen and insurance may provide protection when it is most needed.
Beyond corporations being held liable this area of law exposes individuals for personal liability. There are a range of insurance products that can provide protection in this area, which generally come under the title Directors` and Officers` Liability, commonly called D&O. A handy thing to have when you are being personally sued for lots of money or facing substantial legal fees to defend a prosecution.
A D&O policy is designed to protect the personal wealth of company directors, officers and senior management against the significantly increased responsibilities and duties faced by company decision makers. Cover can also give protection for claims made against you by shareholders, creditors, auditors, the Government and employees for a breach of duty.
If your business already has D&O cover it is worth reviewing it with your broker to ensure adequacy and extent of cover. The major insurers offering this cover type have very different core covers and the extensions available are wide and varied. It is worth taking the time to establish that the cover is right for your business and the protection of your personal assets.
Any director or employee acting in a position of responsibility faces the potential of a legal action resulting in defence costs and damages having to be faced by them personally. Some examples are:-

Employees - discrimination/harassment/redundancy issues
Customers and clients - breaches of contract
Competitors - misleading market information/accounting
External shareholders - loss of dividend or share value
Government and others – statute, such as the Corporate Manslaughter and Corporate Homicide Bill we cover here.

D&O insurance is not expensive with policies currently available from around £750. As always our best advice is understand the law and your duties, assess and mitigate risk and consider insurance for peace of mind, in case it does go wrong.

PoundGates is a broker specialising in the provision of insurance & risk management solutions to the Removals and Self Storage sectors.

For further information please contact the PoundGates team
e-Mail: info@poundgates.com or 01473 216406
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