June 2007, 00.01 am
HSC's New Voluntary Guidance on Directors Duties Challenged by safety charity
The failure of the Health and Safety Commission (HSC) to press the government to change the law and introduce safety duties on company directors is being challenged by a safety charity that advises families bereaved from work-related deaths.
In a letter to the HSC Chairperson, Bill Callaghan, the CCA argues that the HSC must follow through with its decision made 18 months ago to support a change in the law and introduce safety duties on company directors. It states that any further delay is 'unacceptable'.
To download a copy of the letter click here
In December 2005, the HSC agreed to support the introduction of legal duties on directors.
This decision was based on evidence from one of its own commissioned reports that legal reform would be more effective than drafting further voluntary guidance in changing the conduct of directors. It was also based on evidence that not a single director of a large or medium sized company has been convicted of a health and safety or manslaughter offence.
However, since then, the HSC has delayed pressing the government to change the law despite the known health, safety and accountability benefits of legal reform.
At its meeting in May 2006, the HSC argued, that it should not recommend legal reform due to:
"the considerable uncertainty about developments on corporate manslaughter, wider progress on alternative penalties and on company law reform, which have the potential to drive improved director focus, and make more visible personal accountability at Board level."
Soon after the meeting the HSC then initiated a process of drafting further voluntary guidance - even though it had decided at its meeting in December 2005 that "work on this should not start until a decision on how to the amend the legislation is made.”
The CCA, in its letter to Bill Callaghan (HSC's chair) - written as the consultation on the new voluntary guidance comes to an end - argue that any further delay on the part of the HSC in not pushing the government to undertake legal reform was simply unjustifiable.
"The implications of these wider reforms are now clear. None have the “potential to drive improved director focus, and make more visible personal accountability at Board level”. None of these three reforms can be used against the argument for a change in the law or against the decision you and your colleagues made at your meeting in December 2005."
Indeed, the letter argues that the weakness in the new "senior manager" test within the corporate manslaughter and homicide bill is that it might incentivise companies to delegate safety responsibilities outside of the scope of its senior managers in order to evade accountability. The CCA states:
"The offence therefore provides a new reason in favour of changing the law on directors’ duties – to remove this incentive."
The letter reminds the HSC that Professor Phil James, in his report commissioned in 2005 by the the HSC's own civil servants, concluded that legal change would be more effective in changing the conduct of directors. The report stated:
“On the basis of the evidence reviewed in the report, there would seem reasonably good, evidence based, ground for trying ‘the legislative’ route, as suggested in the CCA report. Thus this evidence does indicate that statutory requirements are a major and perhaps the main driver of director behavior with regard to the issue of health and safety at work. It also indicates that directors are influenced by potential personal legal liabilities, even when the likelihood of their being penalised is low – a point which further suggests that the presence of such liabilities can have a positive impact notwithstanding the existence of a low probability of their actually being imposed – and suggested that many managers believe that beneficial consequences would flow from making directors more vulnerable to prosecution and the imposition of fines) … [O]n balance the research evidence consequently provides a strong, but not conclusive basis for arguing that the imposition of ‘positive’ health and safety duties on directors would serve to usefully supplement the liability that they currently face under section 37 of the Health and Safety [at work] Act”.
The Government had promised legal reform to impose safety obligations on company directors as far back as 2000 - but have failed to keep its promise.
To read a chronology of the delays since 2000, click here
David Bergman, the Executive Director of the CCA stated:
"We have had to wait ten years - from the first labour party promise in 1997 to now - before reform of the law of corporate manslaughter. We hope very much that we do not have to wait that long to get the really necessary reform that will improve safety and health in British workplaces - the imposition of safety obligations on company directors."
Britain is in the minority of countries in the industrialised world that does not impose safety duties on directors. In a survey commissioned by the HSE, it was found that seven out of the nine jurisdictions surveyed found safety obligations imposed in law on either company directors or senior managers.
To access documents relating to the recent HSE/IOD consultation, click here
Centre for Corporate Accountability is a human
rights charity advising those bereaved from work-related
deaths, and working on issues of safety, law enforcement
and corporate accountability.