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November 3, 2007

U.K.'s New Corporate Manslaughter Act

The Corporate Manslaugher and Corporate Homicide Act 2007 has been enacted in the United Kingdom under which product manufacturers whose products cause a person's death as a result of some failure to manage the product's quality and safety may face criminal prosecution.  Section 1 (1) of the Act provides that an organization is guilty of an offense if "the way in which its activities are managed or organised (a) causes a person's death, and (b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased."  The Act goes on to specify that a manufacturer will be guilty only if "the way in which its activities are managed or organized by its senior management is a substantial element in the breach."  While the Act defines "senior management" in section 1(4)(c), it will be necessary to determine on a case-by-case basis which individuals fall within this definition and whether their actions are a "substantial element" in the breach of duty giving rise to liability. 

A company found guilty under the Act is subject to unlimited fines and, possibly, remedial orders requiring the company to take specific steps to remedy any deficiency in its operations, organisation or management that may have led to the death.

This significant piece of legislation goes far beyond pre-existing U.K. law which only provided modest sanctions against product manufacturers under product safety regulations and well beyond any U.S. law.  This new legislation creates a criminal offense and expressly targets product manufacturers, creating a real risk of prosecution of companies that put dangerous products into the marketplace. 

The legislation does not provide for the prosecution of individual officers or managers, only of the company itself.  However, any investigation leading to a prosecution will inevitably focus on the activities of senior managers in the company and quite possibly submit their decisions and behaviors to intense public scrutiny.

JDP

November 3, 2007 | Permalink

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