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Nottingham, 6 November 2015Interactive seminar highlights rising risk of corporate manslaughter for SMEs

East Midlands SMEs gain risk insight from 'mock' corporate manslaughter case

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Over 60 businesses from across the East Midlands attended an interactive business seminar on corporate manslaughter at Tollerton Hall in Nottingham yesterday, where directors and owners of local companies gained a detailed insight into what happens when a company has to answer to the Health & Safety Executive (HSE) in the wake of a death or serious injury in the workplace.

The interactive event was organised by local insurance broker, Arthur J. Gallagher, and presented by a team of in-house risk management experts, in partnership with legal advisers from national law firm, Mills & Reeve. Representatives from the two firms (pictured above, getting into character) played the roles of the defendant SME - who found himself on the wrong end of a corporate manslaughter charge; the defendant's solicitor; an HSE inspector; police officer and the narrator.

During the three-hour seminar, attendees were able to experience first-hand a director of a fictional company face questioning under Police and Criminal Evidence (PACE) conditions following a corporate manslaughter charge.

With audience participation throughout, as well as open Q&A at the end, the event was crafted to raise awareness of having comprehensive health and safety policies and procedures in place, as well as ensuring the correct level of liability insurance protection.

Tracy Keep, Account Director at Arthur J. Gallagher, said: “Since the introduction of the Corporate Manslaughter and Corporate Homicide Act 2007, almost every prosecution for corporate manslaughter has been against owner-managed businesses. While it’s easy to dismiss the media headlines and think this could never happen to your company, the reality is that the number of these kinds of case is on the rise and SMEs are at the biggest risk.

“Businesses can be found guilty of corporate manslaughter as a result of gross breach of duty of care arising from serious management failure – and the legal costs of defending a corporate manslaughter charge can quickly mount up.

“Prevention is always better than a cure so the aim of this week’s seminar was to create a format for our clients to understand that an incident and subsequent prosecution can happen to any company of any size – and that getting the right policies, procedures and protection in place is more important than ever before.

“The event was a real eye-opener for those attending. We were delighted with the turnout and feedback after the event was fantastic.”

Ian Mayers, Partner at legal experts Mills & Reeve, also pointed out that new sentencing guidelines were proposed back in 2014 and — after consultation — these new guidelines are due to be published very shortly with the view to them coming into force in 2016. “Whilst it is anticipated that the overall effect of these new guidelines will be to further increase the average fines imposed for convictions, especially on larger businesses, under the Corporate Manslaughter and Corporate Homicide Act 2007,” he explained, “it is likely that practical issues, such as the requirement on organisations to co-operate more fully with regulators, even post-conviction, will be just as significant.”

Ian continues: “But, don’t forget, in addition to any headline financial penalty imposed by the courts, organisations need also to consider the other possible negative effects of a conviction which include massive business interruption, reputational damage, substantial prosecution costs and the victim impact surcharge imposed by courts.”

Arthur J. Gallagher’s top five tips for protecting your business against a corporate manslaughter charge:

  1. Know your risks - carry out regular risk assessments for employees and all other service users. Preventative measures, as well as strategies for coping when risk situations arise, are essential in ensuring both employees and the company are protected.
  2. Health and safety first - review your health and safety procedures and address any shortcomings, with strict monitoring of implementation to ensure things are not forgotten.
  3. People training - well documented training, at all levels, is essential in ensuring all staff are competent in their understanding and responsibilities around health and safety.
  4. The right cover - as well as the need for employers’, public and professional liability insurances, make sure the senior individuals in your business are protected with Directors & Officers’ insurance.
  5. Regular reviews - things change! Regularly reviewing your risks, policies, cover and training programme is essential and will help to ensure nothing falls through the cracks.
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