Workplace safety: it's criminal

First corporate manslaughter conviction

A company has been convicted of the new offence of corporate manslaughter, arising out of an accident in 2008[1].

Before the Corporate Manslaughter and Corporate Homicide Act 2007 it was very difficult to prosecute for manslaughter arising out of industrial accidents. It was necessary to prove the personal guilt of an individual director. The new offence is committed if the way the company’s activities are managed or organised causes a death, amounting to gross negligence, to which senior management contributed. 

Cotswold Geotechnical (Holdings) Ltd ignored industry standards and left a junior geologist to work alone in a 3.5m deep trench. Sadly, Alex Wright was killed when the trench collapsed.

Originally, the managing director was also charged with manslaughter, but was unfit to stand trial, and the company was also charged with a health and safety offence. Was the corporate manslaughter offence is unnecessary in the circumstances? The company can expect a heavier fine than for the H&S offence[2], and has the public notoriety of being convicted for manslaughter[3] – perhaps that was the main reason for bringing in the offence, to convict companies of a “real” crime instead of what looked like a technical offence. Still no-one goes to jail.

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[1] Source: http://www.cps.gov.uk/news/press_releases/107_11/

[2] Sentencing guidelines for corporate manslaughter recommend a fine of over £500,000, that may be in millions; for health and safety offences causing death, of over £100,000. Fines cannot be recovered under insurance.

[3] Which is likely to include court-ordered publicity, eg on the company’s own website.

A decent website?

Advertising code extended to all websites

The Code of Advertising Practice is being applied to all websites from 1 March. I blogged this week about the legal requirements for your website, but now it also has to follow the Code if it directly promotes products or services to consumers (including businesses) in the UK. That includes a Facebook page or LinkedIn company page.

You may think that all your promotional material is already legal, decent, honest and truthful, but do you hold documentary evidence to prove all claims that are likely to be regarded as objective? Is it clear that opinions are not intended to be objective claims?

For a start, very few law firm websites don’t claim to be a “leading” practice!

Some parts of the Code go beyond the content of advertisements: for instance products ordered must generally be delivered in 30 days, and the CAP duplicates and extends some parts of the Distance Selling Regulations, and brings in general obligations to treat customers fairly – and appears to apply them to business-to-business sales. Of course it does not have the force of law – its terms are enforced by the Committee of Advertising Practice through advertising industry sanctions, so it does not give customers direct contractual rights. But an adverse finding could be highly embarrassing. Remember, many complaints come from competitors!

Name, rank and number

Company details you need on your stationery, websites and emails

Routine stuff, but I see many companies are still getting these wrong. Letterheads and invoices are usually right, but people fall down when it comes to email footers, websites and minor stationery items. Have you got them all right? As a reminder, download my easy guide as PDF.

Companies House: all-electronic filing

Companies House has announced that all incorporations and filings of annual returns, accounts and the main company forms for the standard company types will be electronic-only by March 2013. That means the end of paper forms.

In most cases web filing is much easier, though it does make it harder to make sure that filings are right and properly authorised: a mistake by the person filling in the online form will not easily be picked up. You do have to struggle though the arcane director/secretary authority codes involving the first three letters of your eye colour and Dad's forename.

It can go wrong, though. A client acquired a company and moved the office, and was given an incorrect online filing code. We couldn't file the change of registered office or new directors. Companies House would only send the filing code out by post to the old registered office...

Bribery Act delayed

The Government has delayed bringing the Bribery Act into force, until three months after it publishes its guidance. The guidance was due in January and the Act was to come into force in April. The guidance is to be made clearer and more comprehensive. It is important because it will clarify the steps businesses will have to have taken to show that they have "adequate procedures" to prevent bribery on their behalf. there is a fear that small businesses may be caught out because they will not have written manuals, processes and contracts.

Insolvency and pension deficits: a Bonas for groups?

Big cut in the threat of contribution notices

An important case for the insolvency world when dealing with pension scheme deficits: the Pensions Regulator has been knocked back in its demand for a substantial contribution (£20m claimed, £5m originally ordered) by way of a contribution notice against a parent company, following a pre-pack that resulted in the business being sold back to a member of the same group. In Re the Bonas Group Pension Scheme the Tribunal effectively held that a contribution notice can only be used to recover actual loss caused by the parent company’s conduct. Unless the pre-pack sale was at an undervalue (and since the subsidiary was insolvent and the parent had no other obligation to contribute to the scheme) the Pensions Regulator had no grounds for recovery of the scheme deficit from the parent by way of a contribution notice. This greatly reduces the threat of contribution notices is associated companies are allowed to go down with pension deficits, and  slashes the Pension Regulator’s bargaining power when negotiating contributions from groups.

Contribution notices can require a person connected to or associated with the employer to make a contribution to a scheme deficit. Financial support directions are not affected by the case, and there have been some legislative changes that could affect the result, but this is a big and unexpected reduction in the Pension Regulator's powers.