New Act will have a huge effect on fleets

Fleet decision-makers say the new Corporate Manslaughter and Corporate Homicide Act will have the single biggest impact on their business travel policy decisions in the next 12 months.

The long-awaited new law, more than a decade in the making, comes into effect on April 6 and, according to a survey of almost 700 managers on behalf of GE Capital Solutions, Fleet Services compliance with the legislation is the single biggest issue on their agenda.

When asked what factors were likely to impact on their policy decisions over the next 12 months, 90.2% of managers responsible for vehicles mentioned corporate manslaughter compared to 71.7% in the same period last year – by far the fastest rising subject.

General health and safety/duty of care for company cars also posted an increase – up from 92.8% to 95.5% – while driver safety and vehicle safety remained two of the top three factors named by respondents when asked what issues they considered when constructing their current fleet policies.

Given the scope of the legislation it is hardly surprising that businesses are concerned as to whether their existing occupational road risk management policies and procedures comply sufficiently with the new law.

As Kevin Basnett, an employment law specialist and partner at Wiltshire-based Goughs Solicitors, said at a roadshow on the new law organised by Fleet Support Group, which manages almost 50,000 vehicles in the UK: “If a company has management dysfunction; does not have a controlling mind and is disorganised it will now be easier to obtain a corporate manslaughter conviction.”

Concern

The concern is prompting many organisations to go through their occupational road risk management policies and procedures in fine detail, but there is industry-wide concern that many small and regional businesses are not making the effort to comply with both best practice and the law.

But, FSG chairman Geoffrey Bray said: “Corporate manslaughter is a Trojan Horse and a fantastic opportunity to bring about change in terms of managing drivers, vehicles and journeys.”

Meanwhile, comments from former Metropolitan Police chief inspector Ian Brooks, now a director of Oscar Strategic Consulting and an adviser to FSG, should serve as a warning to complacent organisations. He said: “Police road death investigation competence has been uprated over the past few years to enhance the capability of police to determine why a collision occurred; who was responsible; and then hold individuals and organisations to account.

“The requirement to investigate all road deaths as unlawful killings when considered alongside the new corporate manslaughter legislation has clear implications for the management of work-related road risks.

“Operational experience has highlighted there is frequently only a fine line to be drawn between the occurrence of a near-miss and a fatality. Yet many organisations are ignoring obvious risks and seem to be relying on luck to manage human, legal or financial costs associated with crashes.”

Rich Green, managing director at GE Capital Solutions Fleet Services, added: “Senior management within organisations that provide company cars or ask employees to use their own vehicles at work are right to be concerned.

“Those that already have a comprehensive risk management policy in place have little cause to worry. However, those that have not taken their duty of care seriously so far would do well to get themselves up to speed as quickly as possible to ensure that their systems and processes for managing health and safety are adequate or otherwise risk facing the full force of the new legislation in the event of an accident.”

Shared

It is a view shared by Mr Bray, who said: “While there is more awareness than ever in business that health and safety precautions require constant attention to detail, and that includes attention to working driver road risks, there is still an underlying apathy in many companies. They’ll give the issue more attention tomorrow, not today.

“That attitude is tending to sweep corporate manslaughter to one side, with a ‘we’re watching to see what it brings’ stance. Some ill-prepared companies risk learning the hard way and will then wish, they had paid more attention to precautions that would have avoided their prosecution.

“Especially when precautions against workrelated road risk produce an on-going profit. There is ample proof of that among insurers. Significantly, businesses with risk managers – as in the finance and insurance industries – dedicated to identifying and removing risk by safeguarding against it – have been quickest in adopting work-related road risk protection.”

Ironically, under the old regime, disorganised and disjointed management might have provided a defence to a corporate manslaughter charge by making it very difficult to identify the controlling mind. But, the management failure scenario will now help prove the offence of corporate manslaughter (corporate homicide in Scotland) in the future.

As a result lawyers expect it to be much easier to secure a conviction for corporate manslaughter against an organisation ‘if death is caused by a gross breach of its duty of care that is substantially due to senior management failure’.

In terms of work-related road safety, following a fatal road crash involving an at-work driver investigating police officers will be looking for weaknesses in the way the employer monitors, audits and reviews its policies and procedures in respect of vehicles, drivers and journeys.

For both corporate decision-makers and prosecuting barristers the ‘bible’ to both prove compliance and breaches of the legislation is the Heath and Safety Executive’s ‘Driving at Work: Managing Work-related Road Safety’ - accessible at www.hse.gov.uk/pubns/indg382.pdf

Corporate Manslaughter Act fact file

• An organisation will be found guilty under the Corporate Manslaughter and Corporate Homicide Act if ‘death is caused by a gross breach of its duty of care that is substantially due to senior management failure’.
• Convicted businesses and organisations can expect to receive fines running into millions of pounds – up to 10% of annual turnover – publicity orders and a remedial order.
• Senior individuals can still be prosecuted under existing manslaughter laws and the Health and Safety at Work Act if the health and safety failure is caused by the consent connivance or neglect of a director.
• Less senior members of staff could be prosecuted under the Health and Safety at Work Act if they failed to take reasonable care for the health and safety of themselves or others.

Seminar highlights fall-out from Act

The seminar run by the Kent and Medway Safety Camera Partnership gave companies the opportunity to hear from experts in the field and arm themselves with all the necessary information to ensure their organisation never falls foul of the Act.

The Partnership ran the seminar as part of its ‘Driving Business – Safely!’ campaign which highlights to companies the responsibilities they have to their staff when they are driving in a work-related capacity.

Literature

Educational literature has been provided for organisations to give their drivers and adverts delivered through print and radio. A website has also been developed: www.drivingbusinesssafely.org, which includes driver safety tips and useful links.

A Partnership spokeswoman said: “One in three crashes on the road involves a vehicle being used for business purposes so the seminar was crucial to raise awareness of this as a serious issue.

"The new Corporate Manslaughter and Corporate Homicide Act means that businesses really need to get their house in order and make sure that their employees are driving responsibly on our roads.

“It is not enough to just have a health and safety policy to tick a box, organisations must now be able to prove that these polices are being proactively monitored on a daily basis and if they are not they may find themselves in court.”

The Kent and Medway Safety Camera Partnership was formed in 2002 and comprises Kent County Council, Medway Council, Kent Police, Highways Agency and Her Majesty’s Courts Service.

New Act will have a huge effect on fleets

It will be the standard to prove or disprove that companies and other organisations have ‘done this and that’.”

The document says: “Health and safety law requires employers and the self-employed to ensure so far as reasonably practicable the health, safety and welfare of all employees and to safeguard others who may be put at risk from their work activities. This includes when they are undertaking work-related driving activities.”

Guilty

Businesses and organisations found guilty of the new offence can expect to receive fines running into millions of pounds, publicity orders and a remedial order.

However, guidance to the courts on how the new penalties should be used remains under consideration by the Sentencing Guidelines Council.

But, the Sentencing Advisory Panel, which advises the Council, has already proposed that organisations found guilty of corporate manslaughter should face publicity orders – including advertisements in newspapers and on television and radio as well as letters sent to shareholders and customers – and fines of up to 10% of average annual turnover.

In announcing its proposals, the Panel said: “The prospect of large fines should encourage compliance with health and safety regulations.”

But, Michael Appleby, a leading health and safety defence specialist and a partner in law firm Housemans, which acted for the railway maintenance arm of Balfour Beatty in relation to the Hatfield train derailment when the company was acquitted of all manslaughter charges, said: “Ultimately it may be the publicity of a conviction and not a fine which is a company’s undoing due to the impact it will have upon tendering for new business.”

Important

Justice Minister Maria Eagle said: “It is extremely important that companies and other organisations take health and safety seriously. Failure to do so can have devastating consequences – not only for the families of those affected but also for the businesses involved.

“This law will ensure that there is proper accountability - when very serious management failings lead to people being killed. This is not about over-regulation.

“Businesses should see this as an opportunity to make sure they have proper arrangements in place for managing health and safety. It is crucial for the people they employ and their customers that they are responsible and successful corporate citizens.”

Driving on business, for most employees, is the most dangerous task they undertake during their working life, according to official figures. In 2006, the latest year for which figures are available, a total of 3,172 people were killed on Britain’s roads and 255,232 people were injured.

It is estimated that between a third and a quarter of all roads traffic crashes involve someone who was at work at the time. Based on the 2006 Department for Transport data that would be around 800-1,060 deaths a year compared to 241 fatal injuries to workers in the ‘traditional workplace’, which are investigated by the HSE.

So how many prosecutions under the new Act can be expected? The Home Office’s impact assessment of the new legislation reveals that there will be between 10 and 13 additional prosecutions a year - around 3-4% of recorded work related-deaths.

However, that percentage refers to ‘deaths in the workplace’ and not deaths linked to at-work driving. Using the same calculation and linking it to the number of at-work driving deaths there could be around 40 corporate manslaughter prosecutions a year.

Crawling

As Mr Basnett said: “There are police officers out there crawling over the wreckage seeing if they can get a prosecution under the Act. The new corporate manslaughter law makes it easier to prosecute organisations and efforts are being ramped up. I think there will be a lot more prosecutions than the Home Office has estimated.”

Mistakenly, people believe the new law means there will be no prosecutions of directors or senior managers. The Act does not make provision for an offence of aiding, abetting, counseling or procuring the commission of the offence of corporate manslaughter.

However, senior individuals can still be prosecuted under the existing law for manslaughter, which is not altered by the Act, and section 37 of the Health and Safety at Work Act if the health and safety failure is caused by the consent connivance or neglect of a director. An individual convicted of workrelated manslaughter is likely to receive twothree years in prison. Less senior members of staff could be prosecuted under section seven of the Health and Safety at Work Act if they failed to take reasonable care for the health and safety of themselves or others.

Roadshows prepare managers for new tasks

UK business executives and local authority managers with responsibility for managing work-related road safety attended a series of nationwide roadshows organised by FSG in the countdown to the April 6 introduction of the Corporate Manslaughter and Corporate Homicide Act.

They heard that by implementing a raft of measures to manage the occupational road risk posed by employees who drive company vehicles and their own cars on business, huge financial savings as well as legislative compliance would be achieved.

British business, it is estimated, is losing up to £2.7 billion a year as a consequence of at-work road traffic accidents and society is paying a further £1 billion.

Costs can be broken down into many areas – some financial others not quantifiable but nevertheless a cost to business and almost certainly hitting bottom line profits. Industry data suggests that average crash repair costs are around £700-£750 per insurance claim, but the Health and Safety Executive has calculated that for every £1 recoverable, between £8 and £36 may be lost to a company in uninsured costs.

Callum Taylor, management liability underwriting manager at specialist insurer Hiscox, said: “As well as having to cope with expensive legal bills, companies facing legal action under the new Act risk their reputation being damaged, and the day-to-day running of their business being disrupted.”

Therefore, with corporate budgets continually under the microscope a quality risk management programme can significantly reduce fleet operating costs without any impact on the performance of the fleet.

Comprehensive

Not only that, but companies which put in place a comprehensive risk management strategy inevitably engender a feeling of goodwill among their staff and a notable improvement in overall productivity.

By managing occupational road risk and putting in place a cycle of continuous road safety improvement a company’s fleet efficiency will be improved as vehicle downtime and staff sickness levels will be significantly reduced resulting in a boost to the organisation’s safety image – after all the company’s drivers are also its ambassadors.

At an FSG roadshow Kevin Basnett, employment law specialist and partner at Wiltshire-based Goughs Solicitors, said: “It makes sense for Great Britain Plc to focus on occupational road risk to save us from our stupidity on the road.”

It is for that reason FSG has joined forces with Chippenham-based SunGard Public Sector, the police vehicle communications and public sector IT specialist, to launch iRIS – integrated risk information systems.

It combines FSG’s existing RiskMaster work-related road risk prevention and protection package, which includes an annually reviewed employee ‘Permit to Drive’ issued only after rigid driver and vehicle legal fitness confirmation (RoadSafe: spring 2007), with SunGard’s telematics offering enabling an employer to have remote control of driver-time at the wheel and safety observance, plus much more.

Telematics is not new – indeed ALD Automotive became the first contract hire and leasing company to link the in-vehicle technology to at-work driving safety more than three years ago (see telematics feature pages 54 to 57)

The new iRIS initiative provides increased management reporting capacity; multi-choice client-driver contacts – telephone, email, text, etc.; telematic controls tailored to choice to provide continuous performance measurement; automatic links to other client-relevant FSG departments; and enriched web functionality including driver profiling as employee behaviour behind the wheel is monitored.

FSG chairman Geoffrey Bray said: “Telematics is widening the breadth of on-road in-vehicle health and safety related vetting, and in a wider spread of vehicles, to meet expanding employer requirement. Hours at the wheel, speed, number of deliveries, even driver tiredness, can be monitored.

“The biggest single problem for anyone operating vehicles is the person sitting behind the wheel. We have to manage drivers differently and that is why we have brought technologies together to manage risk. It is carnage on the roads; like a warzone. Managing work-related road safety is black or white. There is no grey area; you either manage it or you don’t. Checking driving licences or doing some driver training does not go far enough.”

Fleets that have introduced telematics have seen both risk management and financial benefits. Mr Bray said: “Both elements of iRIS can show an excellent return on investment. The management of work-related road safety tends to provide mid to longterm financial savings as the performance of drivers improves. However, the addition of the operational benefits of employing tracking can bring forward this return to show immediate cost savings.”

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