Marsh Comments on Increased UK Corporate Responsibility Laws

Marsh’s UK branch has urged UK businesses to review their health and safety procedures, risk management programs and insurance cover in the wake of new corporate manslaughter and homicide legislation. The advice follows enactment on July 27 of the “Corporate Manslaughter and Corporate Homicide Act 2007.”

Marsh warns that “both private sector and public organizations, with prescribed exceptions, can now be prosecuted as a corporate body should a gross breach of the duty of care arising from their products or services cause a person’s death. There is no upper limit on the fines, remedial or improvement notices can be imposed and the convicted organization can be ordered to publicize the details of the offense.”

David Huxley, a Managing Consultant in the Human Capital Risk Management team at Marsh, called the Act “one of the most far-reaching pieces of legislation to affect UK organizations in recent times. “Failure of an organization to demonstrate an effective health and safety system and culture within the workplace will be key factor in any decision to prosecute. Likewise, a strong health and safety culture could be instrumental in the successful defense of a prosecution.”

Huxley stressed that “it is imperative that organizations, regardless of their size or nature of their business, review their health and safety, risk management and insurance programs to ensure that they have reduced the likelihood of a claim in the first instance, and are in robust position should they need to defend a case.”

He also noted that “most liability insurers provide defense costs following prosecution arising from an alleged breach of health and safety legislation. However, few liability policies will have manslaughter and homicide defense costs included automatically and the extension must be requested.

“Organizations should also check their Employers’ and Public/Products Liability policies or, if purchased separately, the Legal Fees insurance policy, to ensure that defencs and appeal costs are included for individuals as well as for the organization.”

Source: Marsh UK