Corporate Manslaughter Act To Impact On Insurance Industry

by Stewart Douglas

Story link: Corporate Manslaughter Act To Impact On Insurance Industry

A legal loophole that presents a grey area in company car accident deaths looks set to be closed with the introduction of the Corporate Manslaughter Act, that will see companies throughout the UK being held more accountable for criminal consequences of their actions, with the potential to increase insurance claims on company liability policies.

When the statute comes into force it is thought that employer prosecutions could increase due to the increased clarity in the law, giving rise to a substantial increase in cases raised in relation to the 1,000 or so deaths caused by company cars each year.

Corporate criminal liability has until now been something of an enigma in the law, with courts finding prosecution almost impossible as a result of a legal principle known as the ‘identification doctrine’, which required a directing will and mind of the company to be established as acting in a criminally, or criminally negligent manner.

Particularly in relation to employer-sponsored cars and accidents on the road, this had proven difficult to prove. However the introduction of the Corporate Manslaughter Act looks set to make the process of finding company’s criminally liable more straigthforward, which could give rise to a significant level of claims.

The move will almost inevitably increase insurance bills for businesses up and down the country, with the insurance sector set to provide adequate cover for company vehicles and accidents arising from their use on the road.

Whilst the act is designed to make the employers themselves more accountable, some analysts have suggested that the real extent of the problem will fall on the insurance industry - a situation clearly undesirable for commercial policy reasons.

The news comes off the back of research carried out by Arval and the DTF in light of the Corporate Manslaughter Act coming in to force to govern criminal liability in respect of manslaughter and culpable homicide in Scotland.