Hiscox Urges Companies To Consider Corporate Manslaughter Act

by Stewart Douglas

Story link: Hiscox Urges Companies To Consider Corporate Manslaughter Act

UK insurer Hiscox has today advised that companies of all sized prepare for the introduction of the Corporate Manslaughter Act which commences at the start of April, and could pave the way for substantial legal costs and fines following streamlined processes for criminal convictions of companies.

In a statement released today by the insurance company, it said that companies throughout the UK should now look to update their risk management processes in order to ensure they are fully covered when the new laws come in to force in April of this year.

Early acturial calculations have predicted that the UK economy could be hit to the tune of £21.2 million a year as a result of increased legal expenses derived from the introduction of the act, which will ensure easier prosecutions for companies found to have caused death to its employees in the course of their business.

The Corporate Manslaughter Act will overrule current conviction procedures in England and Wales, which at present require companies to have an identifiable breach of duty as regards the employees of the company, and a single guiding hand in breaching the duty, which is often in practice difficult to establish.

The new Act will create a much easier process of convinction, which is thought to help silence complaints of procedural difficulties up until now. However the act fails to provide for other criminal offences, short of manslaughter, like causing severe injury or permanent disability which will remain subject to the previous, common law difficulties.

Further criticism of the Act has suggested that its lack of compatibility with Scots Law could prove a sticking point, with companies south of the border subject to more defined criminal procedures whilst their Northern counterparts will be governed under a different regime.

It is thought that following the increases in legal costs, the insurance industry will bear the brunt of the damage, making it an important development for firms like Hiscox to publicise and advise on.