Proceedings against director, manager, secretary or other similar officer
- Liability under section 37
- Where the section 37 duty rests
- Considerations in proceeding under s.37
- Parallel proceedings against the corporate body and under S.37
- Working directors
- HSWA s.8 and s.36
- Disqualification orders
Liability under section 37
1. Proceedings under HSWA s.37 will require proof of the following elements:
- that an offence has been committed under any of the relevant statutory provisions 1 by a body corporate;
- that the offence has been committed with the consent or connivance of or has been attributable to any neglect on the part of the accused; 2 and
- that the person accused is a director, manager, secretary or other similar officer, or a person purporting to act in any such capacity, or a member of a body corporate whose affairs are managed by its members.
2. "Consent" and "connivance" imply both knowledge and a decision made on such knowledge. In Attorney General's Reference (No1of 1995) 3, the Court of Appeal considered that "consent" required that the defendant knew the material facts that constituted the offence by the body corporate and had agreed to conduct its business on the basis of those facts, ignorance of the law being no defence. "Neglect" does not necessarily require knowledge on the defendant's part of the material facts giving rise to the breach(es), and can include the situation where s/he ought to have been aware of those circumstances4. See OC130/8[166] for guidance on the prosecution of individuals.
Where the section 37 duty rests
3. It is clear that the liability does not fix on any person because of the name that attaches to his/her role in the company, but because of the authority and responsibility that s/he has within it.
4. In R v Boal 5, a case under the Fire Precautions Act 1971, the manager of a bookshop had convictions set aside on appeal on the basis that he was responsible only for day to day running of the premises. Simon Brown J. said:
"The intended scope of s.23 (the provision analogous to s.37) is, we accept, to fix with criminal liability only those who are in a position of real authority, the decision-makers within the company who have both the power and responsibility to decide corporate policy and strategy. It is to catch those responsible for putting proper procedures in place; it is not meant to strike at underlings."
5. In Armour v Skeen6, the Director of Roads for Strathclyde Regional Council was successfully prosecuted under s.37(1), on the grounds that the offences committed by the council were attributable to his neglect: he had failed to produce a written safety policy for his department, though the council had required him to. The court held that, although the Director of Roads was not a "director" in the sense of the word as used in s.37, it was clear that he came within the category of "manager, secretary or other similar officer of the body corporate".
6. Where it is intended to proceed under s.37, evidence should be obtained so that the position of the individual in the management structure can be demonstrated. Such evidence could be obtained from the safety policy or elsewhere to show that the individual was or ought to have been aware of the circumstances leading to the breach by the body corporate.
Considerations in proceeding under s.37
7. As a body corporate operates only by and through the actions of its employees, including managers and directors, if there is an offence by a body corporate then there is likely also to be some measure of personal failure by one or more individuals. This does not mean HSE automatically prosecutes individuals.
8. It is appropriate to consider what evidence has been obtained against the company and the director or senior manager, taking into account the management arrangements (both in practice and as set out in the safety policy).
9. One purpose of bringing a prosecution under s.37 should be to bring home the importance of health and safety responsibilities to those directing companies7. The prosecution should be capable of being seen by others, and particularly by other senior managers, as justified. Following the guidance in OC130/8[167] and taking proportionate and targeted enforcement action in accordance with HSC's Enforcement Policy Statement will avoid unjustified and poorly judged prosecutions of managers. Such prosecutions could lead to a refusal on the part of directors and senior managers to accept explicit responsibility for overseeing safety and health.
10. Questions that may be relevant include:
- did the director/senior manager have effective control over the matter?
- did s/he have (or ought s/he to have had) knowledge of the circumstances surrounding the event?
- did s/he fail to take obvious steps to prevent the event?
- has s/he had previous advice/warnings?
- was there previous advice to the company?
- is responsibility shared between more than one level of management?
Parallel proceedings against the corporate body and under S.37
11. Where there is sufficient evidence and the public interest is met, section 37 cases can be taken against directors/managers as well as prosecuting the company for an offence under the relevant statutory provisions, even where there is a sole director. This is not regarded as prosecuting the same person twice as the two are separate legal entities. Should both matters result in a conviction, it will be for the sentencing tribunal to sentence accordingly. Where you are considering whether to prosecute a director/manager in the wake of a company entering insolvency, there is further guidance in OC 130/08[168] on Prosecuting Individuals.
12. Alternatively, you may decide that it is appropriate only to prosecute an individual director/manager for a breach of section 37, and not prosecute the body corporate. In this situation you do not need to secure a conviction of the body corporate, but you do need to prove that it has committed an offence. Hence, if you wish to prosecute under section 37 only, you must be able to present evidence to show that the company committed an offence, as well as evidence of consent, connivance or neglect by the director/manager.
13. Where informations are laid against both a company and an individual under s.37, the prosecutions should normally be run together, unless there are circumstances which prevent this. If both prosecutions rely on the same facts, it may be wrong to effectively rehearse prosecution witnesses during the course of a first trial before they give evidence in the second. There is also the potential for inconsistencies to emerge between the evidence given by the same witness on separate occasions. A court may, however, rule that the trial of two defendants be 'severed' in the interests of justice.
14. The status of managers and others mentioned in s.37 who are employees is not affected by the duties placed upon them in their managerial or other capacity; where they are also employees of the company, they remain subject to the general duties placed on employees at work by s.7 HSWA. Proceedings under s.7 might therefore be appropriate when the offence involved some act or omission not in the exercise of managerial or other functions coming within s.37.
Working directors
15. Where two or more working directors form a limited company which does not employ any other person, the question of liability under HSWA has been raised.
[Section 31 (Law enforcement) exemption Freedom of Information Act 2000]
HSWA s.8 and s.3610
Section 8
17. Section 8 HSWA states that no person shall intentionally or recklessly interfere with or misuse anything provided in the interests of health, safety or welfare in pursuance of any of the relevant statutory provisions 11. This can apply to employees and non-employees, and is of potentially wide application. The provision is, however, seldom used as a basis for prosecution.
Section 36
18. Where the commission of an offence under the relevant statutory provisions 12 by any person is due to the act or default of some other person, that other person is also liable to be prosecuted for the offence, whether or not proceedings are brought against the principal13.
19. S.36(2) extends the same liability to acts or defaults by the Crown, where an offence would have been committed under s.33 but for its immunity under s.48.
20. An action under this section is not only possible against an employee, though it has seldom been used in this way, but also against any other person (even, for example, a trespasser). The 'act' referred to will, in practice, almost certainly need to be a 'wrongful' act.
Disqualification orders
21. Section 2(1) of the Company Directors Disqualification Act 1986 empowers a court 14 to make a disqualification order against a person convicted of an indictable offence 15 in connection with the promotion, formation or management of a company.
22. The test of whether an offence is in connection with the management of a company is whether it has "some relevant factual connection with the management of the company" 16.
23. Disqualified persons must not, without the leave of the court, be a director, liquidator or administrator of a company, or receiver and manager of a company's property, or in any way, directly or indirectly, be concerned or take part in the promotion, formation or management of a company for a specified period. 17
24. The maximum period of disqualification is five years when an order is made by a magistrates' court, or fifteen years by the Crown Court or any other court. 18
25. In all cases where an individual is convicted of an indictable offence "in connection with the management of a company", the court should be reminded of its powers to make a disqualification order19 and that the commission of health and safety offences may call into question that person's suitability to fulfil the role of director. If there is doubt as to whether an offence is "in connection with the management of a company", you should contact your Directorate legal liaison point, who may seek further advice from Legal Adviser's Office.
Footnotes
- As defined in s.53 HSWA n 74. Back to reference of footnote 1
- For a discussion of connivance, consent and neglect, see Wotherspoon v H.M. Advocate 1978 JC 74, Huckerby v Elliott [1970] 1 All ER 189, Armour v Skeen [1977] IRLR 310. Back to reference of footnote 2
- [1996] 2 Cr.App.Rep. 320. Back to reference of footnote 3
- R v P [2007] EWCA Crim 1937. Back to reference of footnote 4
- [1992] 3 All ER 177. Back to reference of footnote 5
- [1977] IRLR 310. Back to reference of footnote 6
- Guidance on the responsibilities (both collective and individual) of directors, board members and those in similar positions of authority can be found in the publication Leading health and safety at work [444KB] (PDF) [169]. Back to reference of footnote 7
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[Section 31 (Law enforcement) exemption Freedom of Information Act 2000]
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[Section 31 (Law enforcement) exemption Freedom of Information Act 2000]
- OC130/8[170] contains further guidance on sections 8 and 36 HSWA. See in particular Appendix 3. Back to reference of footnote 10
- Defined in HSWA 1974 s. 53. Back to reference of footnote 11
- Defined in HSWA 1974 s. 53. Back to reference of footnote 12
- Section 36(1) HSWA. Back to reference of footnote 13
- CDDA s.2(2), being a court by or before which a person is convicted, or, in the case of a magistrates' court, a court in the same local justice area, or any court having jurisdiction to wind up the company concerned. Back to reference of footnote 14
- A disqualification order cannot be made where the person has only been convicted of a summary-only offence, such as intentionally obstructing an inspector, but such an order can be made where an indictable (either way) offence has been tried summarily, ie by the magistrates. See the table of penalties[171] in the 'Sentencing and costs' section for a list of summary-only offences. Back to reference of footnote 15
- R v Goodman [1993] 2 All ER 789. Back to reference of footnote 16
- CDDA 1986, s.1(1). Back to reference of footnote 17
- CDDA 1986, s.2(3). Back to reference of footnote 18
- See OC130/8 on Prosecuting individuals, in particular Appendix 6[172], for further guidance. Back to reference of footnote 19