Proceeding against directors, etc

Proceeding against "director, manager, secretary or other similar officer" (HSWA s37)

Proceedings under HSWA s37 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.

"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 accused 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). You should see also Prosecuting individuals for information on the prosecution of individuals.

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Where the s37 duty rests

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.

In R-v-Boal 4, 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 S23 (the provision analogous to S37) 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"

In Armour v Skeen 5 the Director of Roads for Strathclyde Regional Council was successfully prosecuted under s37(1), on the grounds that the offences committed by the council were attributable to his neglect, in that 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 s37, it was clear that he came within the category of "manager, secretary or other similar officer of the body corporate".

Where it is intended to proceed under s37 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 otherwise to show that the individual ought to have been aware of the circumstances leading to the breach by the body corporate.

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Considerations in proceeding under s37

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 to also be some measure of personal failure by one or more members of management. This does not mean we automatically prosecute individuals

We need to see if we have similar evidence against the director to that which we have against the company, and we need to consider the arrangements set down in the safety policy.

The purpose of prosecution should be to bring home to a manager the extent of his/her responsibilities. Therefore, the prosecution should be capable of being seen by others, and particularly by other managers, as justified not only in terms of HSWA but also as a matter of practical judgement by those with knowledge of the industry concerned.

There needs to be consistency in the criteria applied by inspectors in initiating prosecution under s37. Unjustified and poorly judged prosecutions of managers may lead to their refusal to accept explicit responsibility for overseeing occupational safety and health.

In order to ensure consistency you should consider:

  • did s/he have effective control over the matter?
  • did s/he have personal 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?

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Parallel proceedings against the corporate body and under S37

Although most commonly there will be criminal proceedings against the company as well as against the director or manager, it is not necessary to prosecute both. Section 37 does not require a conviction of the body corporate, but does require proof that it has committed an offence. Thus if we wish to recommend prosecution under section 37 only, we must be able to bring evidence to show that the company committed an offence as well as evidence of consent, connivance or neglect by the director or manager.

In general, we week to avoid cases against both a company and sole directors, who are also the principal owners of the company, in circumstances where this would be regarded as prosecuting the same person twice. In this situation, you should judge whether recommending prosecution is more warranted against the individual or the company.

The status of managers and others listed in S37 as employees is not affected by the duties placed upon them in their managerial or other capacity, and thus, where they are indeed employees also, they remain subject to the general duties placed on employees at work which are contained in HSWA s7. Proceedings under s7 might therefore be appropriate when the offence involved some act or omission not in the exercise of managerial or other functions coming within S37.

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HSWA s7, s37and s40

Where under the relevant statutory provisions as defined by s53 there is a duty to do something so far as practicable or reasonably practicable, or to use the best means to do something, s40 HSWA provides a defence that it was not practicable or reasonably practicable to do more than was in fact done to satisfy the duty or requirement.

If an accused wishes to rely on the provision, s/he must prove the defence on the balance of probabilities 6. The provision is called a "reverse onus" or "reverse burden of proof"; normally the burden of proof is on the prosecution to establish facts beyond reasonable doubt.

Text removed under the Freedom of Information Act 2000

[Section 31 (Law enforcement) Freedom of Information Act 2000]

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HSWA s8 and s36

Section 8 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 9. This can obviously apply to employees or to non-employees, and is of potentially wide application. The provision is however seldom used as a basis for prosecution, and has generated little comment.

Section 36 is another wide section. Where the commission of an offence under the relevant statutory provisions 10 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 the principal is proceeded against.

s36(2) extends the same liability to acts or defaults by the Crown, where an offence would have been committed under s33 but for its immunity under s48.

An action under this section is not only possible against an employee, though it is seldom 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.

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Disqualification of directors

The Company Directors Disqualification Act 1986 s2(1) empowers a court 11, to make a disqualification order against a person convicted of an indictable offence in connection with the promotion, formation, or management of a company.

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" 12

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. 13

The investigating inspector's report should include information for the Fiscal, in the legal discussion section, on the power to disqualify in all cases where an individual is recommended for prosecution for an indictable offence, where the alleged offence is in connection with the management of the company. See Prosecuting individuals, appendix 6.

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Footnotes

  1. As defined in HSWA 1974. Back
  2. For discussion of connivance, consent and neglect see Wotherspoon-v-M.Advocate 1978 JC 74. Huckerby-v-Elliott [1970] 1 All ER 189, [1977] IRLR 310. Back
  3. [1996] 2 Cr.App. Rep.320. Back
  4. [1992] 3 All ER 177. Back
  5. [1977] IRLR 310. Back
  6. R v Janway Davies, CA, LTL 18.12.02, IRLR (2003) 170. Back
  7. Smith v. Anderson [1980] 15 Ch D 247
  8. 'self –employed person' is defined in HSWA 1974 s 53
  9. defined in HSWA 1974 s 53. Back
  10. defined in HSWA 1974 s 53. Back
  11. CDDA s2(2) , the court(s) having jurisdiction to wind up the company, or the court in which the person was convicted of the offence. Back
  12. R v Goodman [1993] 2 All ER 789. Back
  13. CDDA 1986, s1(1). Back
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Updated 2020-11-16