29th October 2007

There has never been a more appropriate time for the directors of private and public companies to make sure that they fully understand the law and how it affects them and their companies.

We have just had the Corporate Manslaughter and Corporate Homicide Act put on the statute book which will mean that all companies will have to review the processes and controls that they have in place to prevent work-related deaths. This new legislation has been designed to close a loop hole in the law which has made it difficult to prosecute companies for manslaughter. It is intended that, if it can be demonstrated that a person's death occurred as a result of inadequate safety procedures within an organisation, the company will be prosecuted for manslaughter. If found guilty of this new offence companies can expect hefty fines and for the families of victims to take civil actions.

There are also many provisions in the new Companies Act which have just been implemented that will have a dramatic effect on company directors. Not least there will be the introduction, for the first time, of a set of statutory duties that a company director must comply with. This, combined with the new statutory right of a shareholder to bring a derivative claim against an existing director or former director, could lead to many directors being sued.