Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Courts disqualify company directors risking pounds almost 300 times more often than those risking people

14.11.2007
Research shows that courts disqualify company directors risking pounds almost 300 times more often than directors risking people’s health and safety.

Research published this week by the University of Warwick’s School of Law for the Health and Safety Executive, has found that for almost 20 years company directors were almost 300 times more likely to be disqualified by a court from acting as a director for insolvency or other financial reasons than they were for breaching health and safety rules.

The report, entitled "A survey of the use and effectiveness of the Company Directors Disqualification Act 1986 as a legal sanction against directors convicted of health and safety offences", by Professor Alan Neal and Professor Frank Wright of the Employment Law Research Unit of the University of Warwick, looked at the use made of powers contained in the Company Directors Disqualification Act 1986 in relation to disqualification orders related to health and safety failures in the management of companies.

In particular, the research considered the effectiveness of director disqualification under the 1986 Act as a legal sanction against directors convicted of health and safety offences. The University of Warwick researchers found that the provisions of the Act were very clear, and needed no further clarification or additional legislation in order to provide adequate sanctions for breaches of health and safety duties. What they did find, however, was a surprising failure to utilise those very clear sanctions.

From the records made available to them, the researchers were able to identify just ten directors who had been disqualified for health and safety reasons between the date when the 1986 Act took effect and the end point of their study in 2005. At less than one a year, this compares markedly to the overall total of some 1500+ company directors disqualified by the courts each year for insolvency or other financial reasons.

However the University of Warwick team were able to establish clear reasons as to why there had been so few disqualifications even though the 1986 made this available as a clear option.

In interviews conducted with HSE operations directors and their counterparts within local authorities, there emerged a surprisingly low level of awareness of the 1986 Act provisions. University of Warwick Professor Alan Neal said, "We found a marked absence of awareness even of what potential powers may be contained within the 1986 Act."

The University of Warwick team also concluded that much more could have been done to brief prosecution teams in relation to their ability to seek disqualifications and the desirability of actually doing so. In particular, they suggested that steps needed to be taken to develop and draw up guidelines for prosecutors in relation to appropriate circumstances in which an application for a disqualification order might be made to a court. There should also be a direction to all prosecutors (whether HSE, local authorities, or those acting as "agents" for the prosecuting authorities) in relevant cases of health and safety management shortcomings that any court which returns a guilty verdict in relation to a relevant indictable offence should be reminded of the powers available under the 1986 Act.

The Warwick Professors also recommended that arrangements should be put in place to supervise and monitor all health and safety prosecution files, with a view to identifying cases where it would be appropriate to make application for a disqualification order, and that, in any event, a formal return should be made by all prosecutors in respect of the outcomes of any cases handled by them before the courts.

The researchers concluded that, provided that these recommendations were introduced speedily, there was no reason to call for amendment of the existing powers contained in the 1986 Act. However, it was observed that, in the longer term, there would be a need for the Health and Safety Commission and the Health and Safety Executive to engage actively in the development of guidelines for boardroom and director conduct in relation to health and safety issues.

Since the research was completed, the Health and Safety Commission have given detailed consideration to the Warwick report and have responded quickly. The Commission have recognised the need for inspectors to seek greater use by the courts of director disqualification as a penalty, and new instructions on this matter have now been issued to inspectors. Last month, Professor Wright joined Lord McKenzie, Minister for Health and Safety, at the Institute of Directors in London, to launch the latest IOD/HSE Guidance on Leadership Actions for Directors and Board Members. Meanwhile, on 27 July 2007 the government’s Corporate Manslaughter and Corporate Homicide Act 2007 was passed, with provisions due to come into force on 6 April 2008.

Peter Dunn | alfa
Further information:
http://www.hse.gov.uk/research/rrhtm/rr597.htm
http://www2.warwick.ac.uk/newsandevents/pressreleases/courts_disqualify_company/

More articles from Business and Finance:

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

nachricht Europe's microtechnology industry is attuned to growth
10.03.2017 | IVAM Fachverband für Mikrotechnik

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Can the immune system be boosted against Staphylococcus aureus by delivery of messenger RNA?

Staphylococcus aureus is a feared pathogen (MRSA, multi-resistant S. aureus) due to frequent resistances against many antibiotics, especially in hospital infections. Researchers at the Paul-Ehrlich-Institut have identified immunological processes that prevent a successful immune response directed against the pathogenic agent. The delivery of bacterial proteins with RNA adjuvant or messenger RNA (mRNA) into immune cells allows the re-direction of the immune response towards an active defense against S. aureus. This could be of significant importance for the development of an effective vaccine. PLOS Pathogens has published these research results online on 25 May 2017.

Staphylococcus aureus (S. aureus) is a bacterium that colonizes by far more than half of the skin and the mucosa of adults, usually without causing infections....

Im Focus: A quantum walk of photons

Physicists from the University of Würzburg are capable of generating identical looking single light particles at the push of a button. Two new studies now demonstrate the potential this method holds.

The quantum computer has fuelled the imagination of scientists for decades: It is based on fundamentally different phenomena than a conventional computer....

Im Focus: Turmoil in sluggish electrons’ existence

An international team of physicists has monitored the scattering behaviour of electrons in a non-conducting material in real-time. Their insights could be beneficial for radiotherapy.

We can refer to electrons in non-conducting materials as ‘sluggish’. Typically, they remain fixed in a location, deep inside an atomic composite. It is hence...

Im Focus: Wafer-thin Magnetic Materials Developed for Future Quantum Technologies

Two-dimensional magnetic structures are regarded as a promising material for new types of data storage, since the magnetic properties of individual molecular building blocks can be investigated and modified. For the first time, researchers have now produced a wafer-thin ferrimagnet, in which molecules with different magnetic centers arrange themselves on a gold surface to form a checkerboard pattern. Scientists at the Swiss Nanoscience Institute at the University of Basel and the Paul Scherrer Institute published their findings in the journal Nature Communications.

Ferrimagnets are composed of two centers which are magnetized at different strengths and point in opposing directions. Two-dimensional, quasi-flat ferrimagnets...

Im Focus: World's thinnest hologram paves path to new 3-D world

Nano-hologram paves way for integration of 3-D holography into everyday electronics

An Australian-Chinese research team has created the world's thinnest hologram, paving the way towards the integration of 3D holography into everyday...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Marine Conservation: IASS Contributes to UN Ocean Conference in New York on 5-9 June

24.05.2017 | Event News

AWK Aachen Machine Tool Colloquium 2017: Internet of Production for Agile Enterprises

23.05.2017 | Event News

Dortmund MST Conference presents Individualized Healthcare Solutions with micro and nanotechnology

22.05.2017 | Event News

 
Latest News

How herpesviruses win the footrace against the immune system

26.05.2017 | Life Sciences

Water forms 'spine of hydration' around DNA, group finds

26.05.2017 | Life Sciences

First Juno science results supported by University of Leicester's Jupiter 'forecast'

26.05.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>