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07/09/06 Supply Management - Keep your eye on the road
In the light of new legislation on corporate manslaughter, Adele Burton discusses how fleet managers can deal with safety issues and alert the company board to the fact that they could become directly accountable.
Responsibility for corporate manslaughter is becoming something of a grey area. Most company board members are aware of their legal responsibilities for the health and safety of employees at work, but many fail to appreciate how that applies to company car drivers.
Awareness needs to be raised. The current Road Safety Bill and impending Corporate Manslaughter Bill could make companies and board members answerable for fatal accidents involving their drivers.
“Legislation has highlighted that boards are directly accountable for ensuring the safety of their employees’ working environment,” says Tracy Pepper, managing director at fleet management group FMG Support. “Although the focus has shifted from prosecuting individual directors to companies as a whole, any criminal charges that are brought against a business for breach of health and safety regulations have serious implications for profits, employee wellbeing and reputations, all of which are responsibilities of the board.”
Legal changes
Corporate manslaughter can be committed by a company in relation to a work-related death. Proving corporate manslaughter has been difficult in the past, but the Corporate Manslaughter Bill, which will update existing laws, will enable businesses and directors judged seriously at fault to be brought to justice.
The government is currently redrafting the bill and intends to “legislate without delay as soon as parliamentary time allows”.
This new legislation will back the Road Safety Bill introduced in May 2005, which contains measures, including drink-driving, speeding and driver penalties, designed to help achieve casualty reduction targets and improve road safety.
Jeremy Hay, director of risk management company Essential Risk, says: “Where a fatality occurs involving an occupational driver, the management of the driver’s activities will be compared to the Health and Safety Executive (HSE) guidance to establish whether a breach has taken place.”
“This can be used by both the civil and criminal courts as the benchmark of what is reasonable conduct when considering a breach. Unless the recommendations in the guidance are being followed by senior managers and they can demonstrate that there is a reasonable process in place for managing the risk, the impact of a fatal accident is likely to be felt in the boardroom.”
When investigating a potential case of corporate manslaughter, the police and the HSE will look into every aspect of the company’s fleet policy and procedures.
Robert Constant, founder of Constant Consultancy Services, explains: “The police will want to know how occupational road risk is managed and how guidance is implemented to employers in respect of their duty of care obligations to staff who drive on company business, contained in the HSE publication ‘Driving at Work – Managing Work-Related Road Safety’.”
“Although the directors of a company are ultimately responsible for health and safety, if the police find the fleet manager has been negligent – such as failing to ensure that the fleet was fit for purpose and roadworthy, drivers were correctly licensed, competent and familiar with their vehicles – they could also face prosecution.”
It is often the fleet manager’s duty to inform board members of legislative and policy changes regarding company car drivers.
Andrew Price, practice leader for motor fleet at Zurich Risk Services, says: “Most fleet managers are well aware of the work-related road risk management issues, although there is less awareness of what practical measures can be taken to manage them. One of the biggest obstacles fleet managers have is persuading their colleagues, and especially the senior managers and board members, that their organisations need to act to manage the risks faced by its employees on the road.”
It’s the financial implications which need to be shown to the board, and fleet managers must show how risk strategies can eventually produce cost savings.
Pepper explains: “This is the only way to ensure that the issue of fleet safety strikes a chord with chief executives and financial directors. The realty is that the message relating to corporate manslaughter and liability is not hitting home. Communicating the commercial benefits will gain buy-in at board level and will eradicate the reluctance to give the issue rightful attention beyond legal compliance.”
Research by FMG Support has proved there is a lack of awareness of risk issues on the part of board members. More than 90 per cent of senior decision-makers in the industry do not appreciate the value of fleet management and many said they did not consider the cost-saving implications of managing fleets effectively.
“While many companies realise the importance of health and safety and have stringent policies in place, many associate it with actions within the workplace, such as fire, spillages and machine-based incidents. The use of vehicles is viewed as a personal activity rather than business-related,” says Pepper.
Additional research from Norwich Union shows 96 per cent of fleet managers claim an ‘awareness and understanding’ of duty of care, but only two-thirds (64 per cent) are conversant with the requirements.
There are initiatives available to help companies address the issue of corporate manslaughter. The HSE Driving at Work guidance, which provides information and advice, can be found at www.hse.gov.uk. The Royal Society for the Prevention of Accidents (RoSPA) and members of the Occupational Road Safety Alliance have also been working together to raise awareness of corporate driving issues. The Department for Transport is making some progress to formulate best practice benchmarks in fleet risk management and the industry awaits recommendations from the HSE on reporting procedures this summer.
Andy Keane, motor underwriting manager at Norwich Union, says: “Companies need to get as much information about their operations as possible, including drivers’ behaviour, accidents and claims histories. They need to carry out risk assessments and work out what the hazards are, what they are exposed to and how they are going to manage and reduce risks.”
“Implementing a fleet policy is essential and this should include driver vetting and induction, license and vehicle checks, claims accident and investigation reporting, safety instruction, assessment of journey and routes. Companies have to look at vehicle cash option schemes too – if they are not actually providing a vehicle, they have to be just as concerned about management controls. They can’t avoid liability just because employees are driving their own vehicles on company business.”
Pepper adds: “Providing guidelines for the bare minimum of what is expected from companies is insufficient. More must be done and more awareness generated from the highest levels of those responsible for fleet.”
