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Compliance officers and the virus: what you need to know

Peter FitzGerald and Amalia Neenan, Peters & Peters, Of Counsel and legal researcher, London, 15 September 2020


A new wave of Corona-centric litigation is on the horizon. Some of this is going to revolve around legislation that few last year would have connected with epidemics, especially the UK’s Proceeds of Crime Act.

The number six has long had a special place in history. Henry VIII famously had six wives. Aristotle mused that dramatic tragedy was composed of six foundational parts. And now we face ‘The Rule of Six’ – the latest slogan to be touted by politicians and media outlets alike in the fight against the Coronavirus. As of Monday 14th September, social gatherings in England will be limited to six people.

The speed and nature of the implementation of these new restrictions indicate that the threat of the pandemic is far from over. In order to maintain a level of business continuity in these ever-changing times, the offsetting of the risk of either infection or business interruption should be a priority for compliance departments. Banks and other financial institutions must remain alive to compliance issues raised by their HNW clients’ activities and should therefore be aware of the range of new exposures to liability presented by the virus.

This is an issue that is not going away, as workplaces and commercial buildings continue to reopen and the risk of criminal liability to which they are vulnerable if they do not allay the threat of people contracting the virus on their premises, is presented in many different forms. A new wave of Corona-centric litigation is on the horizon. A proactive and diligent stance must, therefore, be taken in order to shield from the economic threats created by the global pandemic.

Risky business

The range of legislative provisions that could lead to potential criminal liability is extensive. Take, for example, the Health and Safety at Work etc. Act 1974. The general provisions under section 2(1) stipulate that “it shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees.” In the current climate, this must extend to ‘Covid-proofing’ the environment by building up adequate safeguards such as one-way systems through buildings, the provision of personal protective equipment or PPE, or hand-sanitation protocols. Especially interesting is section 3(1) which extends liability in relation to an employer’s dealings with third parties and individuals not under his/her employ: “It shall be the duty of every employer to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that persons not in his employment who may be affected thereby are not thereby exposed to risks to their health or safety.” Failure to discharge either of these duties is an offence contrary to section 33(1)(a). A similar duty also applies under the Occupiers Liability Act 1957, which provides that occupiers have a duty to ensure the safety of visitors. Pursuant to section 2(2), an occupier must “take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.” This can extend to the relationship between bankers and their HNW clients.

Owners/occupiers should also take heed of the provisions encapsulated in the Corporate Manslaughter and Corporate Homicide Act 2007. Section 1 stipulates that an organisation may be “guilty of an offence if the way in which its activities are managed or organised — (a) causes a person’s death, and (b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.” The “relevant duty of care” is defined in section 2(1) as a duty of care “in relation to an organisation, means any of the following duties owed by it under the law of negligence— (a) a duty owed to its employees or to other persons working for the organisation or performing services for it; (b) a duty owed as occupier of premises; (c) a duty owed in connection with— (i) the supply by the organisation of goods or services (whether for consideration or not), (ii) the carrying on by the organisation of any construction or maintenance operations, (iii) the carrying on by the organisation of any other activity on a commercial basis…”.

For the purposes of the Act, a “gross breach” is defined under section 4(b) as occurring when “the conduct alleged to amount to a breach of that duty falls far below what can reasonably be expected of the organisation in the circumstances”. The “circumstances” at present are set against the backdrop of mass infection. Therefore, any arrangements or activities engaged in by an organisation that will heighten the risk of infection are likely to qualify as a breach of duty. What can “reasonably be expected” of an organisation in the proper discharge of this duty and in these specific circumstances is to provide means to regulate excessive human contact and transmission by implementing social distancing measures and more and more hygienic protocols.

Corporates, as well as individuals, should also be wary of incurring liability in contravention of the common law offence of gross negligence manslaughter. This offence is committed where a death results from a grossly negligent act or omission on the part of another.

The test for the composite elements of the offence was established in R v Adomako [1991] 1 AC 171 and more recently was reiterated in R v Rudling [2016] EWCA Crim 741, where it was reaffirmed that the law “can be summarised as being the breach of an existing duty of care which it is reasonably foreseeable gives rise to a serious and obvious risk of death and does, in fact, cause death in circumstances where, having regard to the risk of death, the conduct of the defendant was so bad in all the circumstances as to amount to a criminal act or omission.” During the current global health crisis, the threat of death posed by Covid-19 is rightly classified as a “serious and obvious” risk that corporates and individuals need to know about. It is vital to note, however, that – much like the aforementioned offence of corporate manslaughter – this offence, too, requires the existence of a duty of care. A negligent act, regardless of how severe it is, will not be classed as gross negligence manslaughter if there is no pre-existing duty of care.

Once more unto the breach…

The execution of any duty of care is based on an objective standard of reasonableness. It will therefore be a breach if no reasonable and competent person, in the same position as the defendant, would, in the same circumstances, have acted in the same manner. Consequently, standards of reasonableness will be influenced by the current outbreak of disease.

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