Negligent care homes face unlimited fines

New legislation that will allow corporate manslaughter charges to be brought against negligent care homes may be just a few weeks away, but a new study by Venture Preference has revealed that many care home managers and owners remain completely unaware of the implications of the new law including the potential for unlimited fines.

The study also revealed that most care home managers are unable to even estimate how much they should be paying for insurance protection against claims under the new law.

According to the study conducted by Gold Direct, the care home division of Venture Preference broker Smart & Cook, four out of five care home owners/managers did not know when the new Corporate Manslaughter Act (CMA) was due to take effect, and two out of five had no understanding of the act itself.

Only 8% were aware that fines under the CMA are unlimited.

Researchers also asked care home managers how much they felt they were prepared to pay for insurance protection against claims that could be brought under the corporate manslaughter act. By far the biggest group (54%) were unable to name any figure. The next largest group (15%) were prepared to pay less than 5% of their total insurance bill, with a further 11% prepared to pay 5%-10%.

In general, care home owners/managers did not rank the introduction of the CMA as one of their primary concerns; a range of factors including increased parental rights among staff, staff shortages and harassment claims all came higher. But the new act appeared to be causing anxiety among those most aware of its impact. Owners and managers who displayed knowledge of the impending legislation felt markedly less well prepared for dealing with it compared to those who were unaware of its introduction.

In terms of their familiarity with the detail of the legislation, just over a quarter (27%) of those surveyed knew that the act covered the preventable death of a service user and a further quarter (25%) understood that it covered employers’ liability. The third most significant area of impact, according to the owners/managers, was in relation to negligence and gross neglect.

“A conviction for corporate manslaughter would bring with it severe penalties that many facilities may not survive and many managers and owners simply don’t seem to recognise.

Gold Direct’s Rosemary Bellin

Commenting on the results of the study, Gold Direct’s Rosemary Bellin said: “We wanted to understand the impact of corporate manslaughter on UK care homes in terms of both liabilities and the behaviour of care home management. What’s become clear to us is that there’s a profound lack of understanding.

“A conviction for corporate manslaughter would bring with it severe penalties that many facilities may not survive and many managers and owners simply don’t seem to recognise. The danger is that care homes are unaware and unprepared for the change in law, which could significantly affect their business.

“Due to the general lack of knowledge about the CMAct it is not surprising that most managers cannot put a value on the cost of protecting themselves with insurance.”

When asked if they had sufficient insurance cover to cope with an investigation by the Health and Safety Executive, 20% of managers/owners did not know.

The study sampled the views of 100 care home owner/managers and was conducted on behalf of Gold Direct by an independent research company.

The Corporate Manslaughter Act 2007 comes into force on 6 April 2008. The act creates an offence which means an organisation that causes death by gross negligence can be prosecuted. It applies across the UK to a wide range of organisations which include care homes, NHS bodies, GP partnerships and out-of hours providers. It has been reported that the new act could cost as much as £21.2m in legal fees.

In order to be convicted under the act, it must be proven that shortcomings in an organisation and its management substantially contributed to a breach of duty of care that caused the fatality.