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Due Diligence and You

When you’re accused of a breach of a statutory


regulation, the law assumes you to be GUILTY - it’s
then up to you to prove otherwise. The law will consider
a defence of ‘due diligence’, but that’s not easy to
prove. Without considerable pre-investment in people,
facilities, work management and information systems,
your chances of success are slim. Nevertheless,
prevention is infinitely better than the alternative…

falling foul of the law have dramatically


Guilty until proven innocent increased in recent years. As a result, both
When the authorities accuse you of a your organisation and you personally are
breach of health, safety or environmental now facing the real prospect of criminal
regulations, you’re deemed to be guilty sanctions for involvement in strict liability
and the onus is on YOU to prove your regulatory offences. If ever you experience
innocence. This is because a breach of this this misfortune, forget about claiming that
type of regulation is a ‘strict liability’ the alleged unlawful act or omission was
offence – the Law says that your duty is unwitting or unintentional - it will hold
‘absolute’. very little sway with the authorities.

Strictly liable Personally accountable


Usually, before someone can be found The issue of personal accountability has
guilty of a criminal offence, it has to be hotted up recently as a result of the many
proven that the alleged perpetrator had a deaths caused in multiple rail disasters
‘guilty mind’ (or mens rea for those into triggered by faulty track and trackside
legal-speak). This means that the unlawful equipment and the deadly 2002 outbreak
act was committed intentionally, of Legionella in Barrow-in-Furness. In this
recklessly and without due care as to its incident, 7 people died and another 172
consequences. However, in the case of a were infected with the disease as a direct
so-called ‘strict liability’ criminal offence, consequence of deficient preventive
the authorities are not required to prove maintenance. The public has become
that a ‘guilty mind’ guided the unlawful increasingly intolerant of these gross,
act. The act is sufficient in itself to point engineering-related mistakes and is
the finger of guilt at the accused. Most of demanding that the individuals responsible
us have had some experience of this are held more strictly and personally
approach in relation to road traffic accountable for their negligent acts and
offences! The same forceful manner of omissions.
enforcement applies to regulations framed
under UK health, safety and Prevention is smartest
environmental law. It’s worthwhile taking every possible step
to avoid a breach of statutory regulation
This reverse onus of proof affects all that can bring that unwelcome knock on
organisations and has serious implications the door from the law enforcement
for those involved in facilities and authorities. It’s not just for the moral
maintenance management. As regulation imperative of not placing others and the
and red tape mounts, your chances of environment in potential danger; it’s in
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© Copyright 2005 Shire Systems Limited
your own best interests and makes clear beyond your control: AND, exercising due
economic sense. Without doubt, this is a diligence, you took all ‘reasonable’
situation where prevention is infinitely precautions to avoid the commission of the
better than cure. Avoiding the risk of offence by yourself or any person under
prosecution is a no-brainer. your control.

Besides the personal trauma you, your What a court will accept as ‘reasonable’
family and members of your management precautions varies according to the nature
group could experience, you will avoid the and scale of the actual and potential
considerable costs to you and your consequences of the offence and the size
organisation of a criminal investigation and resources of your organisation. There
and prosecution. A prosecution for a are no definitive legal guidelines as to
regulatory offence brings with it a whole what ‘reasonable’ actually means – the
series of associated calamities. First, there court will make a determination in each
are the legal-related expenses (solicitor case. It’s safe to assume that if you have
and barrister’s fees, court costs, fines and any doubts whatsoever about the
compensation - and possibly further sufficiency of the regulatory compliance
damages awarded to a victim by a civil provisions you or your organisation have
court). Remember, you may have to fork made, the chances are that the court will
out personally for some or all of these. also take a dim view of the situation and
Second, there’s the consequential loss to find against you.
the organisation of diverting key people’s
time and attention away from the value- Wherever the well-being of the public is
adding activities of the business. And concerned, the authorities and courts have
third, even if you’re eventually big expectations in respect of the duty of
exonerated, ‘mud sticks’ and the adverse care that must be exercised by any
publicity and damage to reputation can be organisation. In these circumstances, the
significant. Your career is quite likely to legal requirements are very demanding
take a nose-dive. and you can expect major trouble when
you haven’t fulfilled them and you’re
To assure peace of mind and economic caught out. The Food Safety Regulations
well-being, if not your continuing liberty, and Control of Major Accident Hazards
you have to be proactive, analytical and, as (COMAH) Regulations are just two of the
we shall see later, scrupulous in your many sets of regulations requiring very
record keeping. With a little foresight and, strict standards of diligence.
admittedly, a considerable amount of
spadework, you can avoid ending up Under due diligence provisions, the
facing a court of law. liability for the acts and omissions of
parties under your control is a notably
Due diligence defence onerous accountability. You’ll have to
Because strict liability regulations are so have in place fairly watertight selection,
stringent, the law has provided for the training and competency review and
defence of ‘due diligence’ to bring some assurance measures, as well as work
balance to a situation that, on the surface, monitoring and control systems for both
seems a bit harsh and unreasonable. internal staff and contractors. The
challenge this presents can’t be
You can prove your innocence by underestimated. The pervasive and ever-
convincing the court that the alleged present threat of human failings - errors,
offence was due to a mistake or reliance mistakes and malicious acts - presents
on information supplied by others, the act serious difficulties for anyone accountable
or omission of another person not under for legal compliance. Without appropriate
your control, or an accident or other cause measures being in place to counter human
failings, they can easily undermine what
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you believe to be your best laid plans – the face, but it will almost certainly be
and you’re always answerable for the fruitless.
adverse consequences.
The law requires you to have carried out a
When alerted to an offence, the authorities thorough risk assessment of your
will launch an investigation. They will operations and put in place procedures and
very likely go through your policies, monitoring & control systems that will
procedures and records with a fine-tooth ensure continuing integrity and safety. The
comb to establish the facts and form a onus is entirely on you and your
view of your circumstances, attitude and organisation to decide on and implement
behaviour before reaching their findings. adequate provisions in accordance with
If they don’t like what they have your own circumstances and assessment of
discovered, they’ll identify the guilty the prevailing risks. As a result of moving
parties from the company’s accountability to this risk-based approach, the authorities
structure – the organisation chart and job have, in general, become quite ‘hands off’
descriptions. Those individuals will then on a day-to-day basis. In most industries
find themselves in court. Where lines of they will usually leave you alone – that is,
responsibility are unclear, the authorities until something bad happens and the
will go up the organisational tree until they balloon goes up. Then, you can expect
identify a job holder with indisputable very close attention indeed.
overall responsibility: that may well be a
board member. You can be in breach of the regulations in
a multitude of ways, so you’ll need to take
Whilst accused individuals may protest an analytical and ‘systems’ approach to
their innocence, they can only prove it by countering the threats. Besides the
placing satisfactory factual evidence comprehensive risk assessments which
before the court. When an accused form the foundation of your compliance
individual can’t, the court will inevitably measures, you’ll need to have in place an
convict as charged. enabling framework of sound policies,
procedures and control systems - and
Getting yourself off provide for an auditable history of all
Documentary pertinent actions and events. According to
evidence is vital for a the specific regulation, you will need all of
successful defence of the following records, and this list is not
due diligence. We’re exhaustive: policies, procedures, job
in the information descriptions (with written personal
age and it’s a acknowledgement of responsibilities),
paperwork and data- training records, inspection and test
driven world we live exhibits, ‘as-built’ plant schematics and
in. Because of the other drawings, maintenance plans,
nature of the non- purchasing specifications, warranties,
compliance offences, the court will seek permit to work records, schemes of work,
evidence of guilt or innocence from hard O & M manuals, incident reports, material
copy records and computer files. In some issue and job history and systems audit
cases, the court may accept verbal findings - with descriptions of corrective
testimony, but the investigating authorities and preventive measures taken. The
rarely will. So, don’t count on being able records should all be detailed, up to date
to talk your way out of it – it won’t work! and filed for easy retrieval.
Just as in quality systems auditing, ‘if it’s
not documented, it didn’t happen’. You Some words of advice. The court will
can explain and argue until you’re blue in view the orderliness of your records
system as a fair indicator of the extent of
management control you have. Murphy’s
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Law makes it likely that the records you duties, then you might find yourself alone
haven’t attached much importance to are in the dock, facing the rap all on your own.
the very ones you’ll need to get yourself Common interest and brotherhood is
out of a scrape. frequently abandoned when self
preservation is at stake. It can be a dog eat
Because of the seriousness of some dog world at times!
breaches of regulation, it’s good practice
to configure systems and prepare Final words
particular documentation with the thought New statutory regulations are often issued
in mind that the records are going to be with a preamble to the effect that ‘if
used as part of a future legal defence. you’re already doing things in the right
There’s little doubt that the quality of your way, you will not need to take any further
systems and documents will ratchet up a action as a result of these regulations’. The
couple of notches when compiled with this law doesn’t require you to adopt best
in mind. The decision as to which records practice, just reasonably good practice – in
should receive particular attention should fact the law is extremely fair and
be identified as part of your risk reasonable in its expectations of your
assessments. For each activity, ask social responsibility. If you do more than
yourself: What’s the worst thing(s) that the law requires to discharge your
could credibly happen? If and when it compliance obligations, it will, with little
happens, what records must I have to doubt, be advantageous for your business.
demonstrate I’ve put in place reasonable The organisations that apply best practice,
management control? What information especially in respect of asset management,
and level of detail is needed in these are invariably the most successful ones.
records to demonstrate reasonableness and The regulatory requirements in relation to
due diligence? health, safety and the environment add
intrinsic value and directly benefit your
Your records need to be time and date organisation’s overall day to day
stamped. You should be able to show that performance.
your critical information systems are
robust and tamperproof – you must have Finally, some questions calling for truthful
adequate procedures in place to prevent answers. Do you know and understand all
the falsification of critical records. You the regulatory requirements that apply to
should be able to demonstrate effective your work and area of responsibility? Is
change control and the ability to pursue an your organisation compliant with all
audit trail through your record systems. applicable regulations? If not, and if you
Remember, the amount of diligence have any doubts whatsoever, have you
expected from you depends on the scale of informed your boss or other responsible
the risk, that is, the likelihood and persons in explicit terms and in writing?
consequences of those worst-case, credible Do they understand the possible
events identified in your risk assessments. consequences of the situation? Have you
colluded in sweeping any compliance
Dog eats dog problems under the carpet? Where do you
If you find yourself accused of a statutory stand? Have YOU shown due diligence?
offence, you shouldn’t rely too much on
unbounded, selfless support from your
manager or your organisation! They may
well be in the dock alongside you – but, if
they can convince the authorities or the
court that they delegated responsibility to
you diligently, taking all reasonable steps
by training and supporting you in your

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