Investigating Section 37 - Scope of Office of Directors

The Appendix states the following

9	"Section 37 requires an offence by a body corporate so you need to prove that a body corporate exists. In the case of incorporated companies (which may include some charities, schools etc) this can be done through Companies House. For other organisations reference may be made to a relevant Act or Order of Parliament, or to controlling/registering organisations such as the Charities Commission. (Note that there does not have to be a conviction, or even proceedings, against the body corporate to proceed against a director/manager using Section 37, but we have to prove that the body corporate committed an offence as part of the Section 37 case).
10	Directors and company secretaries are clearly within the scope of section 37. Whether a manager or similar officer comes within scope will depend on their ‘status’ within the body corporate that committed the offence. You will need to consider their position in the management chain and their scope and authority of office in practice. All investigations looking at the role of a particular individual, whether a director, manager or otherwise, should consider their scope/authority of office etc in relation to the matters under investigation.
11	In general we seek to avoid cases against both a company and sole directors, who are also the principal owners of the company, in circumstances where this would be regarded as prosecuting the same person twice. In this situation, you need to judge whether prosecution is more warranted against the individual or the company.
12	Evidence that someone is a director or company secretary of an incorporated company can normally be obtained through Companies House. Remember, however, the time allowed for companies to send information to Companies House. Where there is doubt it is wise to obtain witness evidence that a person is a director/manager.
13	Publicly available documents can help your investigation. Bodies corporate may have articles of association or other documents that identify directors, secretaries, managers, etc. These may include a memorandum of association, certificate of incorporation, the articles of association, and the annual return.
14	As well as public documents, there are internal documents that may help: • Letters and headed stationery. Business letters can indicate directors’ names, company registration number and registered address. It’s not obligatory for stationery to name directors but if it does then it should give the names of them all. • Annual reports. These can identify the principal senior officers of a company. They may give a useful indication of the organisation’s public commitments, but usually provide little information to help when considering prosecuting individuals. • Minutes. Board Minutes are legal records of what is decided at Board meetings. The Companies Act 1985 requires that they be kept. Other minutes (health and safety meetings or management meetings) can indicate the organisation’s effectiveness in managing health and safety risks, its knowledge/awareness of health and safety risks, as well as discussions on remedial action. • Other documents - for example organisation charts, records and significant findings of risk assessments, method statements, training records, results of discussions with employees’ representatives, records of monitoring, records of actions taken after previous incidents etc.
15	You will need evidence of an individual’s actual ‘scope of office’ regardless of whether the person is described as a director, secretary, manager or other officer. Your investigation should explore questions such as: • what kind of decisions is the individual charged with making? • what authority to direct and/or sanction investment, staffing levels, other resources? (Financial authority is only relevant in so far as it relates to the matters under investigation. It may not be relevant where an individual has failed to take steps to develop and implement working procedures that were clearly in his area of control and required no additional cost). • what authority to decide, direct and/or sanction policies and procedures? • what authority to take on new projects and direct work activity?
16	Reliable documentary evidence can be valuable. Job descriptions, contracts of employment, organisation charts, safety policies, minutes of meetings, purchase orders etc. all provide good evidence, provided the status and meaning of the documentation can be verified by reliable witness evidence from, for example, document users and authors.
17	A document that assigns duties or responsibility to an individual should not be taken at face value. For example, individuals may be assigned responsibilities by a safety policy that is unreasonable given their competence, support and authority. You should therefore verify the document as a current, established and true working document within the body corporate. We need to protect people from being held to account by policy documents that are not implemented in practice.
18	A statement from a colleague and/or subordinate giving descriptions of their understanding, experience and knowledge of an individual’s role can be valuable evidence if it relates to the witness’ first hand knowledge, such as actions personally observed, instructions personally issued or received etc. Don’t forget that ‘hearsay’ evidence from a witness of fact will not be admissible. ....
19	To be reliable, witness evidence referring to observations and instructions issued and received should be corroborated. A court will be unlikely to convict if the evidence boils down to one person’s word against another. It is also important to consider the credibility of witnesses giving evidence against an individual. A recent case failed because the court considered a key witness to be possibly biased. This was indicated by part of the witness’ evidence being inconsistent over time."