Whakaari / White Island: lessons for directors following dismissal of WorkSafe charges against directors

In the latest in a series of decisions relating to health and safety prosecutions of those involved in tourism to Whakaari / White Island, the charges against the directors of Whakaari / White Island's management company, Whakaari Management Limited (WML) have been dismissed due to lack of evidence.
 
WML's three directors were each charged (in addition to WML itself) under s 44 of the Health and Safety at Work Act 2015 (HSWA) with failing to exercise the necessary due diligence as a director of WML to ensure WML complied with its duties under the HSWA, particularly relating to seeking expert advice about risk. After WorkSafe had called its witnesses and closed its case, the directors applied for the charges against them to be dismissed as there was insufficient evidence to establish a case to answer.
 
The Court's oral judgment granting the directors' application and dismissing the charges has recently been released. Judge Thomas found that WorkSafe had not produced sufficient evidence to allow the Court to assess what each of the three directors had done by way of due diligence – it was insufficient to consider the actions of the board as a whole.
 
The Court said it would have to consider individual due diligence by asking questions such as whether the directors argued or disagreed on how much should be done, or whether one director did all they could do but was simply outnumbered. The role of each director was potentially relevant. There was no evidence to allow the Court to assess those kinds of questions. WorkSafe had not obtained copies of board or management meeting minutes from WML relating to internal decision making. This meant that WorkSafe could not prove that any individual failed to exercise due diligence, even if the board as a whole was not managing risk appropriately.

There is no indication yet whether WorkSafe will appeal.
 
While the decision is brief, there are important lessons for directors and other officers:

• The due diligence obligation is personal to each director (or other officer) and their conduct is also to be considered individually.

• It is therefore important for directors to be able to show what they personally did by way of due diligence. This may include ensuring their views are recorded in meeting minutes and that if they dissent from a decision, that this is on the record.

• The best protection for directors is to ensure that board processes do appropriately deal with risk, but each director remains responsible for discharging their own personal duty, including by reviewing and critically considering relevant management reports.

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