A new law on corporate manslaughter could see managers in court.

The Corporate Manslaughter Act will hold trusts criminally liable for deaths on their premises where there is a 'gross breach of the relevant duty of care'. It was given royal assent last Thursday and will come into effect in April 2008.

Individual executives, non-executives and clinicians will not be prosecuted but they might have to appear in the criminal courts to give evidence. If convicted, organisations will receive an unlimited fine.

NHS Confederation policy director Nigel Edwards warned that the potential criminalisation of major mistakes could lead to trusts 'losing the ability to honestly examine what was going wrong'.

'Rather than saying, "that doesn't work, what can we learn?" they may say, "how can we make sure we're safe from being prosecuted?" It's a worry,' he said.

Managers in Partnership chief executive Jon Restell said the union would issue guidance to its members. 'We do not want to frighten people but they should be well prepared. It is an issue managers need to be aware of,' he said.

David Firth, a partner at law firm Capsticks, said senior managers need to ensure they are running organisations effectively and that 'it is even more important' to follow advice from government bodies.

He said financial penalties imposed under the new law are expected to quickly outstrip those set by crown courts following a death in healthcare. These have remained below£100,000.

Those responsible for managing the way an organisation is run have to pay attention to best practice and follow advice that comes down from the Department of Health, the ethics committees and the Health and Safety Executive, he explained.

Although no-one would be jailed under the new law, the knock-on effect of being 'a convicted corporate killer' would mean a loss of reputation and public and staff confidence.

The Department for Work and Pensions identified healthcare as the area of greatest risk after the construction industry. But Mr Firth added: 'Well-managed trusts have nothing to fear.'

Steve Walker, chief executive of the NHS Litigation Authority, which handles the civil consequences of negligence and breach of duty, said that he 'did not anticipate a high volume of cases' under the new law.

The Medical Defence Union, which advises members on matters that might arise from clinical duties, said more doctors and nurses could be investigated and interviewed under caution as police try to distinguish between an individual error and corporate responsibility.

MDU solicitor Ian Barker said: 'It would be profoundly regrettable, in the context of the act, if trusts used such an opportunity to downplay their own responsibility, perhaps by highlighting individuals' mistakes within systems failures.'