FM128 Legal - Implications of the Corporate Manslaughter Bill
Peter Thompson explains the latest version of the Corporate Manslaughter Bill*, and why it concerns every director of every company in the country.
Published by the Faculty of Finance and Management, Issue 128, December 2005 - Legal
At present the offence of corporate manslaughter is governed by common law and requires the prosecution to prove beyond reasonable doubt not only that an unlawful killing took place but that:
- a responsible person within the company controlled the activities resulting in the death of the individual (the so-called 'controlling mind'); and
- that person was grossly negligent so as to be responsible for the death and could be - and generally is - also prosecuted, as an individual, for the offence of manslaughter.
What the Corporate Manslaughter Bill now proposes
In 1996 the Law Commission prepared a paper for the Lord Chancellor on 'involuntary manslaughter', with particular reference to corporate manslaughter, and made a number of recommendations on what was to be a new offence of 'corporate killing'. Much was said on the subject over the intervening years, but apart from an initial draft bill several years ago little had been done to progress this issue.
Now, however, active interest has been revived. On 23 March this year, the home secretary introduced the new draft Corporate Manslaughter Bill and invited responses from industry, trade unions and other interested parties by 17 June 2005 .
Whether this latest bill becomes law cannot be confidently predicted, as it is not the first draft bill to be considered in the last nine years. Company directors cannot afford to ignore the implications, should it succeed.
Defining the terms
The bill introduces the statutory offence of corporate manslaughter, which occurs:
"if the way in which any of the organisation's activities are managed or organised by senior managers causes a person's death and amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased".
A senior manager, for this purpose, is defined as:
"a person who plays a significant role in the making of decisions about how the whole or a substantial part of the organisation's activities are to be managed or organised or if that person plays a significant role in the actual managing or organising of the whole or a substantial part of those activities".
The bill also explains that a breach of duty of care by an organisation is a gross breach:
"if the failure in question constitutes conduct falling far below what can reasonably be expected of the organisation in the circumstances".
Further, the bill makes clear that a duty of care is owed not only to employees, but also to those who might reasonably be expected to be affected, namely visitors to an office or site and the public at large where goods and services are provided.
Significantly, unlimited fines are now proposed for organisations (which will include government departments) guilty of corporate manslaughter. The bill also proposes that the court would have the power to require the organisation to take specific steps to remedy the breach, as the court sees appropriate, and a failure to comply could be dealt with summarily with a fine limited to £20,000, or, upon indictment, with an unlimited fine.
'Controlling mind' - the current law
It should be remembered that the common law offence of manslaughter will still remain an available option to prosecute individuals, and the fact that the company will also be liable for corporate manslaughter will not preclude the prosecution of those individuals.
Historically, corporate manslaughter as an offence has not been before the courts that long. Manslaughter was thought to be an offence only capable of being committed by a human not a corporate body. However, Lord Justice Bingham in H M Coroner for East Kent ex-parte Spooner (1987) observed that he was "tentatively of the opinion" that an indictment would lie against the company as well as the individual.
Then in P & O European Ferries (Dover) Limited (1991) , (into the circumstances of the 'Herald of Free Enterprise' case which resulted in 187 passenger deaths), Mr Justice Turner concluded that a company could also be deemed guilty of the offence of manslaughter provided that you could find somebody within the company, who was controlling the relevant activities leading to the death, equally responsible.
Since the collapse of the 'Herald of Free Enterprise' disaster case, where the individual defendants were acquitted, a number of major fatal incidents have also resulted in unsuccessful prosecutions against individuals and companies. Such cases include the Kings Cross Underground fire (killing 31 people), the North Sea Piper Alpha oil platform tragedy (167 people lost) and the Clapham Rail crash (35 deaths, 500 injured persons). In each case the prosecution could not show that the relevant acts were committed by those persons identified as the 'controlling mind', responsible for the gross negligence causative of the accident.
However, when it comes to smaller companies the requirement of finding the controlling mind is not such an obstacle. In Regina (R) versus (v) Kite and OLL Limited, which involved the drowning of four teenage students on a canoeing trip, the managing director of the leisure company was found to have been the man responsible for organising the event and, upon conviction, was sentenced to a period of imprisonment, reduced to two years on appeal. The company was also convicted of corporate manslaughter.
The difference seems to be the confusion of responsibility in larger organisations which has resulted in the failure to convict either the individuals or the company.
Current financial penalties
Whilst convictions of companies for the offence of corporate manslaughter have accordingly been few, the public at large has demonstrated forcefully its discontent that large companies are not being held to account.
In fact this public perception is not strictly true. Whilst the company might not be successfully prosecuted for manslaughter there may well be other offences contrary to the Health and Safety at Work Act 1974 or indeed other statutes leaving the company open to prosecution and potentially substantial fines.
In R v Howe and Son (Engineers) Limited (1998) the Court of Appeal laid down guidelines for sentencing in offences contrary to the Health and Safety at Work etc Act 1974, which were reinforced in R v Jarvis C A Crim on 26 May 2005. The fines for companies involving fatalities and subsequent prosecution for failing to meet required standards of care for its customers have included:
- R v Great Western Trains (1999): seven died and 150 injured - Great Western Trains fined £1.5 million;
- R v London Underground (1999): a passenger fell between train and platform - London Underground fined £300,000; and
- Network Rail and Balfour Beatty fines arising from recent convictions in Hatfield rail crash trial, £3.5 million and £10 million respectively.
There has also been growing demand for a change in the offence affecting corporate prosecution so that there would not be a need to prosecute individuals to conviction of manslaughter themselves before the company could be convicted of the offence.
Whilst a convicted company can anticipate a substantial fine, the individual person held responsible must still face the real prospect of an immediate custodial sentence.
Both the Health & Safety Executive and the police are anxious to reduce the number of deaths in industry as well as on public transport and would be delighted if their task were made easier for the prosecution and conviction of a company should the new bill be put on the statute books.
The ruling in July 2005 in the Hatfield prosecution that individual manslaughter charges should be dismissed at the end of a seven-month trial was yet another example of the difficulty of proving a case within the current parameters of the law and another reason for the home secretary to press ahead with new statute law on the topic. The even more recent acquittals of five senior rail executives in respect of alleged breaches of safety standards in September 2005 in the Hatfield trial simply adds to the public outcry for changes to be made to the law, sooner rather than later.
Directors of companies will continue to be scrutinised carefully with regard to the manner in which they conduct their business and are at risk of finding themselves in the dock for manslaughter along with their company, but companies will find themselves more easily convicted when the conviction of a director with responsibility for the negligence is not a prerequisite to the conviction of the company for the offence of manslaughter.
Conclusion: conduct a corporate health check
The onus must now be upon all directors of companies to ensure that health and safety is at the top of the agenda and vigorously enforced. Further, it will not just be the health and safety director that will find himself in the dock along with the company; it may well be any senior manager.
A failure to take this message on board now and to implement procedures within the company to ensure health and safety of employees and the public will only result in the most serious of consequences in the future to companies and their directors.
* To view the draft Corporate Manslaughter Bill, and for further information, visit the Home Office web site at www.homeoffice.gov.uk
About the author
Peter Thompson is a consultant with insurance law firm Davies Lavery, having previously practised as a barrister for 27 years, specialising in criminal prosecutions. He successfully conducted the defence in Regina versus Euromin, a Health and Safety Executive corporate manslaughter prosecution.