Legislation to change the common law offence of gross negligence manslaughter as applicable to companies (corporate manslaughter for short) was introduced last year, but it failed to get through the parliamentary process. The Government is having another go this year and there seems a reasonable prospect that the Corporate Manslaughter and Corporate Homicide Bill (the Corporate Manslaughter Bill) will receive Royal Assent in July this year. With those sections of the 2006 Act which place directors' duties on a statutory footing slated to come into force in the autumn, it is worth considering what, if any, additional burden the Corporate Manslaughter Bill will place on directors.
The origins of the Corporate Manslaughter Bill can be traced back to 1990, when the P&O Ferries trial, which followed from the Herald of Free Enterprise disaster, collapsed, despite the fact that (according to the public enquiry into the tragedy) 'the directors [of P&O Ferries] did not have any proper comprehension of what their duties were…from top to bottom, the body corporate was infected with the disease of sloppiness.'
As culpable as the conduct of the directors of P&O Ferries may have sounded, the prosecution for corporate manslaughter failed because it was impossible to prove beyond reasonable doubt (as the common law requires) that an individual director or officer who embodied the company was personally guilty of gross negligence which caused death. To those familiar with the law, it was ever thus; the only successful prosecutions for corporate manslaughter have been in the case of small companies where there has been little or no division between the management of the company and its day to day operations; for larger concerns with layers of bureaucracy separating operational control from the directing mind of the company, prosecutions have always failed.
Still, 192 people lost their lives at Zeebrugge. The outcry which ensued from the unsuccessful prosecution was therefore predictable and the Law Commission was soon spurred into action, publishing a report in 1996 proposing a new offence of corporate killing.
The end result is the Corporate Manslaughter Bill which abolishes the old common law offence of corporate manslaughter. Under the proposed new law, if there has been a gross breach of a duty of care which causes death, where a substantial element of the breach lies in the way the senior management managed or organised the company's activities then the offence will be made out. Crucially then, guilt may be established by aggregating the acts and omissions of 'senior management members', whether of the organisation as a whole or of particular parts of the business. (There is one other key change in the law to note; Crown immunity from prosecution is removed by the new law (save in limited instances) and thus many public bodies which were formally exempt from prosecution are now no longer so).
And the penalty on conviction? Unlimited fines are proposed. Remedial action orders can also be imposed, requiring companies to remove unsafe systems, with further financial penalties available if the remedial action is not adhered too. Few could object to this; indeed there would be little point, as such penalties can in substance already be imposed under the Health And Safety At Work Act 1974. For instance, in October 2005, Mr Justice Mackay imposed record fines on Balfour Beatty and Network Rail for their part in the Hatfield train crash, for 'one of the worst examples of sustained industrial negligence' ever encountered. The accident, in which four people lost their lives, was said by the prosecutors in the case to have occurred because of a 'cavalier approach' to safety.
So what then is the purpose of the Corporate Manslaughter Bill if the remedies it seeks to create already exist? When the Government introduced the Bill, David Blunkett, the then Home Secretary, said that the new law was required, 'in order to secure public confidence…[It] must bite properly on large corporations whose failure to set or maintain standards causes a death. It is not targeted at conscientious companies that take their health and safety responsibilities seriously.'
But if the Corporate Manslaughter Bill is a health and safety measure, then one would have expected an explanation of the shortcomings in the Health And Safety At Work Act and provisions to deal with the deficiencies. The fact that there has been no explanation and no such provisions speaks volumes.
The truth of the matter is that the impetus for a change in the law came from factions (including unions and victims groups) which wanted to see directors held personally responsible for corporate manslaughter, precisely in those circumstances where the existing law failed to provide sufficient means to convict them personally of the same crime. As the TUC said in its response to the Government consultation on proposals to change the law, '…it is fundamental that criminal liability for management applies not only to the corporate body…but also to the…directors and very senior personnel who are ultimately responsible for the management failure.'
It is entirely understandable (and correct in my view) that the Government felt unable to attach criminal liability to directors personally without clear evidence of guilt. But without such provisions, there is very little new ground here (other than the removal of Crown immunity as noted above) and it is highly questionable therefore whether the Corporate Manslaughter Bill has been worth the legislative time which it has consumed.