Discussion of Corporate Manslaughter

The area of corporate manslaughter has been much in the subject of discussions not only in the UK but also in other jurisdictions such as United States, Australia, Canada and etc.

Prior to the birth of the Corporate Manslaughter and Corporate Homicide Act 2007, the area was governed by common law.

Statistics has shown that there are over 40,000 people killed in ‘commercial related’ events between year 1966 and 2006. Under common law, only 34 companies were prosecuted and only 7 out of these 34 cases were given conviction [1] .

Dissatisfactions of the public toward the common law which failed to convict the corporations in several major disasters such as Zeeburge, Paddington and Southall had led to the push over for a reform in this area of law.

The long demanded and awaited reform of the area regarding corporate manslaughter was responded by the government via the Corporate Manslaughter and Corporate Homicide Act 2007. The Act received its royal assent on 26 July 2007 and came into effect on 6 April 2008.

Lots of discussions were made in the Parliament during the progress of approving the Bills. Several amendments were made during the passing stage. These had shown us the complexity of the area of law concerned.

The public expectation towards this new Act is high thus the changes brought in and effectiveness of the Act are needed to be discussed in depth. Improvements which can be made to the Act will also have to be suggested (if any) as a progress of reform toward the area of law.

1.0 Introduction

Corporations play very significant roles in our social and economy society as most of the economy and social activities take place through corporations. Many crimes do happen through corporations in this modern era. One of the most serious crimes which can be committed by a corporation is corporate manslaughter as it involves loss of human life. Corporate manslaughter, in a nutshell, is where death occurred as a result of corporation’s failures during the operation activities. Until today, the development of corporate criminal liability models is still in the stage of discussion and formulation. No single model can be claimed to be the best model. It must be acknowledged that the conviction of a corporation for corporate manslaughter involves many legal technical issues due to the basic fundamental problem of a corporation is an artificial person. And the artificial person is created by complex corporation legislations. Nevertheless, the urge for the punishment of the corporation involved in the commission of corporate manslaughter is well recognised and demanded by the public. As loss of human life is involved in this area of law, the urgency to formulate an effective legislation to cope with the offence is there. The main challenge in this area of law is to combat the complex legal technical issues by using minimal time and at the same time to ensure the efficiency of the legislation.

1.1 The basic legal technical issues

In order to constitute most of the criminal offences, the presence of Actus Reus (AR) and Mens Rea (MR) is needed to be proved. The term ‘corporate manslaughter’ has already indicated to us that the law is largely connected with both aspects of criminal law and corporate law. The principle of ‘separate legal personality’ of a company treats company as a separate body from it’s the directors or shareholders. Rather a company is treated as a separate individual. This was illustrated in the case of Salomon v A Salomon & Co Ltd [2] . The basic issue here is that the need to uphold the principle of ‘separate legal personality’ and at the same time acknowledging the need to punish the corporations which commit the offence.

Although the capacity of a corporation to perform any action cannot be questioned(by virtue of company law), the practicality for a company to commit a criminal offence is still a big issue to be discussed because technically as an artificial legal person, a corporation does not have the hand and mind to commit the killing.

1.2 Introduction of the ways to tackle the basic legal technical issue

Several principles and theories were being employed in common law to combat these conflicts issues. The development of common law in corporate manslaughter will be discussed and it would then be concluded that doctrines in common law were fail to tackle the offence of corporate manslaughter effectively. The Corporate Manslaughter and Corporate Homicide Act 2007 will then be introduced. The amendments made to common law will be analysed then its impact will be discussed. The new elements brought in by the 2007 Act will then be discussed as well. At the same time, the overall effectiveness of the Act will also be accessed and discussed.

2.0 The development of corporate manslaughter in Common Law

2.1 The principle of identification

Common Law attempted to overcome the issue by introducing the principle of identification. Viscount Haldane in Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [3] explained the theory of directing mind, ‘A corporation is an abstraction. It has no mind of its own anymore than it has a body of its own. Its active and directing will must consequently be sought in the person or somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the alter ego and centre of the personality of the corporation’.

In order to prove a the corporate is guilty of corporate manslaughter, it must be proved that a senior officer who satisfies the requirement of directing mind had committed the action (AR) which led to the death. On top of that, there was also a requirement under the identification principle that MR needed to be present in the mind of the same officer who has committed the AR.

It must also be emphasised that the principle of identification does not hold the company liable as to be accountable for the fault actions of its employees (as illustrated in vicarious liability). Rather it works by treating the actions and minds of the person are sufficient closely or senior enough to be classified as the actions and minds of the company. Thus only senior management officers can be ‘identified’ under the principle of identification.

One of the examples where the principle of identification is successfully applied for corporate manslaughter under common law is R v Kite [4] . In this case, OLL Ltd was found guilty as they were employing inexperienced and untrained workers which subsequently led to the death of the pupils who were in the canoe trip.

2.1.1 The inadequacy of identification principle

Challenges to the principle of identification came when the principle has to deal with cases involving large corporations. The smaller the company, the easier for us to identify the officer who committed the AR and MR. The weakness of the principle can be seen in P & O European Ferries (Dover) Ltd [5] where the court acknowledges the management from top to down was guilty of the fault but the company was not held guilty of corporate manslaughter as the court failed to find one single individual who satisfied the theory of identification as there were too many failures in each level of operation and management. It is submitted that such case is unjust as it illustrates that if more than one failure has occurred in the management or operation, the company could be escaped from corporate manslaughter as the court would fail to identify the directing mind or the AR. This is also an example of the inadequacy of the identification principle to operate effectively in cases where big corporation is prosecuted for corporate manslaughter.

The other problem in using ‘identification’ principle is that it is very hard to determine the formula of which personnel can be sufficiently classified under the principle of identification. Very senior officers such as the managing director and directors can most likely satisfy the test. At Tesco Supermarkets v Nattress [6] , it was decided that only those at top management of the corporation e.g. directors and managing director can be identified and it was also held that action and decision made by a branch manager will not hold the company liable under the identification principle. It was mentioned [7] that company would be able to escape from the criminal activities done by most of the employees as those who fall under the identification principle only represent a very small percentage of total labour in a company. In modern and practical company cultures, many of the daily operations would be delegated to managers or supervisors (middle rank officers). Following the guideline laid in Tesco Supermarkets v Nattress [8] , these middle rank officers’ actions or decisions would not lead to any criminal charges to the company. This also sends us a message which company can escape themselves from any criminal liability will delegating more tasks to their middle rank officers.

In the case of R v Kite [9] , it must be noted that the corporation involved (OLL Ltd) is a small company so the managing director (Peter Kite) was able to be identified easily. We have seen failure of the doctrine of identification to work in cases where big corporations were involved.

This inadequacy of Common Law in combating big companies for the offence of corporate manslaughter had lowered the conviction rates of corporate manslaughter. At the same time, the dissatisfaction of the public towards such scenario started to arise.

2.2 Aggregation principle as a solution in Common Law?

There were also discussions of bringing the aggregation principle into the corporate manslaughter cases. Aggregation principle works by combining the acts, omissions and states of mind from various people in that company in order to satisfy the AR and MR element. This was being employed in USA and the working of this principle is explained in USA v Bank of New England [10] , ‘ if employee A knows one facet of the currency reporting requirement, and B knows another facet of it, and C a third facet of it, the bank knows them all’. This can be seen as a method to enhance the usage of principle of identification as one of the major drawbacks of the identification principle is that the difficulty to find the same person who committed both AR and MR. Nevertheless the idea of employing this principle to the offence of corporate manslaughter in English jurisdiction was rejected. It was mentioned ‘you cannot add an innocent state of mind and get as a result of dishonest state of mind’ [11] . The idea of employing this principle was also rejected in R v HM Coroner for East Kent Ex p. Spooner [12] and AG’s Reference (No. 2 of 1999) [13] .

It will be submitted that even though the principle of aggregation was being applied in common law, the effective of common law in tackling corporate manslaughter will still not be there. By assuming of the principle of aggregation was introduced and the principle of identification was not overruled, the common law would had worked by identifying those senior officers who can be identified under identification principle and then apply the aggregation principle to help to establish the AR and MR. The difficulties to identify senior officers were discussed above. Hence, again the problem would not be solved.

3.0 The Birth of Corporate Manslaughter and Corporate Homicide Act 2007

3.1 Background to the legislation

The inability of common law to perform in many large scale disasters e.g. the Zeebrugge(P & O European Ferries (Dover) Ltd [14] ) had led to public concern to push over for a reform in this area of law. As a result the Corporate Manslaughter and Corporate Homicide Act 2007 was introduced. The Act received its royal assent on 26 July 2007. It was acknowledged by Home Office that there was a need to ‘restore public confidence that companies responsible for loss of life can properly be held accountable in law’ [15] . The 2007 Act clearly abolishes the common law offence of corporate manslaughter by virtue of Sec 20 of the Act.

3.1 The elements of the offence

Sec 1 of the Act has mentioned out the 5 essential ‘elements’ of the offence which must be established, i.e. (1) a qualifying organisation (2) which owed a relevant duty of care to the victim (3) caused the death of the victim (4) and that death was caused by a gross breach of a relevant duty and (5) the way in which its activities are managed or organised by its senior management is a substantial element in the breach.

It is submitted that those elements which need to be discussed are relevant duty of care, gross breach of duty and ‘senior management’.

3.2 Relevant duty of care

By virtue of Sec 2(1), relevant duty of care means any of the following duties owed by it under the law of negligence. It is stated that duty is owed to employees, occupiers, suppliers for goods and services and contractors are relevant.

3.2.1 Duty of care owed to detainee

Another highlight of the Corporate Manslaughter and Corporate Homicide Act 2007 is that the Act specifically mentions in Sec 2 that duty is extended to detainees under custody of police or immigration agency. The justification to extend such duty is well illustrated by Lord Hunt’s argument in House of Lords which stated ‘the power lawfully to deprive an individual of his or her liberty must be one of the most serious responsibilities there can be. The duty of care owed to an individual in detention, where he cannot act freely in his own interests, is onerous and profound, yet the way in which the Bill is currently ordered suggests that that responsibility is not so regarded by the Government’ [16] . This is also something welcomed as by doing so, civil liberty can be further ensured. But again, as the prison agency is considered as a public body the drawback this issue will be discussed on later part of this essay (4.2 &4.3).

3.2.2 Suggestion to demolish the requirement of relevant duty of care

Nevertheless, it is submitted that there should be no requirement of relevant duty of care as this concept from tort does not reconcile with criminal law. In the context of corporate manslaughter, the death of victim is involved. The loss of life should be sufficiently serious enough to impose an ‘automatic duty’ to the corporation. An expert review group was set up by the Justice Minister of Scotland and the expert group opposed to the requirement of duty of care [17] . Furthermore, in the homicide/manslaughter cases involving the natural persons as the accused, there is no such requirement of duty of care needed. Another possible drawback of imposing the relevant duty of care was it might prolong the duration of a trial and the author also suggested that the focus should be on other ‘more important’ elements such as gross breach [18] .

3.3 Gross breach of duty

By virtue of Sec 1(4), gross breach of duty occurs if the conduct alleged is amounted to a breach of that duty which falls far below what can reasonably be expected of the organisation in the circumstances. Sec 8(2) makes it a must for jury to consider the seriousness of the failure and the amount of risk of death that it posed. Besides that, attitudes, policies, systems or accepted practices within the organisation which would have encouraged the breach can also be brought into consideration by the jury [19] . James Gobert came out with three questions in regard to the element of gross breach of a relevant duty [20] . He asked (1) how to determine what is to be classified as reasonable to expect from the organisation under different circumstances? (2) How to classify ‘gross’? (3) What circumstances are relevant when considering liability? It is submitted that the guideline laid down in the Act is too vague and unspecific. The wording of gross has added confusion to the jury as there is no specific mention about its definition. Furthermore, it is not easy to set out a standard for gross breach as the circumstances are different from case to case. Attitudes, policies, systems or accepted practices of an organisation are not something which can be easily be found and observed. Furthermore, co-operation from the organisation itself is needed in order to find out those elements as such systems and policies are normally kept internal. Will an organisation actively assisting the process of finding its own weaknesses which can increase the probability of itself being convicted of corporate manslaughter? The answer is obviously no. It must also be noted that jury panel is formed by lay people, as such they might find it difficult to deal with such complex area without any clear guideline provided by the law.

3.4 Senior management test

As the commitment of corporate manslaughter requires the activities are managed or organised by its senior management is a substantial element in the breach, thus the determination of ‘senior management’ is very important here. Sec 1(4) did describe what is meant by senior management, i.e. persons who play significant roles in (1) the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or (2) the actual managing or organising of the whole or a substantial part of those activities.

3.4.1 Drawbacks of senior management test

There are comments where the problems faced in the principle of identification will still arise in the senior management test laid down in the 2007 Act. [21] Famous commentator Clarkson’s comment on the senior management test was ‘seems unduly restrictive and threatens to open the door for endless arguments in court as to whether certain persons do or do not constitute senior managers’ [22] . At this juncture, we can see that that are two elements in this 2007 Act which can be seen as the tools of the defendant counsels as to prolong the trial process i.e. the proof of relevant duty of care (3.2.2) and the senior management test. It is submitted that the offence of corporate manslaughter is so fundamental thus the requirement to have activities which managed or organised by its senior management to constitute substantial element in the breach should be eliminated. Bebb is the another commentator who agreed that the problems in senior management test are the same problems in principle of identification [23] .

3.4.2 Suggestion of using management failure test

Bebb proposed that a ‘management failure’ test is a more suitable test compared to senior management test. This test was once appeared in the Law Commission’s 1996 Report [24] but the senior management test was chosen by the government at the end of the day. It is submitted that this is a more suitable test as the seniority of the management should not be the fundamental question in deciding whether or not the company is guilty of corporate manslaughter. Moreover, it is hard in practical to determine the seniority of a management officer in a big corporation (old problem in principle of identification). It is submitted that as long as it can be proved that the fault is from the activities managed or organised by the management, this should be sufficient enough to hold the company guilty of corporate manslaughter.

3.5 Individual liability

One of the significant elements of the Corporate Manslaughter and Corporate Homicide Act 2007 is that it clearly stated that there is no individual liability incurred to the officers for the offence of corporate manslaughter. Sec 18 makes it clear that an individual cannot be guilty of aiding, abetting, counselling or procuring in the offence of corporate manslaughter. In other word, the elements of Accessories and Abettor Act 1861 are not applicable in the offence of corporate manslaughter. It was mentioned that the ratio behind this decision was the government’s aim to focus the liability on the corporation itself [25] . This sounded unconvincing for Gobert and he also referred to Sec 37 of the Health and Safety Act 1974 where the provision extended the liability to the officer. [26] It was also debated in the House of Lords by Lord Wedderburn that the exclusion that it is not proper to not include the personal liability for corporate manslaughter [27] . At this juncture, we can see that the non-imposition of personal liability did bring up some voices thus a further discussion on this area is needed. Also, the Corporate Manslaughter and Corporate Homicide Act 2007 requires the need to show activities are managed or organised by its senior management is a substantial element in the breach. This means that the Parliament did recognise the role of the individual officer in the commitment of the offence. Thus it seems confusing that individual officers are freed from liability by the same Act.

3.5.1 The need to impose individual liability

The decisions made by the officers in the daily operations of a corporation are no doubt crucial. Policies are fully defined and decided by them. It must be noted that the decisions made might be influenced by some personal benefits. For instance, a director might choose to neglect the safety requirements in order to increase the profitability of the corporation which will at the same time enhancing his chances for further career promotion. From the said director’s point of view, this is a ‘win-win’ situation for himself, the shareholders and the corporation as all of them will benefit from such a decision. But such phenomena will create unhealthy cultures within all industries and this will subsequently further expose the workers to the risks of death or injury. It is submitted that by imposing personal liability on the officers, it will motivate them to put more emphasis on the health and safety issues. As a result, the number of incidents of corporate manslaughter can be reduced. This approach of imposing individual liability has been used in the United States as the legislator in the jurisdiction believes that this will provide a more efficient management in handling safety issues. Two rules of imposing individual liability on indirect actor (management officer) were laid down in United States v Park [28] . Firstly, the said officer must hold a position of ‘responsibilities and authority’ in the activity which caused the criminal crime. Secondly, it must be shown that he had the ability to prevent the incident by exercising “highest standard of foresight and vigilance.” [29] The second principle created a defence to prevent an officer to be convicted if the incident was unpreventable even after he took extraordinary care [30] . This is deemed fair, just and reasonable as liability will not be imposed as long as they act their best in ensuring the safety level.

It is submitted the approach stated in United States v Park [31] is worthwhile for us to refer as it encourages the management to act up to their best level in ensuring the level of safety in the corporation’s operation at the same time did not overload them by holding them liability for all incidents that occur.

It was mentioned that the Law Commission and the Home Office in fact took the view to impose individual liability on the officer [32] . Gower suspected that the withdrawal of imposing individual liability at final stage was due to the ‘lobbying efforts’ by the business community as the business community were scared of the potential damages to their personal reputation [33] . It is also the Centre for Corporate Accountability’s view that a duty should be imposed on individual officers to take reasonable steps in ensuring safety [34] .

3.5.2 Corporate liability + individual liability = most effective solution

It is submitted that the best approach to tackle corporate manslaughter is by not rigidly being restricted by the choice of imposing either one of corporate liability or individual liability. The best and most effective way is to impose both. Thus I fully agree with the following statement: ‘we have a legal system which is incapable of dealing with institutional violence because it is limited to holding individuals responsible for individual crime; and to a much lesser extent, to holding collectivities responsible for collective crime. What we need is a legal system which places more emphasis on the latter, but which, in addition, holds individuals responsible crime. We need a legal order based less on neatly defined categories of guilt, and more on the dialectics of group and individual responsibility’ [35] . In the context of corporate manslaughter, both the corporation and the officer did contribute to the offence, it is just a matter whether which party’s fault is more substantial, hence both parties should not be escaped from the liability.

3.6 DPP’s consent

Another element introduced in the Corporate Manslaughter and Corporate Homicide Act 2007 is the requirement of Director of Public Prosecutions’ (DPP) consent to commence the all proceedings for the offence of corporate manslaughter. This provision is clearly laid down in Sec 17. It must be noted that the requirement does not only apply to private prosecutions while it applies to public prosecutions as well. Gobert noticed the conflict of this with the Sec 1(7) of the Prosecution of Offences Act 1985 which allows the Crown prosecutor to give DPP’s consent [36] . Does this impliedly mean that the DPP’s consent is not needed for corporate manslaughter’s proceedings brought up by the public prosecutor? Having considered the fact that the Law Commission and Home Office had proposed that DPP’s consent should not be required even for private prosecution for corporate manslaughter [37] , the drafter of the Bill acted more precisely. Yet, the Act is drafted in such a way. Thus it is concluded that the Parliament’s intention to extend the requirement of DPP’s consent to both public and private prosecutions is clear.

3.6.1 Possible drawbacks of the requirement of DPP’s consent

Such requirement might opens up the possibilities of bringing in political influence in the decision of whether or not to commence a prosecution for corporate manslaughter. This is due to the scenario where one of the DPP’s jobs is ‘reporting to the Attorney General, the Government Minister who answers for the CPS in Parliament’ [38] . This has shown us the close tie between the political agencies and the DPP office. Gobert also pin pointed out the possibilities where DPP is being influenced by MPs who were lobbied by the corporate lobbyists [39] .

3.6.2 Grounds to support the demolishment of this requirement

It is submitted that DPP’s consent should not be required for private prosecution as the society should have given the right to bring in legal action against the company in the occasions where they find that the company should be accountable for the tragedies. It is further submitted that if DPP has refused to give consent for public prosecution for a particular case, the chances of not consenting to private prosecution in the same case are likely to be there.

In a democratic society, the citizens should be given the chance