Weaknesses in Current Corporate Manslaughter Regime

The Corporate Manslaughter and Corporate Homicide Act 2007

In brief, an organisation will commit corporate manslaughter if the way in which its activities are managed or organised, including a substantial contribution by its “senior management”, causes a death, and amounts to a gross breach of a relevant duty of care owed by the organisation to the victim.

Cynical commentators might regard the Act as succeeding primarily in making a symbolic statement about corporate responsibility, which it will struggle to fulfil in practice. Although the Act appears to create a broad reaching offence in terms of bodies to which it will apply and the duties of care which will trigger liability, these are severely curtailed by the technical qualifications integral to the all important duty question and by the numerous and far reaching exclusions designed to protect public bodies. The layers of technicality serve to restrict the scope of liability far more than would at first appear, and may well lead to significant difficulties in practice.

Public disquiet with the lack of a specific offence for corporate killing increased with each successive failure to secure convictions for gross negligence manslaughter in any of the large scale disasters such as the Southall, Paddington, Hatfield and Potter’s Bar rail crashes, the Zeebrugge (Herald of Free Enterprise) and Marchioness shipping disasters and the Piper Alpha and King’s Cross fires.

recommending the creation of a new offence of “corporate killing”.5 A corporation would commit this offence if its “management failure” were a cause of a person’s death, and that failure fell far below what could reasonably be expected of the corporation in the circumstances. That proposal was, as Celia Wells noted, the start of the fundamental change in the United Kingdom to move the corporate manslaughter offence away from individual liability, bedevilled as it was by the identification doctrine, towards liability based on “management failure”

[T]o restore public confidence that companies responsible for loss of life can properly be held accountable in law. The government believes the creation of a new offence of corporate killing would give useful emphasis to *Crim. L.R. 591  the seriousness of health and safety offences (even though the new offence is not based on health and safety failings) and would give force to the need to consider health and safety as a management issue. Reforming the Law on Involuntary Manslaughter (2000), para.3.1.9

Rather the existing offence of manslaughter by gross negligence as it applies to companies and other organisations caught by the Act is abolished.

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A fundamental point that is easy to lose sight of is that the Act creates a completely new homicide offence which can be committed only by organisations and not by individuals

Organisations may now be liable for unlawful homicide where previously there was no unlawful homicide and no homicide offence committed by anyone. This is of course the whole point. The Act aims to deal, in particular, with those notorious major disasters where it has proved impossible to secure a conviction of anyone for homicide, but it should not be assumed that these high profile cases will be the only ones covered. Organisational failure which results in death and which satisfies the criteria of the Act will now amount to the new criminal offence in situations where common law manslaughter, whether for the organisation or an individual, may have previously proved difficult in practice.

The mechanism by which this new liability is achieved is through the abandonment of the identification doctrine as a method of attribution of responsibility to companies and organisations. This is replaced with what might be *Crim. L.R. 592  described as a qualified aggregation principle which primarily bases responsibility on the activity of the company as an aggregate or composite entity rather than on the separate activities of the senior individuals who can be artificially identified with it.

The identification principle had become the major obstacle to securing a conviction under the common law offence of gross negligencemanslaughter, particularly with a company of any size or with any complexity in its management structure.

The result was that the only successful prosecutions against corporate entities for gross negligence manslaughter were in relation to small companies,14 where there was more likely to be a single person directly and immediately responsible for the death and who was senior enough to be regarded as the “directing mind and will” of the company

The approach now adopted in the Act was initially conceived by the Law Commission as being distinct from an aggregation approach and was welcomed19 as at least a move in the direction of a more holistic approach recognising the responsibility of the company itself for the way it operates, for its organisational failure, rather than for the acts or failings of the individuals comprising it.

The Act abolishes22 gross negligence manslaughter as far as it applies to corporations and other bodies to which the 2007 Act applies (s.20). By s.27(4) the abolition of liability for gross negligence manslaughter does not affect:

“? [A]ny liability, investigation, legal proceeding or penalty for or in respect of an offence committed wholly or partly before the commencement of that section.”

d by s.27(5) an offence is committed wholly or partly before the commencement if “any of the conduct or events alleged to constitute the offence occurred before that commencement”. It is clear that the Government has learned its lesson from failures to ensure transitional continuity23 and there is no gap left in the law: gross negligence manslaughter remains available in all those circumstances.

The Act’s attempt at a strict division between organisational and individual fault may pose problems. Celia Wells, in reviewing the early Law Commission proposals on the offence, commented that such a model ignores the vagaries of prosecution policy.27 First, the likelihood of any prosecution of an individual is remote for the reasons noted above. Secondly, in the unlikely event that an individual defendant is charged alongside a company in the same proceedings, the jury will be faced with two different tests of manslaughter liability. Wells was equally critical of the Bill for failing to provide for individual liability *Crim. L.R. 595  while focusing on senior managers.28 In practical terms, the Act may lead to a focus on organisational failures while allowing individuals to escape censure.

In terms of Health and Safety Act offences,31 there is no difficulty in an offending organisation being found liable under the 2007 Act and under the relevant health and safety legislation (s.19(1)). Additionally, nothing in the 2007 Act precludes liability for a health and safety offence against an organisation which has already been convicted of corporate manslaughter (s.19(2)). The intention seems to be to ensure that although an individual cannot be liable as a secondary party to the corporate manslaughter, he can instead be guilty of a health and safety offence as a secondary party to the organisation’s conduct. To achieve this, s.19(2) seems to allow for a second prosecution of the organisation despite it having already been convicted of manslaughter on the same facts.32 The relationship between the Health and Safety legislation and the new offence is an interesting or some might say incoherent one.33 The Government eschewed a model of constructive manslaughter where a breach of health and safety legislation which led to death could found a corporatemanslaughter. Liability under the Act is, instead, based on duties founded in the civil law of negligence. However, the breaches of health and safety legislation will not be irrelevant since the jury are directed that they must have regard to such breaches in establishing whether the organisation has been grossly at fault (s.8).

The size of a company will diminish the doctrine of identification, for the larger the company, and the more complex its structure, the more difficult it is to identify whose mind within the company can be attributed to the company. In R. v P & O European Ferries (Dover) Ltd, 12there was insufficient evidence to identify the culpable individual whose acts would be considered those of the company. This is in contrast to R v Kite 13 where the director and company were convicted of manslaughter, for it was a one-man company and its managing director was obviously the directing mind and will. The Law Commission stated that it was unfair that a small company could be found guilty ofmanslaughter but not a large company. The subsequent proposal to confer liability based on management failure, but not involving identification, was because the public interest required the denunciation of a company inherent in a conviction of manslaughter. The majority of public disasters are caused by the failure of the systems controlling the risk, with the carelessness of individuals being a contributing factor. A company will be guilty of manslaughter if it is management failure that subsequently is the cause or one of the causes of a person’s death and if the standards of safety fall below what can reasonably be expected of a company under such circumstances. Besides, the health and safety of employees or those affected gives rise to management issues, too. Such failure is a cause of death notwithstanding that it has been immediately caused by an individual. However, nothing has yet been done regarding fines.

After the Southall disaster of 1997, Rose L.J. in Re Att Gen’s Reference (No.2 of 1999) 14 emphasised that large companies should be as susceptible to prosecution for manslaughter as one-man companies and there could be no justification for drawing a distinction as to liability between the two. He reaffirmed the existence of the identification theory of Lord Hoffmann, rather than departing from it, and stated that it is the present law. His Lordship stated that it is up to Parliament to change the law.

Owing to public pressure and recent disasters, the then Home Secretary, Jack Straw, proposed a consultation paper in March 2000 regarding a similar test, but went further to include undertakings. This broadened the scope of the offence to include partnerships, schools, hospital trusts, charities and so on. In addition, any person responsible for the circumstances in which a management failure occurred would be disqualified from acting in a management role in any undertaking, or of carrying on a business or activity in the United Kingdom. The unsatisfactory result of convicting a company for involuntary manslaughter prompted the debate and led to the subsequent enactment of the Corporate Manslaughter and Corporate Homicide Act 2007.

Corporate Manslaughter and Corporate Homicide Act 2007

The evolution of corporate culpable liability has been piecemeal. It has taken more than a decade for the relevant Act15 to be passed, which deals with the difficulty of fixing a corporate manslaughter or, in Scotland, a corporate homicide. The Act creates an offence by which, should the activities of the organisation cause a person’s death, it is considered a gross breach of the relevant duty of care owed to the deceased by the organisation.16 The term “organisation” covers a wide range of institutions and previous reports to include partnerships, trade unions and associations.17 The Act directly points to the senior management or the management of the activities as the body to be liable should its managed activities cause the death of a person in a way that constitutes a gross breach of duty of care.18

Abolition of corporate manslaughter at common law

The common law rules on the corporate manslaughter by gross negligence have been abolished explicitly by the Act.19 However, the Actreserves the charge arising out of health and safety legislation as a particular circumstance.20 This is in keeping with Lord Hoffmann’s perception of the specific rule of doctrine of attribution. A company could be charged under the new Act and under health and safety legislation. Furthermore, no individual could be found guilty of aiding, abetting, counselling or procuring the offence or being part thereof.21

English law has yet to come to terms with the conceptually difficult task of attributing liability for manslaughter to a corporate entity. The essential problem is that a corporation is granted an independent status by a pragmatic legal fiction which affords an identity to entity which has no physical existence. Salomon v. Salomon & Co. [1897] is authority on this point. This is done in order to allow the corporation to assume responsibility and rights in its economic activities and this device has proved extremely useful in encouraging commercial risk taking and entrepreneurial activity.

However, problems arise when it is necessary to consider the question of the criminal liability of the corporation, because one of the fundamental precepts of criminal law is that of personal criminal responsibility. The way in which criminal law attributes liability is by ascertaining a mens rea (a guilty mind) and an actus reus (a guilty act) on the part of the accused. It is difficult to accuse a company of possessing a guilty mind, because it has no personal mind or conscience, and it is guilty of accusing a company of a guilty act, because it is a legal construct without any means of acting on its own behalf. Companies can only act vicariously through the actions of their human employees and representatives, and such individuals possess their own personal criminal responsibility which can be dealt with by the ordinary application of criminal law.

The issue was brought dramatically to the fore in March 1987 when the Herald of Free Enterprise ferry capsized off Zeebrugge with the loss of 188 lives. Amid a public outcry and intense media pressure for effective sanctions P&O was accused of gross negligence and prosecuted for manslaughter over the incident but the case subsequently collapsed. Momentum gathered behind the cause for reform as the same fate befell attempts to sustain corporate prosecutions in the aftermath of the King’s Cross fire (1987) , the Piper Alpha oil rig disaster in Scotland (where the equivalent offence is culpable homicide) (1988), the Clapham Rail crash (1988) and the Marchioness pleasure boat tragedy (1989). Over the years since 1989 there have been other tragedies too numerous to mention, but in not a single case was a large company successfully prosecuted for manslaughter.

Directing Mind Theory

Given that the company has no conscience or mind of its own, it has been suggested that the law should look to a senior representative of the company and attribute his or her state of mind to the company itself. This is a tenuous approach, because it undermines the fundamental rule of personal criminal responsibility, but it has received considerable academic support and comment. The traditional starting point in an analysis of the evolution of directing mind theory is the dictum of Viscount Haldane in the civil case, Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915]. He stated:

“A corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.”

As stated, many commentators have championed the view that the directing mind concept provides a more coherent and just basis for corporate liability than agency or vicarious liability mechanisms.

The theory was applied in a civil context in Rudd v Elder Dempster & Co Ltd [1933] and Wheeler v New Merton Board Mills Ltd [1933] which dealt with the liability of companies for negligence in factory operations which resulted in injury to employees. These cases concerned the question as to whether personal knowledge or wilful actions could be imputed to a corporation under the terms of the Workmen’s Compensation Act 1923. Following Lennard’s Carrying Co it was held that a company could only be deemed liable to its workmen for the negligence of its governing nucleus – namely its directors, managing director, general manager or other persons having authority from the board to carry out company actions. That said, it should be noted that in the later case of Wilsons & Clyde Coal v English [1937] , the House of Lords omitted to apply or even consider the directing mind theory when deciding on corporate liability for an unsafe system of work in a mine under common law and relevant legislation. In this case liability was imposed purely on principles of vicarious liability, even though the duty imposed on the corporate mine owner was found to be personal and non-delegable.

In the case of H.L. Bolton (Engineering) Co Ltd v T.J.Graham & Sons Ltd, Lord Denning attempted to entrench directing mind theory at the heart of the law for the imposition of civil or criminal liability on companies. Lord Denning stated that companies:

“‘may in many ways be likened to a human body. They have a brain and a nerve centre which controls what they do. They also have hands which hold the tools and act in accordance with directions from the centre.’

Therefore Lord Denning advocated that the means of determining the mind of the company was to identify its actual human controllers. He argued that a company’s directors and managers represent the directing mind and will of the company, and that they control what the company does. He concluded that the state of mind of senior corporate officers is the state of mind of the company and that it should be treated by the law as such. Unfortunately, Denning’s policy rendered it virtually impossible for corporations of anything other than a very small size to be successfully prosecuted because in most corporations of a significant size the personal responsibility for corporate affairs is divided between a number of directors and senior managers and as a consequence, no single human component of the company is responsible for sufficient of the mens rea and actus reus in order to found a criminal prosecution.

In R v P&O European Ferries [1991] , the case concerning the discussed sinking of the Herald of Free Enterprise ferry off Zeebrugge in 1987, Turner J ruled at 83:

“Where a corporation through the controlling mind of one of its agents, does an act which fulfils the prerequisites of the crime of manslaughter, it is properly indictable for the crime of manslaughter.”

This was a groundbreaking ruling in the specific context of corporate liability for manslaughter and it was elaborated on by Bingham LJ in R v HM Coroner ex parte Spooner , in proceedings also relating to the Zeebrugge accident. Lord Bingham stated:

“For a company to be criminally liable for manslaughterâ€? it is required that the mens rea and the actus reus of manslaughter should be establishedâ€? against those who were to be identified as the embodiment of the company itself.”

As stated, the prosecution of P&O failed notwithstanding these statements of principle by the courts. The main reasons why the case was unsuccessful were that the negligence within the company which resulted in a situation in which the ferry set sail from Zeebrugge leaving its bow doors open was shared among many individual employees of the company. Negligence was identified at all levels from the deck to the boardroom, but not in sufficient quantity in any one senior officer of the company to sustain a finding of criminal liability which could thereafter be imputed to the company itself. The combined factors of alienation and dilution have been blamed for this consequence. Alienation relates to the reality that senior officers of the company were distant both literally and in terms of responsibility from the action on the ferry that resulted in the ship setting sail in a dangerous condition. Dilution relates to the fact that because so many different human agents were involved in running the company, the individual responsibility and fault of any one person was diluted to a level below criminal liability because it was being shared between numerous other parties.

An argument based on aggregation was proposed to circumnavigate these problems. This policy would permit a company to be found guilty of manslaughter due to the collective fault or blame of all the senior individuals who could be identified with the company. Therefore this prosecution argument suggested that different pieces of the corporate manslaughter jigsaw puzzle could be gathered together from different senior parties within the corporation so as eventually to form a complete picture of corporate guilt.

However, Turner J in R v P&O European Ferries ruled that the company could be guilty only if one individual who could be identified with the company was himself personally guilty of the crime (with the requisite mens rea and actus reus). Bingham supported this line in the Spooner case. It could therefore be argued that the courts rejection of aggregation makes it plain that the organic identification doctrine articulated in Lennards Carrying and developed by Denning in H.L. Bolton (Engineering) Co Ltd is in fact no more than a form of vicarious liability. This conclusion would be in conflict with those of eminent commentators such as Wells and Gower , who describe directing mind theory as one that involves direct and not vicarious corporate liability. However, if it necessary to identify perfect guilt in one senior individual and then transpose the guilt onto the corporation itself it is submitted that this no more than a process of indirect vicarious liability – perhaps executive vicarious liability would be a good way to describe it.

The first successful prosecution for corporate manslaughter came about in the case of R v Kite and OLL Ltd, . This case betrayed a shocking level of negligence and recklessness. The company in question operated an activity centre at Lyme Bay on the south coast of England. The prosecution arose from an incident in which four teenagers drowned on a canoeing trip.

An investigation of the trip revealed an almost total lack of regard for safety by the company and hopelessly inadequate planning, preparation and supervision. The instructors were mostly unqualified and barely competent canoeists themselves. Some instructors could not even swim. The trip in question was a lengthy trip in the English Channel. The weather forecast was not checked, no distress flares no first aid kit and no spray decks were taken. No waterproofs and no tow ropes were taken. When the party failed to arrive at its destination on time, the alarm was not raised for several hours and when it was inaccurate information was given to the Coastguard. Moreover, the company had received letters from former employees criticising its safety standards and predicting a fatal accident.

On the facts both the company and its managing director were found to be guilty of manslaughter by gross negligence. The company was a very small undertaking and its MD Peter Kite was therefore deemed directly implicated in the stated failings. This made it easier for the court to attribute liability to the company itself under the directing mind doctrine.

This case emphasised the fact that the directing mind doctrine essentially establishes a system in which it is far easier to prosecute small companies than large companies for manslaughter, even where the levels of negligence and recklessness are equivalent. Notwithstanding the fact that large companies will typically have the capacity to kill many more people than small ones, they are likely to escape prosecution because criminal responsibility will be shared between many officers rather than being focused on one or two culpable parties. Peter Kite had a high degree of personal knowledge of the inadequacies of the safety systems and the consequent risks, therefore it was easier to prove that he was reckless and grossly negligent in such a way that the company could also be made liable because he could be deemed its corporate alter ego. As Andrew Dismore MP was driven to comment in the House of Commons:

“the bigger the company, the less chance of a successful prosecutionâ€?Safety awareness, and the great responsibility that it entails, should lie with those at the top – the chairman and the managing director – and not with the employees, such as train drivers or ship’s crews, who are always put up as the fall guys.”

Since R v Kite and OLL Ltd there have been a handful of other prosecutions, but only some of those involving very small companies have proved successful. One such example is R v Jackson Transport (Ossett) [1996] where a director was jailed after the death of a 21-year-old employee who died after being sprayed in the face with a highly toxic chemical without the proper safety protection or training. However, whenever prosecution has been attempted on a grander scale, for example after the regular fatal train crashes the occur, such efforts have always resulted in failure.

Proposals for Reform

With public and media pressure mounting, in 1994 the Law Commission issued a consultation paper proposing the establishment of a regime dedicated to the attribution of corporate liability for manslaughter. Following extensive consultation, in 1996 the Law Commission published a report calling for the adoption of a new legal framework designed to impose liability more effectively on companies in circumstances where management failure could be identified as a cause of death. The report advocated the establishment of a new offence of corporate killing backed by unlimited fines. Specifically the Law Commission recommended:

(1) the creation of a new offence of killing by gross recklessness;

(2) there should be a separate offence of corporate killing, broadly corresponding to the individual offence of killing by gross recklessness;

(3) that both offences should be constituted only where the defendants conduct in causing death falls far below what could reasonably be expected;

(4) that in contrast to the individual offence, the corporate offence should not require that the risk be obvious, or that the defendant be capable of appreciating the risk; and

(5) that for the purposes of the corporate offence, a death should be regarded as having been caused by the conduct of a corporation if it is caused by a failure, in the way in which the corporation’s activities are managed or organised, to ensure the health and safety of persons employed in or affected by those activities.

In its 1997 manifesto the Labour Party made a commitment to introduce legislation on the issue and soon after election victory Labour’s new Home Secretary Jack Straw announced that the Government would, in substance, enact the Law Society recommendations. An interdepartmental working group was constituted to examine the practical impact of the proposed regime and this resulted in the publication of a Home Office consultation paper in 2004.

The Law Commission found that it should not be possible for individuals to get caught in the crosshairs of the new offence, but the Government had no such reservations. The Law Commission argued that no individual should be liable to prosecution for the offence, even as a secondary party. Their stated aim was, first, that the new offences of reckless killing and killing by gross recklessness should replace the law of involuntary manslaughter for individuals; and second, that the offence of killing by gross carelessness should be adopted so as to fit the special case of a corporation whose management is one of the causes of a death. It was submitted that the indirect extension of an individual’s liability, by means of the new corporate offence, would be entirely contrary to that purpose.

Concluding Comments

It has now become a regular mantra of the Home Secretary and Transport Minister, in the aftermath of any high profile fatal accident, to declare that the Government is pushing urgently ahead with proposals to implement a new law on corporate killing to address the weaknesses in the current common law corporate manslaughter regime. After every train crash, the headlines in the newspapers declare moves to bring in draconian new laws, but this has now been the case for almost two decades through both Labour and Conservative administrations. Clearly there are conceptual, philosophical and jurisprudential difficulties entailed in attributing what is in part moral liability to an artificial, unthinking entity, and fundamental principles of law would need adjustment to fit any new law into the traditional regime of criminal law. However there are well organised pressure groups, whose ranks are added to by every new disaster, calling vociferously for reform of the law and the media delights in championing their cause with a concerned public.

It is pertinent to restate the quote incorporated in the title to this paper in closing:

“Criminal liability and the justifications for, and objectives of, punishment are based on the notion of individual blameworthiness.”

This is undeniably true, because criminal liability has traditionally been predicated on the culpable behaviour of human beings. Inevitably there will be difficulties transposing this regime into a system capable of regulating the activities of corporations because they lack the physical and mental attributes of human beings, but it is submitted that it is not impossible to conceive of a new system which is sympathetic to the nature of the corporation while at the same time holding it properly and effectively to account for its actions. In the final analysis the ability to hold large corporations liable for deaths caused by gross negligence and recklessness can only serve to foster a keener corporate health and safety culture and that would seem to be justification enough for a sharpening of the law.