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Corporate Clips

The law on Corporate killing - dying for change?

February 2005

A series of unsuccessful prosecutions over the last 25 years for corporate manslaughter by gross negligence (the sinking of the Herald of Free Enterprise (P & O), the Southall Disaster (Great Western Trains), the Marchioness Disaster) and recently the charges against Balfour Beatty in relation to the Hatfield Disaster, have led to a number of vociferous calls on the Government to change the law in this area. In response to these, the Labour Government has made a series of commitments to introduce a new offence of corporate killing[i]. However, with an election looming and disagreement as to how the law should be framed, it is unlikely that time will be found until the next session of Parliament (and only then if the Labour Party is elected for a fourth term). This Short Lines looks at the background to the proposed offence and how it is likely to be framed.

Current Law

The current law on corporate manslaughter by gross negligence has its roots in a series of cases in 1944, in which the principle was established that those who control or manage the affairs of a company are regarded as the company itself. Based on this principle, a corporation can be convicted of corporate manslaughter if: (i) an individual – such as a director - can be identified as the “controlling mind” of the corporation; and (ii) that individual is first found guilty of manslaughter. (For an individual to be found guilty of manslaughter it must be shown that he failed to discharge a duty of care to the deceased person and was grossly negligent in doing so.)

These strict criteria impose a heavy burden on the prosecution and have meant that, to date, there have only been seven convictions. Each conviction involved a small company where it was possible to identify the controlling mind. Identifying a controlling mind in a large corporation is often impossible; it has therefore been possible for a corporation to escape prosecution, even where it has failed to set up and monitor adequate systems of operation resulting in death and serious injury, by devolving health and safety responsibility to lower management who do not represent the controlling mind.

This deficiency in the law has led to two Government-mandated Law Commission Reports[ii] proposing the introduction of a new offence of corporate killing. This offence will target corporations and not increase or decrease individual liability of directors or employees for manslaughter.

New Law – Corporate Killing

Following the two Law Commission Reports, the Government issued a Consultation Paper in May 2000[iii] setting out its proposals for legislation on corporate killing. The Consultation Paper proposes that an “undertaking” (which includes a range of enterprises including partnerships and trusts as well as corporations but not, at present, a Government entity) will be guilty of corporate killing if:

a management failure causes a person’s death; and
that failure constitutes conduct falling far below what can reasonably be expected of it in the circumstances.

Accordingly, the central tenet of the offence will be how activities are managed and organised – for example, systems, practices and procedures – at board level so as to ensure the health and safety of affected individuals, rather than failings of any particular individual or any employee of the corporation. Indeed, it will be open to prosecute a corporation for death even though the immediate cause is the action of an individual employee (or even that of a contractor) if management failings can be demonstrated. However, how legislation will frame what constitutes a management failure and the standards against which this will be judged remain to be seen, although health and safety legislative compliance is a readily available benchmark. On conviction, a corporation could be exposed to an unlimited fine as well as an order for remedial action to be taken.

The Consultation proposes that the offence can be committed by group companies, if it can be shown that their own management failures were a cause of the death concerned. Without this further restriction it would be possible for companies to evade possible liability on a charge of corporate killing through the establishment of subsidiary companies carrying on riskier business activities which could most readily give rise to charges of corporate killing.

Directors’ Liability

The Consultation Paper proposes that where a corporation is found liable for the offence of corporate killing, the directors and managers of that company would be subject to disqualification proceedings if they contributed to the management failure which resulted in death. The Consultation Paper also proposed the creation of a new offence alongside the main offence of corporate killing that would allow directors who contributed or significantly contributed to corporate killing to be prosecuted. Current indications are that the Government will not pursue this proposal; their stated intention is to target corporations and not impose individual liability for the new offence in a direct or contributory way.

Conclusion : What the future holds

Given the serious concerns due to the lack of corporate accountability for death caused by serious failures in implementing adequate safety systems, the introduction of specific legislation to deal with this issue is now long overdue. In particular, it is anticipated that the new legislation will create more rigorous procedures: compliance with health and safety regulations, time spent on risk assessment and positions within companies to oversee compliance. It is hoped that the implementation of the new legislation will reduce the 300+ work related deaths occurring every year. However, care needs to be taken to ensure that the legislation is not drafted in such a way that it exposes directors to punitive sanctions or disqualifications in circumstances where they are not personally culpable. It is also to be hoped that the standards against which actions of corporations are to be judged are reasonable and do not impose unnecessary compliance obligations.

Nadia Christodoulou

Useful URLs

http://www.lawcom.gov.uk/files/lc237.pdf
The 1996 Law Commission’s Report on involuntary manslaughter
www.homeoffice.gov.uk/docs/invmans.html
Government's proposals on reforming the law on corporate manslaughter

[1] Most recently in the Queen’s speech on 23 November 2004.

[2] In 1996 the Law Commission published their Report No. 237 on involuntary manslaughter: www.lawcom.gov.uk/files/lc237.pdf and this followed from their previous report, No 135 in 1994.

[3] Government’s proposals on reforming law on corporate manslaughter: www.homeoffice.gov.uk/docs/invmans.html