Considering it took ten years for the Corporate Homicide and Corporate Manslaughter Act (CMA) 2007 to arrive on the statute books it is not unreasonable to expect that the Government would have provided a worthy and commensurate law. They did no such thing, says Ray Rapp, who provides a reminder of some of the many concerns about the Act, which has now been in force for a year.
For the Corporate Homicide and Corporate Manslaughter Act (CMA) to be invoked in the first instance, a death must occur. Given that minor incidents can have catastrophic consequences, and catastrophic incidents can have minor consequences, some have likened this aspect of the Act to a chance occurrence.
Moreover, the likelihood of someone dying from an incident is partly dependent on the vulnerability of the victim, or the remoteness of the location (difficulty in emergency services gaining access or transporting people to hospital, for example). It follows that a law should not be bound by issues of luck, good or bad. Nevertheless, in most circumstances for a fatality to occur there must have been an exposure to a serious level of risk; the actual outcome may be uncertain, but the risk is still apparent.
The CMA only applies to an organisation and not to any specific individuals employed by that organisation. Notwithstanding this, individuals could still be prosecuted for offences under HSWA 1974 or common law gross negligence manslaughter in a separate trial, albeit the latter is unlikely for a number of different reasons. The Act applies to companies incorporated under companies’ legislation, public bodies incorporated by statute, organisations incorporated by Royal Charter, limited liability partnerships and most Crown bodies. In effect, all organisations that act as an employer are covered within the ambit of the Act, with a few exceptions and limitations pursuant to sections 3-7 and a special dispensation until 2011 for deaths in custody.
In the case of a parent company with a number of subsidiaries, it is most probable that any failure of a subsidiary will result in the subsidiary being prosecuted rather than the parent company. The reason for this is twofold: first the subsidiary is a separate legal entity and therefore legally accountable for its actions; and second, the relevant duty of care that underpins the offence is more likely to be owed by the subsidiary.1 However, the parent company has overall control of the subsidiary, as it receives the profits and may also bear any losses. There is, therefore, an opportunity for an unscrupulous parent company to create a subsidiary in order to ‘export’ its more risky operations to avoid liability, while at the same time starving the subsidiary of cash in case it should be prosecuted.2
The offence
Under section 1 of the Act an organisation is guilty of an offence if the way in which its activities are managed or organised causes a death and amounts to a gross breach of a relevant duty of care to the deceased. In other words, the offence provides a means by which an organisation’s culpability can be assessed by taking a wide view of its activities in the form of its structure, policies and practices. The offence does not introduce any new statutory duties and, in principle, compliance with current health and safety legislation will insulate organisations from any subsequent prosecution. Notwithstanding that, full compliance with the law is problematic and unlikely to have been achieved in cases where a serious incident has occurred.
The term gross breach is simply described in the Act as a ‘duty which falls far below what can be reasonably expected of the organisation in the circumstances’ and no doubt lawyers will prevaricate over the semantics. The ‘duty of care’ principle has been adopted from common law and is normally associated with the civil law tort of negligence. The CMA is structured on gross negligence manslaughter and the test of gross negligence was set out in the case of R v Adomako3 as follows:
1. The defendant owed a duty of care to the deceased; and
2. He/she was in breach of that duty; and
3. The breach was a substantial cause of the death (i.e. something more than trivial); and
4. The breach was so grossly negligent that the defendant can be deemed to have had such disregard for life of the deceased that it should be seen as criminal and deserving of punishment by the state.
The rationale for the inclusion of a duty of care in the Act is both spurious and complex, based on the fact that a defendant can be found guilty for gross-negligence manslaughter by either an ‘act’ or ‘omission’ — unlike unlawful-act manslaughter, which requires that a conviction can only ensue from an ‘act’, as is the case with all other forms of manslaughter and murder. Furthermore, a defendant can be found guilty of gross-negligence manslaughter without having to prove a ‘guilty mind’, whereas most other serious criminal offences require evidence of the both the act (actus reus) and the defendant’s state of mind (mens rea).
The Adamako precedent is based on the fact that everyone owes a duty to people not to kill them and therefore the duty-of-care requirement is only meaningful in cases of omission, where there will be liability only if a duty of care under criminal-law principles can be established.4 In short, where death is caused by a positive act, the general rule remains that a duty of care is owed to those who lie within the reasonably foreseeable range of persons who may be harmed by one’s conduct. Where it is caused by an omission, something extra has to be shown — a specific duty of care.5
An organisation will only be guilty of an offence if the way in which its activities are managed or organised by its senior managers is a substantial element of the breach. The cause of the breach need not be the only factor. Senior management in relation to an organisation means the persons who play significant roles in ‘the making of decisions about how the whole, or a substantial part of its activities are to be managed or organised’ and ‘the actual managing, or organising of the whole, or a substantial part of those activities’.6 It will be for the judge to rule on whether a particular individual comes within that category, and for the jury to decide whether s/he does or not.
Clearly, in a large organisation with a diverse management structure, identifying those senior managers responsible for policies and practices will be fraught with difficulty. Senior managers could be directors carrying out central financial or strategic roles, or those with central responsibility for health and safety, as well as senior operational management roles. Presumably, the main source of evidence for establishing the duties of specific roles will be job descriptions, which are notoriously ill-defined. The rationale for the inclusion of the senior management test within the Act is not clear or obvious, and may yet prove to be a significant barrier to the successful prosecution of large organisations. The Government’s proposals made in 2000 recommended only that death should have been caused by a ‘management failure’ by the corporation.
The punishment
The principal sanction is an unlimited fine upon conviction in a Crown Court. While the level of fine has yet to be established, the Sentencing Advisory Panel, in its consultation document, has proposed a fine between of 2.5 and 10 per cent of the annual gross turnover of the organisation.7 The main issue with fines, regardless of what level is applied by the court, is that a large fine will only be an effective sanction for private, profit-making organisations. For those organisations in the public domain, such as NHS Trusts, local authorities, police forces, and so on, any large fine will undoubtedly be significantly reduced to ensure that public services are not unduly affected.
For instance, in the Barrow Borough Council legionnaires-disease outbreak case, the judge noted that a ‘commercial organisation acting as negligently as the council would have been fined at least £1m, but took into account that the fine will have to be paid from public finances and effectively borne by the taxpayers of Barrow-in-Furness’. The council was fined £125,000 — a discount of nearly 90 per cent.
Fines for offences must reflect the seriousness of the offence, as well as the financial circumstances of the offender, whether that is an individual or an organisation, pursuant to the Criminal Justice Act (CJA) 2003.8 It could be argued, however, that the laudable inclusion of the financial circumstances of the offender in the CJA was never intended to take into account the effect on public services. The same argument could be applied to individuals who are fined by the courts and the effect of a fine on their dependants; this has not been a successful objection to such penalties.
The CMA contains two non-pecuniary sanctions: a ‘remedial order’ and a ‘publicity order’. A remedial order requires an organisation to take specified steps to remedy the cause(s) of the breach in the event the organisation is found guilty. The remedial order must be applied for by the prosecution, who, in turn, must consult with the appropriate enforcement authority with regards to the terms of the order.
This provision in the Act mirrors section 42 of the HSWA 1974, where it states ‘power of court to order cause of the offence to be remedied or, in certain cases, forfeiture’. The reality, however, is that section 42 has rarely been applied by the courts to a convicted organisation owing to the length of time it takes for a case to get to court. The cause of the breach has normally been rectified either in mitigation, or as a result of complying with an enforcement notice. There is no reason to think that anything will be any different under the CMA.
A new legal sanction has been created with the introduction of the publicity order. Upon conviction, the court may make an order requiring the organisation to publicise, in a specified manner, the following:
(a) the fact it has been convicted of an offence;
(b) specified particulars of the offence;
(c) the amount of any fine imposed; and
(d) the terms of any remedial order made.
The court must ascertain the views of the enforcement authorities before imposing a publicity order and have regard to any representations made by the prosecution, or on behalf of the organisation. The publicity order has been designed to provide an alternative sanction to that of a fine, however it is most likely that it will be used in conjunction with a fine. The imposition of a publicity order is similar to the HSE’s ‘name and shame’ database, where a record of health and safety prosecutions and the names of those convicted are accessible to the public.
In reality, a publicity order is likely to have any significant impact only on private profit-making organisations, which may suffer from bad publicity, loss of share price, and other goodwill factors. However, much of the effect of a publicity order would be achieved via press coverage in the media prior to and during the trial, and following a conviction.
The role of the jury
Within the provisions of the CMA are several important elements for the jury to consider; these provisions fall under s8 of the Act — Factors for the jury. The jury must consider ‘whether the evidence shows that the organisation failed to comply with any health and safety legislation that relates to the alleged breach and, if so: (a) how serious that failure was, and (b) how much of a risk of death it posed’. It is improbable that a serious incident could arise without involving a breach of some form of health and safety legislation, and the seriousness of the failure must, surely, be relevant to how much of a risk of death it posed.
The difficulty with s8 is how specific should the failure to comply with health and safety legislation be? For example, s3(1) of HSWA could apply purely for exposing persons not in the employment of the duty-holder to a risk to their health and safety. At the opposite end of the scale, what weight will be given to the non-existence of, say, a risk assessment or, for that matter, a poorly-written risk assessment? These are difficult issues to pre-empt, and much will depend on the material facts, as well as how the prosecution presents its case and, of course, how the defence rebuts these charges.
Pursuant to s8, sub-section (3) the jury may also consider the extent to which the evidence shows that there were attitudes, policies, systems or accepted practices within the organisation that were likely to have encouraged any such failure…or to have produced tolerance of it. In effect, this sub-section has been designed to examine the culture of the organisation and, specifically, the safety culture. The nebulous nature of a safety culture makes this sub-section an interesting inclusion in the Act; although examining the culture of an organisation has been used in other jurisdictions such as the Australian Federal Criminal Code Act 1995, it is a first in UK law.
The jury may ‘have regard to any health and safety guidance that relates to the alleged breach’ courtesy of sub-section (5). Given the plethora of regulations and associated Approved Codes of Practice and Guidance Notes, it is once again inconceivable that the jury will not be asked to consider further some form of guidance, or rather non-compliance.
Finally, the jury may, in the ‘interests of justice’, be invited to return a verdict on each charge where, in the same proceedings, there is a health and safety offence charged against the same defendant arising out of some or all of those circumstances.9 Also, where an organisation has been convicted of corporate manslaughter or corporate homicide they may be charged with a health and safety offence arising out of all or some of those circumstances. It is likely that health and safety charges will be included in the indictment as well as corporate manslaughter.
In reality, an organisation is only likely to be charged with health and safety offences if it is not convicted of corporate manslaughter — otherwise, what would be the point? While the less serious health and safety offences will be reflected in a reduced fine, this aspect of the Act does appear to be a form of double-jeopardy, i.e. the defendant is tried twice for the same set of facts. One must question the good judgement and fairness of such a policy.
Individual liability
As previously mentioned, the CMA does not allow for any individual liability courtesy of section 18 and therefore the Act only applies to corporations. Without any individual liability there is good cause to suspect that the Act will not have the impact many hoped. For example, will those who have lost loved ones in an accident or disaster be satisfied that the guilty company is only fined — possibly a greatly-reduced fine in the case of a non-profit making organisation — while the senior officers of the organisation will be protected via the corporate veil, keeping their jobs, pay, bonuses, etc.
The now-abolished common-law corporate manslaughter did provide for individual liability, and a number of custodial sentences was meted out by the courts, albeit to directors of small, ‘one-man band’ type companies. Therefore, it is not unreasonable to question why the Act did not include individual liability.
In truth, there is no obvious reason. The only clue to its omission from the Act is the Home Office consultation document of 2000, in which it was noted that comments on the subject led to strong opinions on both sides, which were evenly split and so the call for an individual offence for senior officers was rejected. This is hardly a good reason for not including individual liability.10
Conclusion
The CMA is potentially the most important piece of statutory legislation since the introduction of HSWA 1974. However, with only a handful of prosecutions anticipated in any year the Act will only capture the ‘tip of the iceberg’ of non-complying organisations and, in reality, will have no impact on reducing the toll of work-related fatalities and serious injuries. Nevertheless, there is anecdotal evidence that, since the introduction of the Act, many senior managers have been reviewing their company policies and safety management systems and this should be seen as a positive step forward.
Whether this vigilance will continue partly depends on successful prosecutions in the future — and there is no certainty of that. The only certainty with the Act is that cases are set to be drawn out through protracted legal arguments about who is or is not a senior manager, whether a duty of care exists, whether there was a gross breach, and so on.11
The CMA has been ‘watered down’ from the Government’s original 2000 proposals to such an extent that it now only vaguely resembles what was originally intended. It was always going to be a challenging task providing a commensurate law for corporate manslaughter. While there is an appetite for a new law, there is much less agreement on what form it should take, or the appropriate sanctions. Alas, it appears the Government, in trying to appease all the various stakeholders, has concocted a complex, weak, and arguably amoral statute law.
About the author
Ray Rapp is a health and safety consultant working predominantly in the rail industry, in which he has more than 26 years’ experience. He is currently engaged in a rail/construction project in London for LUL. Ray is a chartered member of IOSH, holds an MSc in health and safety management from Leicester University, and recently completed an MA in health, safety and environmental Law at the University of Salford. This article is a summary of his dissertation.
References
1 Sentencing Guidelines Council (2007): Consultation Paper on Sentencing for Corporate Manslaughter
2 Gobert, J (2002): ‘Corporate Killing at Home and Abroad — Reflections on the Government’s Proposals’, in Law Quarterly Review, 118, (JAN) pp72-97
3 [1995] AC 171
4 Clarkson, CMV (2005): ‘Corporate Manslaughter: Yet More Government Proposals’, in Criminal Law Review, September, pp677-689
5 Hart Publishing [n.d.] Manslaughter: Duty of Care — http://www.hartpub.co.uk/updates/crimlaw/crimlaw_manslaughter.htm
6 Corporate Manslaughter and Corporate Homicide Act 2007 — 1(4)(c)(i) and (ii)
7 Sentencing Guidelines Council (2007): Consultation Paper on Sentencing for Corporate Manslaughter
8 s164(2) and s164(3)
9 s19 Convictions under this Act and under health and safety legislation
10 Whyte, D (2005): ‘The Fatal Flaws in the English Corporate Manslaughter Bill’ in Employment Law Bulletin, June, Vol 67, pp4-7
11 See also the shponline report of the In Court: Live session at this year’s IOSH Conference — http://www.shponline.co.uk/article.asp?pagename=ioshInterface&article_id=8585
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