Comprehensive Analysis of Corporate Manslaughter

A comprehensive analysis of corporate manslaughter and homicide act 2007 present in U.K. in relation to offence and meaning of relevant duty of care and a comparative study with the law present in U.S.

AIM

The aim of the work is the critical analysis of sections related to offence and relevant duty of care under the corporate manslaughter and corporate homicide act 2007. That has breach of Duty of care under section 174 C.A. 2006. To examine the problems that would arise in implementing penalties and to compare the law between U.K. and U.S. To evaluate the consequences for the breach of those duties and which further led to commission of crime.

Classification of the law to be studied

Corporate manslaughter and homicide act 2007

Director’s duty to promote success of the company and The duty of care, Company Act 2006.

Synopsis

The Corporate Manslaughter and Corporate Homicide Act 2007 will come into force on 6 April 2008, across the UK.

The Act sets out a new offence for convicting an organisation where a gross failure in the way activities were managed or organised results in a person’s death. This will apply to a wide range of organisations across the public and private sectors. In England and Wales and Northern Ireland, the new offence will be called corporate manslaughter. It will be called corporate homicide in Scotland.

Under a new approach, courts will look at management systems and practices across the organisation, providing a more effective means for prosecuting the worst corporate failures to manage health and safety properly.

In the context of the commission of a legal wrong by an employee of a company (other than in tort where vicarious liability may apply) the extent of a company’s responsibility for the wrongful act will be determined by ascertaining whether the human person responsible for the physical commission of the wrongful act can properly be identified as part of the company’s directing mind.(the identification principle).

The corporate manslaughter and homicide act 2007 has laid down the rules and regulation in relation to health and safety concerns of an organisation. The Act sets out a new offence for convicting an organisation where there is breach of relevant duty of care and a gross failure in health and safety concerns which result in death of a person. In the past, it has been impossible to bring an action against the criminal doing of corporation. But, the Corporate Manslaughter Act makes it clear to convict organisation for the wrongful act caused a persons death and senior managers are found to be in breach of their duty of care and thereby cause a death. The company’s managing director is the company’s directing mind as therefore if the company would be held liable for the manslaughter in terms not complying with health and safety measures and resulting in death of somebody then its directing mind would also be held liable.

Although there are obvious difficulties in establishing a company’s culpability for a criminal act perpetrated by one of its employees, it is possible, in accordance with the identification principle, for a company to be charged and convicted (by way of fine) of the most serious crime. There have been only seven small organisations convicted of manslaughter because it is easier to establish a link between the directing mind to a wrong doing of the company’s employee. Whereas in large corporations the ability to establish a mere employee (as say opposed to a director) as a part of the directing mind, will be especially difficult unless there is a direct line in the delegation of authority from the directing mind to the employee.

Corporate responsibility for an employee’s act cannot be found by, for example, establishing an indirect link to the directing mind through, for example, an aggregation of individual failure, which leads to and eventually results in the commission of an offence.

If the commission of offence and the wrong doing is established through the directing mind then he/she would be held liable as the breach of relevant duty of care under CMCHA 2007, then the directing mind (director) would also be held liable for the breach of relevant duty to promote the success of the company according to section 172(1) of company’s act 2007. Because he/she (Directors) not complying with health and safety standards that would result in fatal accident. Or it is also called a breach of duty of care according to s.174, C.A. 2006.

However, reasonable standards were set in relation to the duty of directors according to the company’s act 2006. Those standards were set in favour of the company’s director that they will perform their work in accordance with those. But in doing so if there is anything gone wrong and result in breach of those duties.

Will the director be held liable for breach of their duty? Is there any legal framework set for that?

It may be said that a directing mind will not be held liable for any injury caused by his/her decision because according to his duties they were acting for benefitting the company. But here is the question arises, will they are performing their work according to the reasonable standards that were set up in accordance with health and safety regulation. With the relevant duty of care, intelligence and diligence in the organisation.

Is the principle of vicarious liability fall on them which is called respondent superior in U.S.(when a crime is committed by employee for benefitting the company, that would be treated as good) But here in U.K. this principle of strict liability is the key feature of regulatory offences. Where strict liability imposed a person can be convicted of an offence without proof of a mental element such as intention or knowledge, or with the possibility of reverse onus defence of due diligence, or reasonable practical ability.

Purposed plan of work

Part 1-Origin and scope of act:

As there is some kind of mental element present behind the crime. In context of the companies if the activities are managed in some way that cause serious harm to the third party. Then it would be treated as totalled liability of the company’s management which are controlled by its senior management comprises of its directors (directing mind). It is not possible to make the company vicariously liable for the crimes with mental element: this would, in effect, be making the company criminally liable for all the criminal intents of anyone associated with the company. (Directors)

The issue of corporate killing has been the mental agony of associating the large companies liable behind the manslaughter which has done by them, resulted in the series of various disasters. Even if the business has been operated without inadequate regards to the health and safety standards there is a problem in commissioning the vicarious liability of the corporation. It is often impossible to find one individual responsible behind the failing of corporate responsibility instituted to him/her. As previously criminal liability of the company identified by aggregated failings of responsibilities instituted to all of its employees.

This would create the need of the law for the unseen offence of the corporate world. In July 2007, the corporate manslaughter and corporate homicide act become the law. It establishes new offence of corporate manslaughter.

Part 2-Reform and CMCHA

The act is enacted as corporate manslaughter and homicide act 2007 and came into force in 2008.

According to the section 1(1) of the act provides that an organisation will be guilty of the offence of corporate manslaughter if the way in which its activities are managed or organised causes a person’s death and amounts to gross breach of relevant duty of care owed by the organisation to the deceased.

This provision confirms that liability will be determined by examining the management or organisational failings of a company and as such no longer dependent upon the identification principle.

Section 1(3), A corporation will not be guilty of offence unless the way in which its activities are managed or organised by its senior management is a substantial element in the breach of relevant duty. “duty of care”

Section1(4)c of the act defines the senior management of a company as a person who plays a significant role in the making decision about how the whole or a substantial part of the company’s activities are to be managed or organized or, secondly, as person who plays a significant role in the actual managing or orgainising of the whole or substantial part of those activities.

While in any given case it may be impossible to attribute responsibility for a breach of relevant duty to an individual senior manager, it may be possible to establish corporate liability through the cumulative conduct of senior manager of the company.

Question arises: Is their a need to establish corporate liability in order to prove the liability of its senior management, as its directing mind is their senior management?

At common law, liability may arise if the cause of person death is related to the improper management practices of senior manager. That they didn’t comply with rules and regulation provided to them by company’s act 2006. Section 174 with duty of due care, diligence and skill result in the breach of their duty causes person death and they also avoid health and safety rules by didn’t comply with them.

Part 3- Under CMCHA 2007, section (2). A “relevant duty of care”, in relation to an organisation, means any of the following duties owed by it under the law of negligence—

The act laid down the relevant duty of care in relation to an organisation which has to be followed up by its senior management (employers or directors). The company will be guilty of the offence of corporate manslaughter only if the way in which its activities are managed or organised by its senior management is a substantial element in the breach of the relevant duty. The guilt must be established by a direct link between the company’s activities and senior management who playing a significant role in managing and organising.

Question arises: (a) Is their any framework to ensure that the senior management would be held liable for criminal offence if the guilt established?

(b) Critical examining the factors that will help in establishing the substantial element between the management and breach of duty of care? That will further result in the fatal accident.

(c) The law of corporate manslaughter and corporate homicide act laid down rules and regulation and creation of offence if there is a breach of relevant duty of care. However the legislation has unable to increase the number of prosecution for this offence.

Research work suggest further reform if necessary and critically examining the grounds on which the certain individual can be found guilty of crime, by breach of relevant duty of care.

Part 4- Analysis of position of law at present in U.S. relating to the corporate responsibility As in U.S. the attributes and functions of the senior management level would be greatly treated as good one, if those acts result in the success of the corporation even if those acts (of senior management) will be breach of their duty and the result of which that the liability should imposed upon senior management by those acts. But its not. In U.S. there is aggregation test for the computation of gross breach of negligence caused upon the parties affected whereas it’s called identification test in U.K. the research work conclude the various similarities and dissimilarities laws. The sentencing for the punishment in U.S. and U.K. Under U.S. there is a punitive damage system prevails in U.S.

According to the U.S. corporate criminal liability-

Corporations are only liable for the act of employees if the employees are acting within the scope and nature of their employment.

A corporation will not be liable for the act of its employees unless those actions are designed to benefit the corporation.

To hold a corporation liable for the acts of its employees, a court must impute the intent of the individual to the corporation.

The collective knowledge doctrine

The willful blindness doctrine

Conspiracies

Mergers, dissolutions and liability

Misprision of felony

Where In comparison to that, the corporate manslaughter act is more significant in U.K. in U.S. according to its corporate criminal liability law because very difficult to hold either organisation or its officer responsible for gross negligence.

In comparison to section (a) above, The company law 2006, U.K. has provide certain duty to directors according to which they have to work and perform their role in organisation. Section 172 has provided that a director must have to act in the way that his action promote company’s success. and the act in section 174 has provide that a director must have to act with care and skill. And in the CHCHA 2007 section (2) has provided the meaning of relevant duty of care to be related to specific corporate functions or activities, for example: the company as an employer, the company as an occupier of the premises, the company as a supplier of goods and services, constructing or maintaining buildings, infrastructure or vehicles, and other activities carried out on a commercial basis.

In seeking to determine whether there was a breach of duty, s.8 stipulates that the jury must consider whether, in relation to the alleged breach, the company failed to comply with health and safety legislation. A breach of a company’s duty of care must be established as an act of gross negligence. This would relate the breach of duty of care provided to the company’s director according to the company’s act 2006. But s.8(3) provided complications in the identification of gross negligence as the jury is permitted to consider the extent to which the evidence establishes attitudes, policies, systems or accepted practices within the company that could have encouraged or alternatively produced tolerance of the management or organisational failure of that company in respect of that breach.

Therefore in relation to a breach of duty, a company’s past and current record of compliance with health and safety matters, in respect of the breach of duty in question, may be a paramount factor in determining liability.

Part 5: Conclusion

Approaches and Methods

Approaches:

Doctrinal or Black Letter Research:

In this research work with the help of principles laid down by legislation in international sphere of law will be conducted. As well as statutes of the law and judgments related to corporate manslaughter and corporate homicide act. Black letter method useful in proving exact nature of the task by established statutes. The review of CMCHA will be enquiring with the help of this approach and company act 2006. Duties of director have been laid down under CA 2006 under which there is a duty of care in s.174 which has further explained in CMCHA under relevant duty of care. The breach of relevant duty of care is creation of an offence according to the act. With the help of decided cases the research study will further proceed.

Historical Research:

As the new legislation CMCHA 2007 has formed through reform of corporate manslaughter. The method of this approach will be adopted in the research work with the detailed review of position under the common law present here in relation to corporate manslaughter. This approach would be adopted with a view to bring sharp focus on the developments under the common law principles of corporate crime.

Reform:

As a part of this dissertation objective is to evaluate CMCHA on corporate crimes at present and the scope of this new legislation. Reform approach will be adopted.

Methods:

Use of Archives:

For gathering useful information for my research work I conduct an extensive search of archives- data from books easily found in libraries, accessible source from websites.

Surveys:

The surveys should be conducted in order to collect information about the scope of the new legislation, in the present sphere. Survey will be in form of collecting information from various groups of company management. In the form of interview and questionnaire will be carried out. The objective of the survey will be to access the impact and relevance of this new legislation.

References collected and to be studied with Literature Review

Books

D.Keenan, ‘Smith and Keenan’s Company Law’ (12th edition, Ashford Colour Press Ltd 2002)

This book has explained and differentiates the duties of the director’s towards the company into two categories i.e fiduciary duties and duties of skill and care. The author argues that a director also owes a duty of care to the company at common law not to act negligently in managing its affairs. The research will be based on the above mentioned facts if the director act negligently or if their is a breach of that relevant duty of care then director must be held liable for the commission of an offence under the CMCHA.

Celia Wells, “Corporations and Criminal Responsibility”, 2nd edn 2001 OUP.

In this book the author has argued the issues relating to health and safety and their relation with the criminal law and justice. There is a detailed background of corporate manslaughter is described in that book with the comparative approach or law present in the U.S. it would be useful work in the research in analysing the historical background of the corporate killing.

Michael Jefferson, “Criminal Law”, 7th edn 2006.

The author has given a detailed explanation about the corporate manslaughter. Is it the killing by gross negligence or called to be constructive manslaughter. There is much more useful information can be gathered from that book. This book also contains the reform of corporate manslaughter after which the new offence laid down by the legislation with the new act of CMCHA 2007.

R.B. Whittingham, “Preventing Corporate Accidents-An Ethical Approach” 1st 2008 Published by Elsevier Ltd.

In this book author has presented the descriptive view for the enactment of corporate manslaughter and corporate homicide act. The companies can be taken to the court in relation to corporate manslaughter both under the criminal law and civil law. The identification principle has been described and the duties of director under the CA 2006 further breach of those duties how led to a corporate crime if the breach result in fatal accident.

Len Sealy and Sarah Worthington,” Cases and Material in Company Law” 8th edn 2008 OUP.

With the help of cases and material, laid down principles by court in those cases and the related statutes have been described by the author in this book. In relation to the criminal liability and breach of duties of directors cases have been presented by the author to give an argumentative approach in those particular field.

Journals/Articles

Griffin, Stephen, “Corporate manslaughter- A radical reform?, J. Crim. L. 2007, 71(2), 151-166.

In this the author has presents a critique of the offence of corporate manslaughter introduced by corporate manslaughter and corporate homicide bill 2006. In terms of gross negligence test and the difficulty of establishing a senior management failure in companies with complex management structure. This piece of work in journal would be helpful in part one of the dissertation.

2. Davies, Neil, “Sentencing guidance: Corporate Manslaughter and health and safety offences causing death – maintaining the status quo?” (2010), Criminal Law Review.

-In this piece of article author gives the account of guidelines which were provided by the Sentencing Guidelines Council (SGC), to prosecute the organisation for offending the rules and breach of the health and safety concerns, in terms of imposing fines on such organistion.

3.Abeyratne, Ruwantissa, “Negligent entrustment of leased aircraft and crew: some legal issues” Sweet & Maxwell 2010

-The author has discussed the circumstances of negligency caused by the aviation industry resulting in airline crash. Will the injuries caused to the third parties treated as vicarious liability of the lessor and lesse of aircraft? Will the airline held liable for corporate manslaughter?

Newman, Jennette, “Uncharted territory” N.L.J. 2010, 160(7407), 340-341.

-The author assesses the sentencing guidelines in effect from February 15, 2010 provided by sentencing guidelines council for conviction of organisation under CMCHA 2007 and health and safety offences resulting in death

Hsaio, W.H. Mark, “Abandonment of the doctrine of attribution in favour of gross negligence test in the corporate manslaughter and homicvide act 2007″ Company Lawyer 2009.

-In this author has broadly classified the identification principle which joins the connection between the organisational work and its directing mind by the statute that an organisation is a separate legal body or person, but its decision could not be taken by itself. The rule of identification is based on general rule and specific rule of attribution which is determined by looking into the legislation under which the company was charged.

6. Griffin, Stephen, “Corporate killing- The corporate manslaughter and corporate homicide act” L.M.C.L.Q. 2009, 1(Feb), 73-89

-In this the author has discussed the provision of imposing criminal liability on relevant organisation if senior management failure is a substantial element in the breach of duty of care that has led to fatal accident. Further the author elaborates the standard for establishing liability, the redefinition of the common law identification principle and the rule that the liability cannot be apportioned between a company and its senior management.

7. Wright, Frank B. “Criminal liability of directors and senior managers for deaths at work” Crim. L. R. 2007, Dec, 949

– In this article the author discusses the developing law surrounding the criminal liability of directors and senior managers for deaths at work and proposes new directions in enforcement policy and practice based on his recent research.

8. Clark, Bryan and Langsford, Hannah, “A re-birth of corporate killing? Lessons from America in a new law for Scotland”  I.C.C.L.R. 2005, 16(1), 28-37.

– This article gives a distinct approach to the formulation of corporate killing law and reform proposals and alternative approaches to both substantive corporate killing laws and sentencing manifest in the United States.

9. Glazebrook, P. R. “A better way of convicting businesses of avoidable deaths and injuries?” Cambridge law journal, 2002.

– In this the author has examined the Gross negligence manslaughter, on which this “corporate killing” offence is modelled, is not(as constructive, “unlawful act”, manslaughter is) one crime but two.

10. Keay, A, “Tackling the issue of corporate objective” (2007) SydLawRev,23.

– this article analyses the provision and argues that while the enlightened shareholder value approach provided for by s 172(1) is seen as providing a significant new development in UK law and the s.174, the value of shareholder will automatically decrease or unseen if their is offence done by the directors which has proved by the breach of their relevant duty of care under CMCHA 2007.

Websites

Heinonline- Its the main information source to find law journals and law related material of U.S. law research. It includes the law journal library and U.S. Supreme court library which is useful source of information in my research work.

Lexis Library through lexisnexis.com- Its also useful website for finding cases related to corporate manslaughter and corporate homicide act. Also it has all the cases and legislation of U.K.

Westlaw- It provides good source of access to cases legislation journals articles which is needed in my research work.

Google.com-For finding online information

Hansard.com- for parliamentary debates and speeches related to my research work.