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Corporate manslaughter legislation has done very little to prevent deaths attributable to directors’ intransigence. Indeed, it may be apt to say it was a mere political gesture offered following several high profile disasters such as the Clapham Junction rail crash, Piper Alpha, and the Herald of Free Enterprise.
Critically assess the above statement with reference to academic commentary, and by comparing the Corporate Manslaughter and Corporate Homicide Act 2007 with the common law.
Corporate manslaughter is when a person’s death is caused by an act of corporate negligence. It is a very complicated offence when the courts are deciding if to make a conviction or not. This essay will investigate into the previous common law identification principle and the introduction of the Corporate Manslaughter and Corporate Homicide Act 2007. The essay will also establish if the enforcement of this act has had any impact on the law, which corporate manslaughter is concerned with.
A company can be made into a corporation by Royal Charter, by an Act of Parliament or by the procedure established under the Companies Acts 1985, 1989 and 2006. Once a corporation is created they are given a separate legal personality. This means the corporation now has a personality which is completely separate from the members or directors who carry out the functions of the company. The status of having a separate legal personality also means the newly established corporation will have various characteristics of a natural person. The case which emphasises the idea and importance of a company being a separate legal personality from the people who created it is Salamon v Salamon & Co Ltd 1897. Mr Salamon was told he could not claim back the money from his debenture as he had been lending money to himself from the company. However, the courts stated as the company had been validly formed, Mr Salamon could claim the money back. This was because the company had a separate legal personality from him once it had been formed. Therefore, Mr Salamon could validly lend money to himself from his company. Consequently, this separate legal personality creates a veil of incorporation between the company and its members/shareholders. This means that the members of the corporation have limited liability in legal matters regarding the company. However, the courts can lift the “veil” if they believe members within the company have acted illegally, for example if they have contributed to gross negligence manslaughter. The case of Gilford Motor Co. Ltd v Home 1933 is an example of when the courts have lifted the veil of incorporation. In this case the courts lifted the “veil” and found that the defendant had formed a company which they saw to be a sham.
Before the Corporate Manslaughter and Corporate Homicide Act 2007 was enforced, companies were rarely found to be guilty of manslaughter. The identification doctrine, which indicates that ultimately only an individual can be held responsible for an offence as serious as manslaughter, was a big influence to why this was. The first case which resulted in a company being convicted of manslaughter was OLL 1994. The courts found that the mens rea, the guilty mind, of the managing director of the company was attributable to the company. Therefore, this contributed to him and the company being found guilty for the death of four students due to insufficient safety measures.
However, before the introduction of the act, many cases regarding corporate manslaughter had very different conclusions compared to the OLL 1994 case. The Clapham Junction rail crash, which involved a collision of three trains in December 1988, is one case which resulted in no one being found guilty of corporate manslaughter. No convictions were made by the courts, even though British Rail had failed to recognise a severe signalling problem; leading to the death of 35 people, with a further 500 being injured. However, it could be argued that British Rail should have been convicted of corporate manslaughter, due to them having a duty of care towards their passengers. They should have made sure adequate and safe signalling was in place to prevent any danger to the passengers onboard their trains. This breach of duty can be classed as gross negligence, and therefore corporate manslaughter, as the company failed to carry out a duty of care that was expected of them.
Piper Alpha is another case which involved no conviction of corporate manslaughter and lead to the questioning and suitability of the common law in place. Occidental Petroleum Ltd was found to have insufficient safety procedures and maintenance, after an explosion on the oil platform killed 167 of its workers. This decision could be said to be wrong and the company should have been convicted of corporate manslaughter as there had been a breach of the duty of care the company owed to its employees. The breach could be seen as gross negligence manslaughter as the company should have been making sure the working conditions were safe for their employees to work in.
The case involving the Herald of Free Enterprise also resulted in no conviction of corporate manslaughter being made. The ship capsized in March 1987, killing 193 of the passengers and employees onboard. P&O Ferries Ltd was charged with corporate manslaughter and a further 7 individuals within the company were charged with gross negligence manslaughter; however the case collapsed and no convictions were made. This could be seen as the incorrect decision as P&O Ferries Ltd clearly had a duty of care towards their customers and employees. This duty of care was breached due to the fact the company policy was to make sure the boat set off with the bow doors closed. This could be classed as gross negligence as it led to the death of 193 people. Therefore, P&O Ferries Ltd should have been convicted of corporate manslaughter.
The sinking of the Marchioness, in August 1989, is another high profile case which also led to the questioning of the previous common law. The disaster caused the death of 51 passengers. The skipper of the Bowbelle, the boat which caused the capsizing of the Marchioness, was found not guilty of failing to keep an accurate look-out. However, it could be concluded that Henderson, the skipper of the Bowbelle, should have been convicted of corporate manslaughter by gross negligence. This is because he had a duty of care towards other ships on the river, as well as his own, and the passengers upon all of the ships. He breached this duty and as a result 51 people were killed.
Overall, due to the outcome of these high profile cases and many more the Corporate Manslaughter and Corporate Homicide Act was bought into place. However, it is questionable to if the act has had any impact on the courts when deciding if to convict a company of corporate manslaughter.
The Corporate Manslaughter and Corporate Homicide Act, which was enforced in April 2008, is the main legislation which has been put into place regarding corporate manslaughter. The act was introduced to try and make it possible for a company to be responsible for corporate manslaughter and have legal action taken against them if a death or deaths have occurred due to bad management practice or management failure.
S1(1) of the act states that a company can be found guilty if the management practice of the company was of a poor standard at the time of the offence. The management practice has got to be something that can be directly linked to the death’s which occurred. Also, the management practice has got to have caused a person’s death and breached the relevant duty of care it is expected to carry out. A relevant duty of care can be the duty the company owes to its employees, the customers using the service of the company or the duty the company owes as the occupier of its premises. Also, a relevant duty of care can be the duty the company owes to anyone involved directly with the company, for example the suppliers. The breach of this duty of care can be classed as a gross breach if the company falls below what is expected of the company in the specific circumstances involving the offence.
However, s1(3) of the act states that the company can only be found guilty of corporate manslaughter if the breach referred to in s1(1) of the act involved the senior management playing a huge part in the poor management of the company’s activities. This makes convictions very complicated for the courts as it is not always easy to work out who the senior management of the company is if it has a complicated management structure.
On the whole, the application of the Corporate Manslaughter and Corporate Homicide Act 2007 is very specific and in depth compared to the previous application of the common law. Also, even though there are only a few deaths which take place within the workplace, they will still be dealt with under the healthy and safety law whereas, they could be concluded under the manslaughter and homicide law. On the other hand, the act has allowed courts the power to make companies responsible in their own rights for a death caused by bad management practice or management failure. Even if the directors are not found guilty, the company can still be found guilty and therefore convicted.
However, it could be argued that the act was only bought into force after several disasters had taken place in the 1980’s and 1990’s. Inquiries and investigations were carried out after all of the high profile disasters had taken place. The ongoing investigations publicized the fact that the events that had caused the disasters would have been preventable if the management practice had been of good quality. Furthermore, the fact that no convictions were made could have made the government feel under pressure to change the law and make it easier for companies to be found guilty of corporate manslaughter. However, it is difficult to establish if the outcome of the high profile cases would have been different after the introduction of the Corporate Manslaughter and Corporate Homicide Act. It is very unlikely a conviction would have been at the trail of these cases as the act is complicated and it is just as difficult to find a company guilty of corporate manslaughter under the act as it is under the common law, which previously existed.
Therefore, it could be argued that a political gesture was offered when the act was created.
In conclusion, the previous common law that existed made it difficult for companies to be found guilty of corporate manslaughter due to the identification principle. This principle made it difficult for the courts to make a conviction due to the fact that it stated only an individual can be responsible for such a serious offence. On the other hand, the introduction of the Corporate Manslaughter and Corporate Homicide Act 2007 has done little to increase the number of convictions of corporate manslaughter and reform the law. Only 7 convictions have been made since the act was bought into force, even though 34 prosecutions were bought in front of the courts. This shows the act has had little influence on the courts due to the small amount of convictions. The lack of convictions could be due to the fact that the act is very specific and it is very difficult to establish some of the principles involved in finding a company guilty. For example, distinguishing the senior management of some companies. Also, the act is still linked to the identification doctrine in some respect due to the fact that the company can only be found guilty if the senior management has played a significant part in the management failure which consequently caused the death. The identification doctrine only allows for an individual to be found guilty of corporate manslaughter and this is evident in s1(3) of the act because the conviction will not be made unless an individual, part of the senior management, is found guilty. A further criticism of the act would be one made concerning the feelings of the family and friends of the deceased. If a company is found guilty of corporate manslaughter the action taken against is generally an unlimited fine or a publicity or remedial order. The family and friends of the deceased may find this offensive and disheartening as no one is being punished for their wrong doing, which led to the death of their relative or friend. However, the act has only been in force for two years consequently, the courts may find it easier to interpret in the future leading to further convictions of corporate manslaughter.
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