Vicarious liability is the legal liability imposed on one person for torts and crimes committed by another, even though they are not ‘personally’ at fault. Lord Millet stated during the case, Dubai Aluminium Co Ltd v Salaam  , “Vicarious liability is a loss distribution device based on grounds of social and economic policy”. This means that the employer, although personally blameless, stands in the shoes of the wrongdoer employee and that the employer, even though they haven’t personally commissioned the offence, are responsible as they have created the risk.
The identification doctrine which was imposed by the Criminal Law Act 1827 is the idea that a company can be seen as having a legal personality, separate and distinct from its members and shareholders and can sue as well as be sued in its own name. Lord Denning stated during the case of HL Bolton Engineering Co Ltd v TJ Graham & Sons Ltd   “A company may in many ways be likened to a human body. It has a brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such”. In the case of Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd , Viscount Haldane had the view that “A corporation is an abstraction. It has no mind of its own anymore 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 alter ego and centre of the personality of the corporation.” the court took the view that the minds of those who control the company are the mind of the company itself and so started to embrace the directing mind theory. The courts reserve the right to examine a company’s incorporated status and if it is discovered that incorporation is being used as a front behind which wrongdoing takes place then the veil of incorporation can be lifted to identify whether an individual has committed the actus reus of a crime with the appropriate mens rea. To achieve this, the mind of a senior individual in the company is identified with the mind of the company. The identification doctrine does face problems in holding corporations accountable, particularly larger corporations, whose internal structures are, by the nature of their size, complex. This can be demonstrated with the case R. V HM Coroner for East Kent Ex p. Spooner , LJ Bingham stated that “A company may be vicariously liable for the negligent acts and omissions of its servants and agents, but for a company to be criminally liable for manslaughter, it is required that the mens rea and the actus reus of manslaughter should be established not against those who acted for or in the name of the company but against those who were to be identified as the embodiment of the company itself”. J Turner also illustrated the problems of holding corporations accountable during the case R. v P&O European Ferries  (dover) Ltd  where he directed acquittal of the company and directors, as it was impossible to find the directing minds and there was no evidence offered against lower ranked employees. The judge said “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 as well as its controlling mind or minds, is properly indictable for the crime of manslaughter” in the case R. V Kite & OLL Ltd  Winchester Crown Ct  the company was convicted of gross negligence manslaughter and fined £60,000. This was because the mens rea of the managing director was attributed to the company because the safety standards where low and this was known to him. This was a small company and so it was less problematic finding the directing mind and will of the company. The identification doctrine also faces challenges such as in the case Meridian Global Funds Management Asia Ltd v Securities Commission , Lord Hoffman thought that the identification doctrine was too narrow and so suggested a two part test for courts. Firstly if the doctrine would defeat the purpose of a statute and secondly liability could be imposed by attributing the knowledge of a person who had the authority even if they were not the directing mind. This was rejected in many cases as there was no likelihood of finding a single individual sufficiently reckless to constitute gross negligence manslaughter.
In response to the problems of the identification doctrine, used by the common law, the Corporate Manslaughter and Corporate Homicide Act 2007 was enacted. The Act arose from the realisation that the common law principles of manslaughter where not suited to the prosecution of companies. This is because the notions had been developed to deal with individuals.
Corporate manslaughter legislation refers to the Corporate Manslaughter and Corporate Homicide Act 2007, which was the first statute governing and was introduced on 26th July 2008 across the United Kingdom for the prosecution of companies and other organisations. S1(1)provides that the new statutory indictable offence of corporate manslaughter is committed by a relevant organisation if the way its activities are managed and organised causes a person’s death and amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased. However S1(3) of the Act provides that an organisation is guilty of the S1(1) offence only if the way its activities are managed or organised by the senior management is a substantial element in the breach to which S1(1) refers. A breach is a gross breach only if it falls below what can be reasonably expected of the organisation in the circumstances. Senior management are the persons who play significant roles in the making of decisions about how the whole or a substantial part of its activities are managed or organised. A relevant duty of care means; a duty owed to its employees or other persons working for the organisation or performing services for it, a duty owed as occupier of premises and also a duty owed in connection with; the supply by the organisation of goods and services, the carrying on by the organisation of construction or maintenance operations, the carrying on by that organisation of any other activity on a commercial basis and the use or keeping by the organisation of any plant vehicle or other item. Therefore a duty of care has first got to be proved, the breach of that duty of care, and then causation. In addition, the courts will consider how the fatal activity was managed or organised by senior management as a substantial element of the gross breach, which will include any system and process for managing safety and how these were operated in practice.
One danger of the act is that the new “senior manager” test, as seen in Section 1(4)(c) may encourage companies to delegate health and safety responsibilities to non-senior managers which would protect the company from criminal liability. However this irresponsibility, may in fact lead to a conviction of gross negligence about safety. This test is also a worry as the courts may be faced with determining what senior management is, as they were faced with similar problems when determining the directing mind of the company under the identification doctrine. Clarkson stated that identifying senior managers “seems unduly restrictive and threatens to open the door to endless arguments in court as to whether certain persons do or do not constitute senior managers”. Clarkson does however express that the definition of senior management which is expressed in the act, should resolve this issue. Further problems could also arise such as determining whether or not certain people played a “significant role” in making decisions about “substantial parts” of the company’s activities. This could cause confusion because it implies that liability for corporate manslaughter will only be established where the senior management, as a collective body, is deemed responsible for a culpable management failure.
Another problem with this test is that it could favour larger companies, as they have a larger scope than a smaller company, when arguing that the management failure did not take place at a sufficiently senior level. It could be argued that the failure took place at a middle or junior management level and although there is responsibility for senior management to oversee effectively the activities of the lower tiers of management, that failure did not amount to a “substantial element” in the breach.
Critics argue that companies are creatures of law and so crimes can only be committed by people and not by companies. The issue is therefore determining when the acts of these people should be attributed to a company. Corporate liability, which rejects the notion of corporate culpability, is perceived to amount to little more than a broadening out of the present identification doctrine. Clarkson says that it is “An endorsement of a version of the aggregation doctrine where, instead of identifying one senior directing mind, one aggregates the actions and culpability of several senior persons” The aggregation doctrine combines the actions and culpability of several senior persons instead of identifying one senior directing mind.
The act also faces criticism because it is said in section 1(1)(b) that a company can only be guilty if the person’s death was caused by “a gross breach of a relevant duty of care by the organisation to the deceased”. Section 1(4)(b) of the act states that “a breach of a duty of care by an organisation is a “gross” breach if the conduct alleged to amount to a breach of that duty falls far below what can reasonably be expected of the organisation in the circumstances.” When considering this issue there are a number of factors the jury must take into account. The jury must consider whether the organisation failed to comply with any relevant health and safety legislation, when deciding if there has been a gross breach of duty. If the organisation did fail to comply with the relevant health and safety legislation, it must consider how serious the failure was and also how much of a risk of death it posed. In addition, the act also states that the jury may also consider whether or not the evidence shows that there were “attitudes, policies, systems or accepted practices within the organisation” that were likely to have lead to any such failures. Furthermore, the jury will be required to answer some problematic questions such as how is it possible to quantify a reasonable standard to be expected of a company in the provision of health and safety matters? Doing everything a company possibly could, within reason, to ensure compliance with health and safety issues in respect of a particular breach of duty, is different from a company complying with a reasonable standard of health and safety provision. Another question is will the “reasonable standard” be universal and applicable to companies of a similar size, companies in particular industries or a combination of these? The next question is will economic circumstances and financial statuses of companies dictate what is accepted as a reasonable health and safety regime? Will companies that engage in more dangerous activities and have a greater expectation of death, due to corporate activity, have a higher “reasonable standard” of health and safety than a company which is considered to be safer? Finally, if the ‘reasonable standard’ is driven by political and economical considerations, will the ‘reasonable standard’ be exclusively judged in terms of health and safety issues? The jury may also have to consider and health and safety guidance that relates to the alleged breach and any other factor that it considers relevant to the case. A company’s past and current record of compliance with health and safety regime may become substantial and a decisive factor when determining corporate liability. The impact of company’s compliance or non compliance with the health and safety regime could influence the jury and so the “reasonable standard” test will be subjected to mitigating factors which is a danger and can be inequitable. This may be seen relevant when punished by a fine but as an inappropriate way of determining the outcome of an individual case, as a case should be judged exclusively on the actual facts and circumstances surrounding it as supported by Griffin, “a case should be judged solely on the facts and circumstances surrounding the particular incident that resulted in the death of a person. It is submitted that a company should, as with an individual, be judged guilty or not of the offence of manslaughter following the jury’s examination of the nature and extent of the alleged negligent conduct. The jury should not be in the position of being potentially influenced by cultural issues relating to the company’s compliance record in health and safety issues”.
In the light of the public interest factor, the relatives of the victims of the crime may more readily perceive the transparency of the judicial process as one which incorporates operative justice. Prosecuting a company for corporate manslaughter rather than under HSA 1974 may offer some degree of emotional benefit and support to the relatives of the victims. Although it is assumed that the victim’s families would rather individuals be prosecuted rather than companies. Wells  argued “it is not the separated and de-humanised company on which people have trained their sights”.
The Corporate Manslaughter and Corporate Homicide Act 2007 makes it easier for larger organisations to be found guilty of Corporate Manslaughter than the previous legislation did. It achieves this by removing the Identification Principle and allows for the aggregation of collective management failings to be adequate proof of guilt. Although there is no power of imprisonment associated with the Act, it will now be possible to ensure that unlimited fines are levied against organisations that cause death as a result of management failures with respect to health and safety. As well as being fined, organisations may be required to implement certain remedial actions and may also be required to publish details of their offences and the penalties implemented.
Cite This Work
To export a reference to this article please select a referencing stye below:
Related ServicesView all
Related ContentJurisdictions / Tags
Content relating to: "UK Law"
UK law covers the laws and legislation of England, Wales, Northern Ireland and Scotland. Essays, case summaries, problem questions and dissertations here are relevant to law students from the United Kingdom and Great Britain, as well as students wishing to learn more about the UK legal system from overseas.
The Impact of Companies Act 2006, s.172
For global economies like the UK, a shift towards codified duties aimed at corporate governance seems inevitable. Anglo-American business management......
Caswell v Powell Duffryn
A mine worker was responsible for periodically cleaning the movable plates of a coal-transporting conveyor belt, instructed to ensure that......
DMCA / Removal Request
If you are the original writer of this essay and no longer wish to have your work published on LawTeacher.net then please: