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Corporate Manslaughter Legislation

Info: 2521 words (10 pages) Law Essay
Published: 6th Aug 2019

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Jurisdiction(s): UK Law

Critically asses the above statement with reference to academic commentary, and by comparing the Corporate Manslaughter and Corporate Homicide Act 2007 with the common law.

On the 6th April 2008 the Corporate Manslaughter and Corporate Homicide Act 2007 came into force, the main part of the act was to be able to hold a company responsible for the death of a person and taken to court under its own legal entity. Some may argue that the act was introduced simply as a political gesture however case law may well argue to the contrary.

A legal entity is the same in principle as having your own personality; as such both the rights and responsibilities of life are attached to it. This can now also be said for companies. Although people still physically have to run the company there is a veil of incorporation to separate the company from those who own it. This is also through the Doctrine of Separate Legal Personality which underlines a company as being an abstract concept, i.e. that of a legal fiction and as seen through HL Bolton Engineering Co. Ltd v TJ Greham & Sons Ltd [1] that “directors and managers represent the directing mind and will of the company and they 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”. For a person to be found guilty of an offense however there are two key things that must be proved, the actus reus and the mens rea (the guilty act and the guilty mind) of cause it is simply not possible to assess the mental state of a company as it has no mind, it simply runs by the people who control it, hence where Vicarious Liability plays a key part. Vicarious Liability is “the legal liability imposed on one person for torts and crimes committed by another, even though they were not ‘personally’ at fault.” [2] After dishonest acts within the company to the sums of US $50 Million, in Dubai Aluminium Co. Ltd v Salaam [3] it was ruled that “Vicarious liability is a loss distribution device based on grounds of social and economic policy. The employer, although personally blameless, stands in the shoes of the wrongdoer employee.” In addition to this it was seen in Tesco v Nattrass [4] that Judge Reid ruled that “a living person has a mind which can have knowledge or intention or be negligent and he has the hands to carry out his intentions. A corporation has none of these; it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company.” Therefore showing the difficulties in deciding where the responsibilities of one person and the responsibilities of the corporation begin.

Before the Corporate Manslaughter and Corporate Homicide Act 2007 came to power rulings had to be made using common law and liability for a tort or crime could only be achieved through applying the identification doctrine. Common law said that a person could be held liable for involuntary manslaughter by gross negligence, a breach of a duty of care and a death resulting from that breach of care or for a breach so great that it could be characterised as gross negligence.

One example of a high profile case that happened before the act came into force was that of the sinking of the Herald of Free Enterprise [5] . Time pressures from the company to complete as many sea crossings as possible lead the staff to being over worked and inevitably mistakes were made in the form that the bow doors were not closed before departure, water rushed in and of cause the boat sank. Using only the identification doctrine the case collapsed and nobody was found liable due to the fact it was not possible to identify the directing mind of the company due the size and complexity of the internal structure and as such to be reckless enough for the charge of gross negligence manslaughter. Had the 2007 act been in place then the Jury would not have had to consider who was personally at fault with the disaster but rather the management practice of putting the boat to see with its bow doors open and of cause the management could have been tried under the act as they would be vicariously liable.

A further example of a high profile case came with that of the Clapham Junction Rail Crash on the 12th December 1988 which resulted in 35 deaths and over 500 injuries. After an abrupt signal change the driver reported to signal control that he had ran a red light, despite this the driver was told he was clear to proceed, another train then ran into the back of the first train after also being under false proceed signals. The second crash came as a result of a train crashing into the wreckage and thus derailing. After an inquiry it was revealed that major re-signalling work that should have been undertook by senior management was actually overseen by two middle level technical staff that had very little supervision over them. Despite the facts that after the inquiry a number of recommendations were made into how British Rail should improve their safety standards, no actual convictions were ever made despite the obvious fact of a breach in the duty of care.

Another large scale accident was that of the Piper Alpha disaster on the 6th July 1988, because of the lack of safety precautions, unfinished work on the backup gas pipes led to an explosion that killed 167 of the 229 people on the rig. An inquest found there were many breaches in health and safety including the fact that none of the staff had received any safety training for the event of fire or explosion and that the fire walls had not been built for the purpose they were used for. The inquiry also made may recommendations [6] such as the introduction of pump safety valves and creating temporary breathable refuge areas in the event of fires. A case was brought to court against Occidental who both managed Piper Alpha and carried out regular safety checks upon the rig. The company was found guilty of having inadequate maintenance and safety procedures but no criminal convictions were ever brought forward.

The first actual conviction for Corporate Manslaughter came as a result of the Lyme Bay Canoe Disaster [7] which came about of the death of 4 teenagers due to ill maintained equipment that was used on the outing. The acting mind of the Managing Director attributed to the workings of the company in the sense that safety standards were low and he knew full well of this. As such the company was fined £60,000 and the Managing Director received three years in jail, but only served two on appeal.

The Corporate Manslaughter and Corporate Homicide act of 2007 was introduced in order to provide justice not only against individuals but also that of crimes that happened as a result of poor management or organisation. The law [8] states that management can be held liable should their lack of a duty of care “cause a person’s death, and amount to a gross breach of a relevant duty of care owed by the organisation to the deceased”

As seen, thanks to the amendment to the law these past events of case law may have been decided with different results, but even so it does not mean that this amendment to the law is not without its problems. One such example is that the act is regarding companies, thus an individual is still liable under common law. Furthermore by charging the company in its own legal entity it is possible that the company is convicted even when no individual has ever been charged. Because the company itself is a fictitious being it can never serve any jail fines, in fact the only punishment a company itself will face is a fine [9] , however it may have to comply with remedial orders and publicity orders under the act. This can only lead to the criticism that despite the act coming into force it has still done nothing to help those families of the deceased who the duty of care was owed to as while compensation may make life more comfortable no one will have actually served time in prison for the death of their loved one. The argument in favour of the common law her is that of a company’s actus reus and mens rea, for a charge of corporate manslaughter or corporate homicide the company would have to hold beliefs and have an intention for people to die as a result of its actions thus giving the company its own legal personality and creating the problem of where an individual’s responsibilities end and the liability of the company begins. Richard Oastler, a 19th century reformer one said that “it would be a very good thing, instead of having fines as the punishment for breach of the law, to make it imprisonment and flogging and pillory” Many could still argue that this is still the case today.

Moreover, there are many problems with charging a company under the act especially as it is a fictitious being, this being said however if a company could not be charged with responsibilities under the law then also it would not be allowed any form of legal rights, such as the fact that a company can issue contracts and sue individuals. Furthermore a company may only be separate from the individuals that own it as long as its veil of incorporation remains intact. The law states that should there be enough probable cause then the veil of incorporation may be lifted on the company. This is evident in Moore v I Bresler Ltd. [10] where concerns over the fraudulent evasion of tax led to deception of both the Inland Revenue and the company itself. As such the veil of incorporation was lifted and as a result the senior officers were charged due to their acts being considered of that of the company itself. A further case came in the form of R v ICR Haulage Ltd. [11] where after the charge of conspiracy to defraud both the managing director and two of his employees were convicted, due to the veil of incorporation being lifted. The judge ruled however that in order to lift the veil “it must depend on the nature of the charge, the relative position of the officer or agent and other relevant facts and circumstances of the case.” This therefore shows that although the courts have the power to lift the veil, it is not a decision that they take lightly.

Other critics may say that the act was introduced simply as a political gesture after several high profile cases made their way through court. Clarkson (2005) claimed that the new law was “little more than a broadening out of the present identification doctrine” which in its own right was “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.” This therefore suggests that all the act does is simply shift the blame along to another person or being.

A further point considers the fact that since the change in the law, how often it has actually been used in court. In 2005 the Home Secretary [12] suggested that the Corporate Manslaughter and Corporate Homicide act “must be reserved for the very worst cases of management failure.” At the same time however Whyte (2005) predicted that there would be a paltry five prosecutions per year. Since April 2008 however there has yet to be a single conviction, thus leading to the argument that this may be a very low impact piece of legislation. On the other side of this however it could easily be argued that companies are just better organised so the need for a Corporate Manslaughter case may never arise, or possibly more probable that out of court settlements lead to both the families being compensated and the company keeping its name clear.

In addition to this it could be argued that the change in legislation actually benefits companies, for example it may be argued that in order to enforce the act collective culpability must be shown which in theory would benefit larger companies. The government counter criticised this in 2005 however by stating “it does mean that we have replaced the requirement to identify a single directing mind with a need to identify several.” This therefore helps to show that there should be no difference with regards to how a company is dealt with under the law regardless of its size.

One final argument is the fact that despite the amendment to the law being in place, in reality it does little difference than before the change. For example in 2000 the Confederation of British Industry argued that there is still room for individual scrutiny under the law that is unfair to the individual as “the inevitable position is that those individuals are to an extent going to be examined as if they themselves were on trial” this therefore shows that although the company itself can be tried as a separate legal entity, any individual involved in the company may still face all the questioning and cross examination as if they were at fault.

To conclude it can be seen that because of many high profile disasters the Corporate Manslaughter and Corporate Homicide act needed to be brought in, in order to ensure convictions of companies that were at fault. The argument is that can a fictitious being ever truly be accountable for the acts of an individual and of cause whether or not the current legislation actually goes far enough to prosecute those cases that make it to court. However it can well be argued that the act is a step in the right direction to making those who break the law accountable.

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