Corporate killing - proposed reforms and recent case law

Recent high-profile cases have increased pressure for a new Corporate Killing offence. It is currently difficult to convict large organisations of manslaughter. How might this change?

Background

The announcement by the Crown Prosecution Service (CPS) in October 2001 indicating that there would be no manslaughter proceedings following the Ladbroke Grove rail crash, brought with it widespread criticism. It led to renewed debate on the adequacy of health and safety convictions as a means of punishing offences of negligence resulting in deaths and in particular the accountability of corporations and the individuals who control them. This debate has been re-ignited by each subsequent delay in the new corporate killing offence outlined below and more recently by the dropping of manslaughter charges against Railtrack in relation to the Hatfield rail crash.

Shortly after the Ladbroke Grove decision Euromin Limited was fined £50,000 for health and safety offences after the death of a casual labourer, caused by the company's operation of an excavator unloading cargo from a ship. Both the company and its general manager, were acquitted of the manslaughter charges brought against them. Following the acquittal the Director of Public Prosecutions (DPP) criticised the current law and called for reform by the introduction of a new Corporate Killing offence. The existing law is considered by both the government and the CPS as making it much more difficult to secure convictions of large organisations in which there are several tiers of management. In contrast, where charges are brought against smaller companies that are run on a day to day basis by their directors, the offence is easier to prove.

The current law

Manslaughter committed by a corporation was first formally recognised as an offence following a ruling in the Zeebrugge case. The development of the offence since that time has however been slow. Since then the common law offence has been clarified in two key decisions in 2000 (A-G's Reference) (No 2 of 1999) and R v DPP, ex p. Jones. In the former case the Court of Appeal confirmed its earlier decisions that the doctrine of 'identification' was the correct basis for gross negligence manslaughter: requiring evidence of gross negligence personally by a 'controlling mind' – effectively a director – in causing a death. The latter decision confirmed that the test of whether the conduct in question was grossly negligent is an objective one and that accordingly, a director's lack of subjective negligence could not in itself provide an obstacle to a conviction.

The main hurdle to overcome when securing convictions is proving that death was caused by 'gross negligence'. The distinction between gross negligence, as opposed to just inadvertence, is not clearly defined. In recent years the courts have ruled that:

"The jury must consider whether the breach of duty should be characterised as gross negligence and therefore as a crime. This will depend on the seriousness of the breach of duty in all the circumstances in which the defendant was placed when it occurred. The jury will have to consider whether the extent to which the defendant's conduct departed from the proper standard of care incumbent upon him was such that it should be judged criminal."

Unfortunately this provides no indication of the degree of care to be expected. More importantly, it requires jurors, who may not have the necessary business or technical experience, to make judgments based on the evidence of hindsight about a complex series of events and this can lead to injustices. There have been numerous acquittals of directors and business owners because the courts have not been satisfied by evidence on whether negligence was gross and whether the prosecution had proved that such gross negligence was a substantial cause of death.

During 2002/2003, the police referred 37 cases of work-related death to the CPS in sectors where the Health and Safety Executive is the health and safety enforcing authority, to consider possible manslaughter charges. The CPS had so far started prosecutions for manslaughter in three of these cases. Since April 1992, a total of 253 possible manslaughter cases have been referred to the CPS. The CPS have brought prosecutions for manslaughter in 69 cases, 18 of which have resulted in convictions.1

Proposed reforms

In May 2000 the Home Office published proposals for a new statutory framework for the law of manslaughter, including the new Corporate Killing offence. See: www.homeoffice.gov.uk/consult/invams.pdf. The proposals suggested that "Corporate Killing" would apply to all organisations and would include the following elements:

• a 'management failure' of an 'undertaking' which is the cause, or one of the causes, of a person's death and
• the management failure would have to constitute 'conduct falling far below what can reasonably be expected' of the undertaking in the circumstances.

A management failure by an undertaking would occur if 'the way in which its activities are organised or managed fails to ensure the health and safety of persons employed in or affected by these activities'. Such a failure will be regarded as a cause of a person's death, even if the immediate cause is the act or omission of an individual. Therefore it would not be necessary for the prosecution to prove that the risk was obvious or that the defendant organisation was capable of appreciating the risk.

In relation to individuals in an organisation the proposals included two new manslaughter offences (killing by gross carelessness or reckless killing) as well as a further new offence where a person contributes substantially to an organisation committing a corporate offence. Criminal proceedings could also be brought under the new proposals where it can be shown that a parent or other group company's management failures were a cause of a death.

Following the consultation exercise, the Home Office sent a questionnaire to a number of organisations seeking comments on its regulatory impact assessment of the proposed reform. The notes with the questionnaire revealed that the government was no longer pursuing the proposed powers to disqualify individuals from acting in a management role and the idea of directors being liable when an undertaking is found guilty of Corporate Killing. It also appeared to be re-considering applying the offence of Corporate Killing to partnerships and other incorporated bodies.

In 2003 the Home Office indicated that further new proposals were expected towards the end of 2003 in which "Corporate Killing" would be re-formulated in a draft Parliamentary Bill, based possibly on a form of "aggravated breach" of Health and Safety at Work Act (HSWA) duties, rather than the notion of management failure. However, to date there have been no further announcements on any specific new proposals or the legislative timetable.

Caselaw update

Recent cases have shown that the difficulty in identifying an individual who is both the embodiment of the company and who is personally sufficiently culpable is a significant obstacle to convicting larger companies where structures and responsibilities for safety matters are not clear-cut and may not be assigned to any one individual. However, we believe that there is nevertheless scope for a large organisation to be convicted in a worst case scenario where cogent evidence exists that one or more of its board members had actual knowledge of specific failings which posed a grave risk, and that (looked at on an objective basis of a prudent director acting reasonably) inadequate effort had been made to carry out (or at least to instigate) corrective action.

Some recent manslaughter prosecutions have included the following cases:

R v Astin

A property developer, whose labourer was burned to death at a property development site in London was acquitted at the Old Bailey on 9 December 2003 of a manslaughter charge, but pleaded guilty to a breach of HSWA. He was fined £30,000 with £10,000 costs.

R v Peter Pell

At Nottingham Crown Court on 19 December 2003, a farm contractor was jailed for 12 months having pleaded guilty to the manslaughter of his employee, who was killed while cleaning chicken sheds on a farm in Nottinghamshire. The Defendant had removed every safety measure on the skid-steer vehicle on which his employee was found crushed. The Defendant had previously been fined £3,000 in October 1996 after the electrocution of an employee when his tipper truck came into contact with overhead power lines.

R v Ian Morris

The owner of a paint stripping factory was sentenced to 9 months imprisonment on 31 July 2003 at Birmingham Crown Court, after being found guilty of two counts of manslaughter, following the deaths of 2 workers who died from inhaling poisonous fumes. The defendant had already pleaded guilty to offences under the HSWA, the Control of Substances Hazardous to Health Regulations and the Management of Health and Safety at Work Regulations 1999 (MHSWR).

R v Martin Graves and Victor Coates

At Basildon Crown Court on 4 April 2003, a haulage company owner and one of his lorry drivers were each jailed for four years following a road accident in which an articulated lorry crashed into the back of a vehicle, killing the driver. The lorry driver had been working continuously for 20 hours without proper rest breaks and was suffering from sleep deprivation. The company owner was found guilty of manslaughter and the lorry driver was convicted of causing death by dangerous driving. Both men were also convicted of tachograph offences relating to falsifying records.

Hatfield Rail Crash

The Crown Prosecution Service announced on 9 July 2003 that companies Railtrack Plc and Balfour Beatty Plc and both current and former directors and managers of each would be charged with gross negligence manslaughter and offences involving a failure to discharge a duty under the HSWA, following the Hatfield trail crash in October 2000.

Four people died in the crash on 17 October 2000 and some 102 other passengers and staff suffered injuries of varying severity. Railtrack Plc, bought by Network Rail in October 2002, was responsible for the track at the time of the crash. Balfour Beatty Plc, Europe's largest track engineer, was contracted for repairs to the stretch of line involved. The prosecution has been in the news again when on 1 September 2004 the manslaughter charges against Network Rail Ltd and director Nicholas Pollard were dropped by the high court due to insufficient evidence. The court also dropped health and safety charges against Pollard, former Railtrack Plc Chief Executive Gerald Corbett and current Railtrack director Christopher Leah. This decision by the High Court has caused fresh calls for a new offence of reckless killing, or killing by gross carelessness, due to the difficulties of providing evidence of gross negligence personally by a 'controlling mind' of a large company.

However, the CPS has confirmed that nine other engineers and executives from Railtrack, now Network Rail, and Balfour Beatty, the rail maintenance group, would continue to face charges under the HSWA, in connection with the train crash. Balfour Beatty also still faces a charge of corporate manslaughter.

This will be a landmark case when (and indeed if) it comes to trial, involving as it does large companies and both current and former engineers and managers.

Minimising the risk of prosecution

Organisations (and their directors) wishing to minimise the risk of possible prosecution for the new offence need to strive to further improve their existing health and safety management arrangements. Particular attention should be given to the following:

• A defined Safety Management System based broadly on published principles such as those contained in the Health and Safety Executive's Guidance 'Successful Health and Safety Management' (HS (G) 65) and BS 8800.
• A Safety Policy which carefully defines high-level responsibilities of directors and other senior managers. This should be consistent with recommendations contained in the Health and Safety Commission (HSC) Guidelines on 'Directors' Responsibilities for Health and Safety'.
• Boards of Directors should consider the implications of the HSC's recent Guidelines on public reporting of organisations' health and safety performance, including accident and enforcement data. Internal reporting requirements for the board need to be aligned with these requirements because they provide an indication of the expectation of the degree of detail at which monitoring of the organisations' activities should be undertaken.
• Good quality training for Directors on the key elements of the legislation as well the main principles of safety management. (The Institution of Occupational Safety & Health (IOSH) accredits providers with an established track record to deliver its 'Safety for Senior Executives' course).
• Particular attention should be given to lessons that may be learned from accidents, near misses and reports of occupational ill-health. If directors have not ensured that any actions arising out of investigations have been followed up they and the organisation could be vulnerable to a charge of management failure.
• A legal compliance review can be undertaken. If carried out by an in-house legal department or external legal advisers it can be subject to legal professional privilege and therefore the report may not be disclosable to any investigating authority.
• Review existing policies for engaging contractors and providers of out-sourced services: the duty of care on employers and contractors are increasingly being interpreted strictly.
• Health and Safety due diligence should be carried out in all M&A transactions. This will assist in determining whether significant changes are required to corporate governance arrangements for safety and risk management.
• Check D&O and other insurance policies for the extent to which costs of criminal proceedings are covered, and whether the insured can appoint its chosen legal representatives.

For further information contact Kajal Sharma on +44 (0)20 7367 2751 or at [email protected] or Jessica Burt on +44 (0)20 7367 3589 or at [email protected]