Taking the blame for disaster

If the government could ever be accused of dragging its feet over introducing legislation, a new law on corporate killing is a prime example.

The Law Commission recommended it in 1996 and it was a Labour manifesto commitment the year after, but it took until last month before Home Secretary David Blunkett finally revealed that he will be introducing a draft Bill in the autumn.

Mr Blunkett told Parliament that he made the move in response to 'great public concern' that companies were escaping punishment where their gross negligence had caused a death.

'The law needs to be clear and effective in order to secure public confidence and must bite properly on large corporations whose failure to set or maintain standards causes a death,' he insisted.

In fact, the current law does not bar a company from facing prosecution for manslaughter.

The starting point is to look at whether the death or deaths were caused by the gross negligence of an individual company officer or manager.

The individual directors can be imprisoned if convicted, and the company can also be convicted and fined if a guilty director was a 'controlling mind' within.

Both companies and individual officers can also be prosecuted and fined for 'ordinary' negligence under the Health and Safety at Work Act 1974 and individuals can face prison if the actions involved a breach of a prohibition or improvement notice, or a remedial order.

But these are rarely used mechanisms and have been invoked in just a handful of cases involving smaller companies where it is easy to identify who has a controlling mind.

Louise Christian - partner in London firm Christian Khan and one of the more vocal advocates of a law on corporate killing - has acted in such high-profile cases as the Southall and Potter's Bar rail crashes.

She says difficulty in pinpointing controlling individuals in the first place, combined with misinterpretation of how the causation test should be applied, has made existing provisions fall flat.

'The current problem is the reluctance to prosecute individual directors,' she says.

'It is not the case that a lot of prosecutions are brought and are unsuccessful - it is that not a lot are brought in the first place.'

No one is entirely sure what will be in the draft Bill when it comes out, although Mr Blunkett has made it clear that companies themselves will be targeted as opposed to individual directors.

Commentators are predicting that the Bill is likely to be in line with the Law Commission's proposals, which recommended a specific offence of corporate killing, broadly comparable to killing by gross carelessness on the part of an individual.

It suggested that companies as a whole should be liable for deaths resulting from management failure that constitutes conduct falling far below what can reasonably be expected of the corporation in the circumstances.

Professor Gary Slapper, director of law at the Open University, says the new law may bring the benefit of branding as a serious crime something that he argues has not been viewed that way before.

'It is to be hoped not that the law puts lots of directors in jail or that companies are put out of business, but rather that the new law chastens corporate officers everywhere into being suitably cautious when it comes to citizen and employee safety,' he says.

But Ms Christian is cynical about the government's motives.

'The problem is that the government appears to have set its face against doing anything to make directors responsible, and we get the feeling that by announcing this Bill they are just trying to take the heat off individuals,' she says.

'It is a kind of rebranding of the Health and Safety at Work Act, renaming it as corporate killing, where all that happens is the company is fined.'

Ms Christian says one problem facing government is public reluctance to see individuals jailed for corporate manslaughter, but she is convinced that there is a way around this.

'I do think it needs to be allied with measures allowing the prosecution of individual directors,' she says.

'There should be duties on directors to be responsible for health and safety; currently the only duty seems to be to make a profit.

I would like to see prosecutions of company directors with a wider range of penalties, much as there are for insolvent trading, for example.'

In fact, solicitors from all side of the debate are predicting that unless the Bill targets individuals, the new law could have little impact in practice.

The Association of Personal Injury Lawyers (APIL) is backing the draft Bill in the hope that it will address the fact that it is almost impossible to prosecute companies successfully.

However, a spokeswoman says: 'We are still very concerned that if no individual company director is to be made legally responsible for health and safety issues, there will be no real incentive for companies to make necessary improvements to their safety systems.'

Ian Fletcher, head of business crime at London firm Russell Jones & Walker, also takes the view that without holding individuals accountable, little will change.

'This proposed offence does not seem to me to add a great deal to the current health and safety law and penalties,' he says.

'Certainly companies and undertakings will wish to avoid being labelled as "corporate killers" and this will no doubt concentrate minds - but in reality, as far as corporations are concerned, the new law will not add significantly to current legislation.'

However, Mr Fletcher suggests that the stigma attached to being prosecuted for the new offence means that it is a fitting time for businesses to look again at the way they carry out their activities.

'Whatever the details of the forthcoming law, all organisations need to review their compliance with health and safety law and the principles of good corporate governance, and to invest in preventative measures rather than risk facing a serious and high-profile prosecution.'

Meanwhile, the Forum of Insurance Lawyers is pleased to see that individual directors are unlikely to be targeted.

'The government seems to have considered the negative impact that prosecuting individual directors would have,' says vice-president Claire McKinney.

'After all, who would be brave enough to take on responsibility for health and safety in companies and organisations now, when it could lead to personal prosecution if all did not go well?'

Not everyone is convinced that the new law will be fair on companies, though.

Clive Fletcher-Wood, a partner with Bristol firm Burges Salmon, represented Great Western Trains when the Court of Appeal supported the trial judge's dismissal of the corporate manslaughter charges brought against the company after the Southall railway accident in 1997.

He argues that the new law would create a grossly unfair discrepancy in penalties.

A responsible company found liable for a freak accident that kills people would face harsher punishment and a great degree of stigma than one that has constantly taken big risks but only resulted in injuring people.

'I am a citizen and I want to be able to go about my life safely, I am a parent and I want my children to be able to go about their lives in safety,' he says.

'But I also want a level playing field, and you are not going to get that with a law of consequences.

The consequences can be random - for example, in the case of a rail crash, it can depend on where people were sitting in the train.

We need to ask ourselves whether we should have a law of lottery, or whether culpability should be based on the risks that were taken.'

Mr Fletcher-Wood is concerned that if the government bases its proposals on the Law Commission's report, it will make his job a legal minefield.

'The report suggests that it needn't be necessary for the risk to be foreseen or for the defendant to be capable of foreseeing the risk,' he says.

'How am I supposed to explain to my clients that even if they can't foresee a particular risk, they could still be liable to be convicted of corporate killing?'

Mr Fletcher-Wood fears that multiple investigations will also cause problems.

Companies and their staff will be open to investigation by both the police and other bodies charged with the role; in many cases this will mean the Health and Safety Executive (HSE).

However, for accidents that occur in offices, it will be local authorities that are responsible for investigations, and there is no protocol between the police and councils to govern how this will work.

Mr Fletcher-Wood is ultimately concerned that the new law could make individuals within companies reluctant to take risks if the new law does not bar private prosecutions.

'If you have the real possibility of private prosecutions, you will potentially see industry becoming more risk averse because it could become more dangerous to make decisions.

Nobody will want to take responsibility for making the decisions, so you may end up with a less safe situation because managers avoid it.'

Meanwhile, Professor Slapper argues that the government must also consider other practical and economic effects of the new law.

He wonders in particular how the 'appallingly under-funded' HSE will cope.

'The HSE only investigates one out of ten serious accidents at work,' he says.

'The resources required to prosecute a big company for manslaughter are considerable.

So, however good the new statute is on paper, its effectiveness in reducing homicidal corporate conduct is probably quite limited.'

This is something for the government to consider between now and the autumn, and many lawyers are hoping it will get on with the job in hand.

'APIL members are constantly seeing appalling accidents in which people are killed through a company's negligence, and any further delays in introducing a new law means bereaved people will be left waiting even longer for justice,' the APIL spokeswoman says.

Speculation will now be growing over about what the flesh and bones of the new law will be, as this could change the legal landscape in personal injury and company law profoundly - or not at all.

'The proposals are vague in many key respects - when the Bill will be introduced, how it will be framed and the way liability will work,' says Professor Slapper.

'It seems like the brunt of the 1996 Law Commission report will be implemented eventually but the devil is, as always, in the detail - and that remains to be seen.'