Corporate Manslaughter and Corporate Homicide Bill

My Lords, to legislate on criminal liability for causing death is profoundly serious parliamentary business. That we should be doing so in the context of companies being held liable for causing death introduces novel concepts into our law. Those considerations of corporate manslaughter and their novelty led the Law Commission in 1996 to lay the foundations of the Bill. It produced its report in the light of all those terrible disasters of the 1980s: the ““Herald of Free Enterprise””, Piper Alpha, the Clapham rail crash, King’s Cross, and so on. Each of those disasters had a profound public impact, raising a public question. How can it be that such events can occur and be found to have occurred as the result of the grossest of negligence and yet no one suffers a criminal penalty? The public will therefore look at this legislation not only for its content but for its effect in time to come. When the Government introduced their consultation paper in 2000 and said that this area of the law needed radical reform, they were right. The Bill seeks to achieve that. Although some noble Lords have many concerns regarding deaths in custody and the like, the thrust of this legislative change affects the workplace, transport, premises and, unhappily, as the noble Lord, Lord Whitty, indicated, the environment. This is not going to go away. I therefore invite your Lordships to consider two major aspects to this legislation—the scope of the offence and the means of enforcement—to determine whether we can make the Bill as effective as the public would want it to be. First, on the scope of the offence, my noble friend the Minister said that she wanted this legislation to introduce a clear and effective definition of the offence of corporate manslaughter, and to do so in respect of a company, not individuals. I agree, as did the Law Commission, that the target should be the company. I say to my noble friends on these Benches who are concerned about that: let us not forget that it is still open for directors and company servants to be prosecuted under the Health and Safety at Work etc. Act regardless of any prosecution for corporate manslaughter. The Bill does not replace such prosecutions under the Health and Safety at Work etc. Act; there may be occasions where both complement each other. I raise the following thought. As a company, you cannot insure for an insurance company to pay your fine for a criminal offence, but you can insure for legal advice and representation in proceedings in which you are prosecuted. Therefore, the Bill will receive exquisitely careful attention by lawyers acting for companies that have come into the firing line. The first target will be the question of the involvement of senior management. Clauses 1(3) and 4(1)(c) provide for an essential component of the offence. I will not go into the detail at this stage, but let us look to the reality. Ruth Lea, when head of policy at the Institute of Directors, said that if you try to identify an executive director on a board as the safety director, no one will take the job. We know from common experience, do we not, that safety in companies is completely designated and delegated down the line, away from the board? We should therefore ask in Committee whether we have properly identified sufficiently carefully the responsibility of senior management so that they cannot delegate down the line. Section 172 of the Companies Act just passed by Parliament creates new, positive duties for directors. I should have thought that one of those positive duties, in spirit if not in letter, is the safety of the company’s activities. Again, one notes that Section 18 of the Health Act 1999 provides that every chief officer of a National Health Service trust is required annually to certify publicly that effective systems operate in the trust for the care, monitoring and improvement of healthcare. I ask rhetorically: why should there not be the same for safety in the public arena? That is a point for consideration. My first point was on the scope of the offence and senior management. My second point is on company structures. Any observer of modern company life will see it as diffuse, geographically diverse and very difficult to track in terms of ownership of assets and key responsibilities. Most companies that have a parent structure will operate under a parent that farms out wherever it can risk business to a subsidiary. What happens when the subsidiary is prosecuted but the assets are held by the parent? We should investigate that in Committee. What happens to British workers abroad? If the management failure occurs in the United Kingdom but the harm or death occurs abroad to British workers, wherever they are, as I read the Bill, there is no liability. And yet an individual British citizen can be prosecuted for manslaughter in this country wherever he commits it. I turn now to the question of enforcement. A fine is a deterrent; remedial orders are a constructive process to avoid further harm. In passing a sentence of £15 million in fine, Lord Carloway, in a case in Scotland last year, said: ““The level of fine”” requires to, "““be such as will alert those operating undertakings on the scale existing here (and in particular their shareholders) that””—" the courts— "““do, and will continue to, regard breaches of””—" safety legislation— "““as extremely serious where they involve exposure of the public to death or serious injury on a long-standing and extensive basis””." That is a principled start. What, then, of the amount? Is it to be a percentage of annual profit or annual turnover? Is it to follow the Environment Agency’s route? As the years have gone by, it has produced tables that enable the courts to distinguish factors that go towards an increase or decrease of fine. These are very serious issues. The public will expect consistency in the imposition of fines. I turn to remedial orders. I regret that in Clause 9 the prosecution appears to be the vehicle for seekinga remedial order, which can be very wide in its application to safety systems. I regret not that it is the prosecution but that the prosecution appears to be limited to taking into account the advice of safety authorities such as the Health and Safety Executive. In a number of the disasters with which I have been involved—Paddington is an example—the Health and Safety Executive itself was sued for its long-term failure properly to regulate the activities of the rail companies. The prosecution should have a much wider remit to take outside expert advice and, if needs be, the opinions of trade unions and interested parties, even from the company’s side, in order to achieve effective remedial orders. Beyond that, surely a company that has an order imposed on it should report to its shareholders in the annual report the full circumstances of what it has done to remedy that which the courts said it should do. To conclude, we want a different corporate culture in safety. The day that this Bill becomes law, every decent company in the country will assess the following: its safety policy, its systems for safety and mismanagement, the adequacy of its monitoringand reporting chain on risk and safety, whether ithas regular audits—internal or, where necessary, independent—and, above all, how it reports to its shareholders. Safety cannot be compromised in order to cut costs in the public sector or to make profit in the private sector. This Bill should make a new start for safe company activities in this country, and in the public interest.