Corporate Manslaughter and Corporate Homicide Bill

I am very grateful for the constructive tone of the discussion on this group of amendments. As that discussion has made clear, it is vital that the new offences are accompanied by sanctions that properly punish the convicted organisation and act as a significant and sufficient deterrent against future offending. The Bill already provides both punitive and rehabilitative sanctions. Organisations convicted of the new offence will be subject, as the noble Lord, Lord Hunt, said, to an unlimited fine and remedial orders. I shall deal with his points later. However, as the amendments make clear, some concern is still felt that the sanctions are insufficient, and I welcome the blue-skies thinking that has erupted since Mr Sutcliffe made his comments on 4 December. The suggestions are very helpful. The noble Lord, Lord Hunt, proposes that organisations which are convicted of the new offence should be obliged to publicise the fact of that conviction. The amendment of the noble Baroness, Lady Turner of Camden, would have a broadly similar effect, so I shall speak to the amendments together. Before doing so, I shall address the other amendment of the noble Lord, Lord Hunt, which proposes that any penalties imposed as a result of a conviction for the new offence should be notified to the relevant Registrar of Companies. On the face of it, it is an attractive proposition. The functions of the Registrar of Companies are to incorporate and dissolve limited companies, to store information about companies delivered under companies legislation, and to make this information available to the public. It is not, however, their function to register criminal convictions of any kind. To create this requirement would therefore raise the question of what other corporate offences should be held in this way and would potentially lead to a substantial change to the role of the registrar. I am not sure that the benefits of the proposal justify changes of that extent. In particular, I am concerned that the proposed sanction would not apply to all organisations which are capable of committing the new offence—there has been some discussion today about the breadth of organisations that the new offence will cover. Under the amendment as it is currently phrased, only limited companies would be registered at Companies House, but a much wider range of organisations such as local authorities, NHS trusts and government departments could be convicted of corporate manslaughter. It would be inequitable in those circumstances to create a sanction that could apply only to certain kinds of business. I am therefore not persuaded by the noble Lord’s interesting suggestion that changing the function of the Registrar of Companies is an appropriate way of dealing with the matter. However, I can see the benefits of requiring an organisation to advertise the fact of its conviction, as proposed by the other amendments in this group. The noble Lord, Lord Hunt, made a powerful point about reputation. It is certainly true that reputation is an important asset to many businesses—many businesses trade on reputation after all. In his recent review of regulatory penalties, Professor Macrory cited evidence which suggests that damage to an organisation’s reputation can have consequences for consumer confidence, market share and equity value. Public censure is therefore a sanction that organisations are likely to take very seriously. Interestingly, adverse publicity orders are already successfully used in other jurisdictions. As I understand it, courts in Canada can order an offending organisation to publicise, in a manner specified by them, the offence of which it is convicted, the sentence imposed, and any remedial action that it is taking. Adverse publicity orders have been adopted also in the United States and in a number of Australian jurisdictions. The Macrory review advocated that they should be developed for use in the UK courts. I can confirm that we are therefore giving careful thought to the possibility of including some sort of adverse publicity order in the Bill, along the lines of the Canadian model. A provision of this sort would enable the court to order the organisation to advertise the conviction, sanction and remedial action ordered in whatever publication seemed relevant. That could include annual reports, local media, trade publications or the national press, depending on the size of the organisation and the nature of the offence. This would be a novel sanction for UK courts. There would therefore need to be a clear framework within which the courts could operate it, so that judges would know exactly what the process for setting the order would be and how compliance would be monitored. We are continuing to give careful thought to the practicalities of making adverse publicity orders available and, although I can make no absolute commitments today, I hope that I have said enough to persuade the noble Lord and the noble Baroness, Lady Turner, that we have heard their concerns. On that basis, I trust that the noble Lord will withdraw the amendment. The noble Lord, Lord Hunt, raised some questions about fines, and I think it fair that I make a few observations on that issue. We have made it clear that it is vital that the sanctions for the offence properly punish the convicted organisation and act as a sufficient deterrent against reoffending. The provision for unlimited fines means that courts can target the punishment to the specific circumstances of the case. That is obviously the most important reason for having an unlimited fine. Guidelines will be issued by the Sentencing Guidelines Council to assist courts in exercising their power and authority. In general terms, the Government have been pleased to see that fines for health and safety offences are rising; they have, apparently, risen by 31 per cent since 2003, so courts are very seized of their significance. We have recently seen some very high fines in health and safety convictions; at Hatfield, Balfour Beatty was fined £7.5 million, Railtrack, £3.5 million and Transco £15 million. So I expect that we would see fines of that magnitude in cases of gross negligence, when the court has taken a very serious view of the offence and the conviction has been achieved. I have tried to make as positive a response as possible. We are considering carefully suggestions that have come forward and we hope to be able to say something much more positive about adverse publicity orders, because we see considerable merit in their operation and we have learnt quite a bit about them from other jurisdictions.