Corporate Manslaughter and Corporate Homicide Bill

I welcome the amendment for several reasons. I shall take as an example the construction industry. It often operates through companies which have subsidiaries with given tasks. One may be employment; another, provision of equipment; and another, transport. An offence which falls to be considered under this Bill may occur in circumstances where the first line of attack by the prosecution is the employment company, which may have no assets of any consequence: it simply exists to receive money from its parent company and pay wages. In those circumstances, very serious offences might call for very substantial fines which that company simply may not be capable of paying. One can imagine a situation—I have had a case in which it has occurred—in which a subsidiary operated a grossly unsafe system of work and the parent company, which knew about it because the safety officer in the subsidiary company had complained about it but which had nevertheless let the company operate that system, refused its request for funding to introduce a safety system. The holding company was the arbiter of whether the offence had occurred. On penalties, if under Clause 1(6) an unlimited fine can be imposed, remedial orders may be made under Clause 9 which involve considerable expenditure. It may well be the case that the parent company simply will not carry it out in economic terms. If a prosecution has taken 18 months to two years to reach court, by the time it gets to a conviction and sentence, that company may simply be a shell, and the owners, the holding company, may quite legally have reconstructed the company, provided, under the Insolvency Acts, they have not done so deliberately to avoid the penalty. In a practical way, this amendment must consider those circumstances. Internationally, there are many arguments about whether, in the law of tort, parent companies can, in certain circumstances, be regarded as being liable for the negligence of their subsidiary. The Union Carbide case in India was a famous example. There are theories about unified economic units, no control by the subsidiary and no effective decision-making on its own behalf which might determine a potential finding of liability in tort, but that is by no means a clear expression of our law. The duty of care, which is the foundation of this statute in terms of potential liability, is not necessarily going to be ascribed to any parent company, even though it may ultimately be, at least morally, very much to blame and, under this amendment, criminally to blame. The terms of this amendment may require careful consideration. However, choosing my words advisedly, it would be an outrage if a parent company could so operate its subsidiaries as to cause corporate manslaughter and allow itself, as an economic unit, to escape the financial consequences.