House of Commons - Work and Pensions

Select Committee on Work and Pensions Written Evidence

46. Memorandum submitted by CMS Cameron McKenna

CMS Cameron McKenna LLP is an international law firm headquartered in London, ranked in the top 10 in Europe. We advise businesses, financial institutions, governments and public sector bodies. The firm has a leading reputation in the UK in the area of health and safety law and has been involved in several major public inquiries and many fatal accident prosecutions.

THE NEED FOR REFORM

1. This proposed legislation is premised on there being widespread public concern at the lack of successful prosecutions of large companies, and there being strong support for reform in previous consultations. Both of these justifications should be looked at critically to ensure that new statutory offence targets valid concerns in the most effective manner.

2. It is unclear how the public concern has been measured, or that it is voiced by many truly representative groups. Our own survey, involving clients and contacts of the firm[16] gathered individual opinions on the Bill (as opposed to the "official" positions of their companies). It points to some support for reform in principle with 49.2% versus 40.1% of respondents considering that the Bill will promote better health and safety performance by companies. But 43.8% versus 39.7% felt that it did not provide a workable standard that distinguished serious cases from cases which should be dealt with as health and safety offences, and considerably more (71.6% versus 20%) believed it could have a negative impact in terms of encouraging risk averse behaviour and bureaucratic systems in businesses. It was the avowed intention of the government in this reform not to create a risk averse culture or stifle entrepreneurial activity[17].

3. Of the 150 formal responses to the Government's previous consultation in 2000, the majority apparently favoured the principle of the Bill[18]. If it was simply "ballot" counting that was relied on to reach this conclusion we would question the approach to a consultation like this. Although there are exceptions, businesses on the whole do not take a public stance on this issue and prefer instead to channel their formal positions through their trade associations or bodies such as the CBI. It is understandable that there will be many more submissions from diverse sources including trade unions, pressure groups and concerned individuals, expressing their own opinions. If our survey is anything to go by individual opinion is rather more cautious about reform than appears from counting the formal responses to consultations.

4. There can be no doubt that the common law offence of involuntary manslaughter has developed in a way that would now benefit from the clarity of codification. However, the proponents of a new corporate manslaughter offence appear to overlook the fact that the problematic doctrine of identification is not unique to manslaughter law and is of general application to other criminal offences involving corporations. It is unsatisfactory that corporate manslaughter should be subject of piecemeal reform.

5. Whatever the merits or demerits of the identification theory it does at least serve the useful function of balancing the very unspecific and circular nature of the test of gross negligence as set out in R v Adomoko. It probably does operate too restrictively and needs modification, but the linking of the current offence with a "directing mind" does mean that it homes in on the most fundamental management failures and at the highest level of a company. The acid test for successful reform of the law is whether it maintains this focus on failure at the core of safety management.

6. The proposed Bill seeks to retain a "senior management" element of the offence and that is welcome, but is not yet sufficiently clear or certain in its application to the potentially very wide range of management structures that are encountered in modern business. It will—as the Consultation Document frankly acknowledges—apply quite differently to large and small organisations, and that is an undesirable feature of the existing law. Coupled with the failure to eliminate elements of circularity in the test of "gross negligence" we suggest that the Bill is missing an important opportunity to introduce more clarity into the offence of corporate manslaughter.

7. There also seems to be an assumption underlying the campaigns for reform that the UK has a poor record in terms of fatal accidents due to the conduct of companies. As can be seen from figure 1, work related fatal accidents have been in steady decline, although regrettably there has been a levelling out in improvement in recent years and achieving further improvements presents a major challenge. It is far from clear that the Revitalising Health and Safety programme (already struggling to achieve its targets) will be assisted by a Bill which does not have the widespread support of business.

Figure 1

Source: H&S Statistics Highlights 2003/04, HSE

8. In contrast with the rest of Europe, the UK has notably low incidents of fatal accidents among the workforce. This is demonstrated by data accumulated by EuroStat shown in figure 2. (The UK rate is also better than that of the US)[19].

Figure 2

Source: Eurostat E3/ESAW

9. We would hope to see, as part of the evaluation of the reform, a fuller examination of how differences in enforcement approach, corporate and personal liabilities impact on the performance of different countries. For instance, France has corporate homicide prosecutions (as well as individual prosecutions) for work related deaths, yet it has double the UK's fatal accident incidence rate. What are the implications of this?

THE PURPOSE OF AN OFFENCE

10. Much of the discussion of these proposals, including contributions by a number of influential players, [20]asserts boldly that there will be a deterrent effect from increased use of corporate manslaughter against organisations which fail to meet proper standards. Again, the assumption needs to be questioned.

11. There is a notable dearth of evidence supporting the deterrent effect in individual offending generally, and in the health and safety sphere for companies in particular[21]. We question whether deterrence can operate at all at the level of inadvertence and unconscious risk taking which is the typical characteristic of work place accidents. Claims about deterrent effect beg serious questions about the individual and collective behaviour of individuals in large organisations. There seems to be a confusion here with the issue of pursuing "compliance" strategies, which are conceptually quite distinct from deterrence and form part of complex regulatory structures (like that of the HSWA). Even more questionable is how there can be a "marginal deterrent" effect from an offence which carries the same unlimited maximum fine as a serious health and safety offence[22]. Certainly no evidence has been put forward to help understand how such an effect would work, or what other (less desirable) consequences might also arise.

12. Our survey indicated that a large majority felt that the Bill could encourage risk averse behaviour and bureaucratic systems. We suggest that there is a potential—but not well-understood—behavioural impact (distinct from deterrence) that could come into play if corporate manslaughter offences are more widely used. It was certainly perceived by survey respondents that there could be a more negative effect than the RIA which has been carried out in connection with the Bill might suggest.

13. The government should consider the opportunity to look more deeply into the issues of efficacy of compliance strategies, and specifically the range of potential sentencing powers in cases involving companies. It is well recognised that with large companies very substantial fines which are proportionate to their size and profitability affect mainly shareholders who will very often be unconnected with the running of the business, or small investors indirectly linked through pensions and insurance funds. With smaller companies the impact of a significant penalty can be very damaging to the business and employees. The time is right for a more imaginative look at sentencing powers which, we suggest, would have a much more important and beneficial impact than this Bill which is (according to the RIA) only aimed at approximately five additional offences per year.

14. Another potentially adverse consequence of the Bill is the prospect that managers in industries with higher risks inherent in their operations could be put off from accepting positions of responsibility, particularly ones involving health and safety accountability. Any such effect is extremely hard to measure, but a slight majority of our survey respondents (42.1% versus 41.5%) felt that some industries could struggle to attract top level managerial talent in the face of corporate manslaughter prosecutions. It was felt that construction, oil and gas and manufacturing could be particularly affected. If this is representative of more widely held views in industry, it suggests that those sectors which undeniably need the greatest injection of commitment to health and safety from talented individuals at the highest levels could be disproportionately affected by the impact of more prosecutions.

GROSS BREACH

15. Our survey indicated some dissatisfaction with gross breach of duty as the test for liability. 47% versus 43.3% favoured instead an offence based on failure to address risks which were or should have been obvious to the defendant. This is a formulation that Law Commission in 1996 recommended for an individual offence of "reckless killing" and it is perhaps unsurprising that most people intuitively seemed to favour a formulation that imports notions of reckless disregard for the safety of others for the corporate offence.

16. The "gross breach" requirements in the Bill would continue to be a circular test of liability, albeit less obviously so than the R v Adomoko formulation. Almost by definition conduct causing death could be said to be conduct which "falls far below what can be reasonably expected" if one judges it by reference to consequences. There is nothing to prevent the jury from drawing such an inference, particularly when under Clause 3 (2) the jury would not be bound to consider any particular standard or benchmark in reaching its conclusions. [23]

APPLICATION OF THE OFFENCE

17. Our survey indicated overwhelming support from respondents (97.2%) for public bodies to be accountable in the courts in the same way as the private sector. We do not think that the argument made in the Consultation Document (to the effect that the Crown and other public bodies should be primarily accountable through parliament and other non-judicial processes) is in tune with public opinion, nor is it consistent with the jurisprudential approach taken in the Bill that liability for the offence would be rooted in duties of care in negligence. Under the civil law the courts have regularly had to address the question of whether public bodies have a duty of care (or perhaps more precisely whether the duty of care should be circumscribed by public policy considerations) and there is no reason in principle why any public body should be in a different position when it comes to consideration of its duties in terms of the offence of corporate manslaughter[24].

18. We recognise the considerable difficulties of applying a new law of corporate manslaughter to non-corporate organisations. However, in principle we believe any new offence should apply broadly to "undertakings" so that they can be prosecuted in the capacity of the undertaking (rather than proceedings being brought against their individual members or partners who might have no personal connection with the breach of duty).

DIRECTORS OFFENCES ETC

19. We strongly support that Government's decisions not to pursue its earlier proposals for ancillary offences against directors, managers and related corporate entities of defendant company. As regards the individual offences, nothing could be more calculated to undermine efforts of the HSC and others to gain recognition of health and safety as an important issue and support from individual managers (particularly managers at the most senior levels) for closer involvement in health and safety matters. Further, any form of ancillary offence which enabled an individual (or related company) to be convicted without having themselves being proved guilty of a gross breach of duty causing death (or whatever else the main offence consists of) would be manifestly unfair and would raise serious issues under human rights legislation.

INVESTIGATION OF A PROSECUTION

20. We support the position that the offence should be primarily the responsibility of the police and the CPS. We would share the many concerns already expressed if there were not a requirement for proceedings to require the consent of the DPP before being instituted.

UK PERSPECTIVE

21. It is regrettable that there is a separate process underway to review the law in Scotland. The Scottish law of culpable homicide for companies is already different to that of England and Wales. The Government should endeavour to promote a consistent UK-wide reform.

INTERPRETATIONS POINTS

22. Please see Appendix 1 for some more detailed observations on the wording of the Bill.

17 June 2005

APPENDIX 1

INTERPRETATION ISSUES WITH THE DRAFT BILL

1. On the face of it the prosecution would have to prove that a person's death had been caused by the "way in which the organisation's activities were managed or organised. . .". However, in situations where there is any duty of care owed to the deceased, when the defendant has caused the death it will usually be self-evident that this has not been prevented by the defendant's management or organisation. H&S prosecutions are routinely brought on this basis.

2. The wording of the offence in the Bill is not apt to deal with what are, in virtually all work related fatality cases, acts of omission rather than commission. It too readily enables prosecutors to allege measures which, with hindsight, could have been prevented the circumstances of the accident arising, which then would force defendants to rebut these allegations. The Bill, we suggest, needs to be re-cast in terms that reflect public opprobrium for omissions to address and control serious risks which should have been obvious, and not simply omissions which fall within the scope of the civil law of negligence.

3. We consider that it is helpful that the offence would be linked to failures at senior management level, and that this would not necessarily showing an individual was at fault. However, it is apparent from the detailed explanation of the provision in the Consultation Document[25] that this is potentially a very difficult test to apply in practice. It is also likely to require very substantial judicial elaboration in the direction of juries which is most unsatisfactory in an offence of this gravity. Judging from the explanation in paragraph 30 of the Consultation Document an offence structured in this way would continue to have an impact predominately on the smaller companies. The wording should be clearer that the offence concerns only failures by those who are the principal decision-makers for a corporation. [26]

4. Clause 3(2)(a) seems to merely re-state the issue of grossness. It is also unsatisfactory that the jury are not required to give any weight to the absence of the factors in Clause 3(2)(b)—they could apparently choose to disregard such absence and still be entitled to convict.

5. Clause 3(2) also focuses too exclusively on HSWA criteria, when the "relevant duty of care" extends widely into other areas such as product safety and transport.

6. References to "HSE guidance" in Clause 3 are unfortunate: the HSE is required to state in its guidance that it does not have the force of law[27], and juries should not be confused into thinking that it somehow does have that status.

APPENDIX 2

SURVEY CONDUCTED BY EMAIL BETWEEN 19 MAY-15 JUNE 2005. 320 RESPONDENTS COMPLETED A WEB-BASED QUESTIONNAIRE.

Do you believe this is a workable standard that will clearly differentiate criminal cases of the utmost seriousness from cases which should be prosecuted as offences under health and safety legislation?

What do you consider to be the most appropriate basis for definition of liability for a corporate manslaughter offence?

Do you believe the proposed new offence of Corporate Manslaughter will promote better health and safety performance by companies?

Do you believe the proposed new offence could encourage risk averse behaviour and bureaucratic systems?

Will those top industries which are traditionally exposed to health and safety issues struggle to attract top-level managerial talent in the face of corporate manslaughter prosecutions?