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Agriculture is another sector in which I used to have responsibility and where the number of incidents is too high. In that case a corporation is rarely at fault. Again, an attitude of corner-cutting and general sloppiness within the industry needs to be addressed. Other sectors come into this category. One that was recently drawn to my attention by the GMB was waste management, where subcontracting is involved and where the recent landfill regulations and other regulations regarding the disposal of waste have led to serious corner-cutting, cost-saving and accidents both in transportation and the handling of heavy and dangerous materials. I think I am right in saying that in a recent quarter there were five fatal accidents in the industry. Although it has a small number of employees, there is obviously very high
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It is therefore important that we take on board the point made by other speakers; namely, that while the offence of corporate manslaughter and the penalties in the Bill are important, it is also an important complementary approach to recognise in law the responsibility of directors. When we abandon—rightly, in my view—the need to identify the personal responsibility of a manager or director for the health and safety system that caused the incident and the death, we should not absolve the board of directors as a whole from the responsibility for setting the climate and priorities for the health and safety regime which operates in their areas. Therefore, I hope that the Government will give further thought to the suggestion put forward by the Joint Select Committee regarding secondary liability for directors in these circumstances.
On exclusions from the measure, I shall not repeat what was said on prisons, and expressed much more eloquently, by the noble Baroness, Lady Stern, and the noble Lord, Lord Ramsbotham. However, there are issues in that regard. I am also a little concerned that the Bill appears to exclude all non-incorporated bodies when some substantial non-incorporated bodies employ people and have a duty of care to people on their premises or to their patients or clients. I am not sure whether the Government are minded to include those organisations through amendments to the Bill or in an extension of the legislation.
On penalties, the reference to an unlimited fine is not unique: it has appeared before. It would be interesting to hear the Minister respond to the point that I believe was raised by my noble friend Lord Rosser on whether an unlimited fine in this context means anything different from what it means vis-Ã -vis the Health and Safety Executive’s ability to prosecute health and safety offences. Under previous legislation, fines for these offences have in most cases been relatively low. As my noble friend said, small employers have largely been hit by this. Therefore, the question of means comes in. Nevertheless, it is important to recognise that if larger corporations are subject to such penalties, unlimited fines should mean what it says. I am not sure whether there should be gradation of fines in those circumstances. Clearly, the degree of responsibility will vary.
While I was fascinated by what the noble Lord, Lord James, said, I am not sure that I entirely agreed with what appeared to be his conclusion; namely, that if there was a clear financial incentive to adopt the procedure that caused the death of an employee or somebody else, it would be a more serious offence—akin to murder—than the offence of causing a death through general sloppiness. The result is the same and in a sense the responsibility is the same. If general sloppiness is the culture of the organisation concerned, the death is caused by those who set that tone and those priorities.
I accept that there may have to be guidelines in the gradation of penalty and that alternative or escalating penalties will need to be considered. The issues of
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With those qualifications and questions to the Government, I very much welcome the Bill. I hope that there will be room for some improvement or at least for discussion. As for directors’ responsibilities, I hope the Government will recognise, either in this Bill or in another way, that that is another dimension and another gap in the health and safety regime that needs to be rectified. Workers and those who use the services of corporations will be somewhat more protected as a result of the Bill’s passage into law. I congratulate the Government on reaching this point.
2.31 pm
Lord Brennan: 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
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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
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- “be such as will alert those operating undertakings on the scale existing here (and in particular their shareholders) that”—
- “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 seeking a 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 monitoring and reporting chain on risk and safety, whether it has 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.
2.43 pm
Baroness Turner of Camden: My Lords, I am very glad indeed that we now have this Bill before the House. I should declare an interest: I am a member of Amicus and I was, for a number of years, assistant general-secretary of ASTMS, which was one of the founding unions of Amicus.
The Minister will of course be aware that the trade union movement has been seeking such legislation for a very long time. Concern over the inadequacy of the
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I particularly remember the Piper Alpha oil rig disaster because members of my union were involved in it. I remember at that time that, with the assistance of my noble friend Lord Wedderburn of Charlton, I introduced a Private Member’s Bill into this House with the aim of protecting the jobs of whistleblowers who detected unsafe working conditions on oil rigs and were too intimidated by the prospect of job loss to report on them. We managed to get agreement to that Bill and eventually it became law. But that only dealt with one aspect.
Although there have been successful prosecutions for manslaughter against companies, they have, as has already been said, all involved small companies in which the directing mind has been easy to identify. It has been virtually impossible to satisfy the current legal criteria with large companies. The present Bill is therefore welcomed by trade unions but, nevertheless, they seek what they regard as necessary improvements in the Bill in order to make it more effective. An amendment may therefore be sought to introduce a new clause entitled “Offence by senior manager”. That would mean that a director or senior manager could be found guilty of an offence if they were found to be responsible for the corporate manslaughter. Unless there are individual sanctions against directors or senior managers, there is little chance of this Bill changing the health and safety behaviour of directors and improving the management of health and safety at work. There is also a case for specific health and safety duties to be placed on directors and senior managers. This may well require an addition to the Health and Safety at Work etc. Act.
It has always seemed strange to me—and to others who have spoken in this debate—that severe penalties can be imposed on directors for financial malpractice but that there is no specific duty of care for the health, welfare and safety of the company’s workforce. I hope that during discussion of this Bill steps can be taken to deal with that anomaly.
There is also a need to include a provision in regard to a director or senior manager who is found guilty of aiding or abetting the commission of an offence of corporate manslaughter. That should carry a prison sentence, as indeed should the original offence. The unions want to see effective “naming and shaming” not just in the accounts or at Companies House. There should be disqualification of directors who are responsible for deaths. Further, it is proposed that effective orders should be made by the court that has heard the evidence to deal with the corporate failings that led to the offence. Named persons should be required to improve the failings that led to the offence. There should be a report back to the court on the steps taken, with any person referred to in any order as being responsible for the specified steps being guilty of contempt if those specified steps have not been taken.
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There may also be a case for the inclusion of a clause dealing with the public interest, perhaps empowering the court to make public details of the offence, the sentence imposed and the steps to be taken to prevent a recurrence.
It will be seen from these suggestions that, while the Bill is broadly welcomed by those with a major interest in the welfare of workforces, the unions are anxious to ensure that the legislation has sufficient teeth to make it effective. It may very well be that the Government themselves have some tightening up in mind. My information is that Ministers have been very willing to discuss these matters.
I await with interest the Minister's response before deciding whether to frame some amendments in line with the suggestions that have been made in this debate. Again, I emphasise that we welcome the Bill and we want to see it on the statute book. We want to ensure that it is as effective as we can possibly make it. We have waited very long for it and we therefore want to make it as effective as it possibly can be. I welcome it and thank the Minister for the way in which she introduced it. We look forward to having it on the statute book.
2.48 pm
Lord Boyd of Duncansby: My Lords, this Friday, 22 December, sees the seventh anniversary of the deaths of the Findlay family, from Larkhall in Lanarkshire. The family was made up of Andrew and Janette, and their two children, Stacey, who was then 13, and Daryl, who was 11. There will be many in Scotland who will see today’s debate as a timely tribute to them and to those in Scotland who have campaigned for a change in the law. I hope that noble Lords will forgive me if I address the issue before us on the basis of the law in Scotland and that some of the principles that I address are common also to England and Wales.
Following a full investigation, it was ascertained that the explosion was due to gas leaking from a corroding pipe into the family bungalow. As a result of that gas leak, an explosion occurred, which devastated the house and killed the occupants. Transco, which, with its predecessors, was responsible for the maintenance of the pipe, was indicted in the High Court of Justiciary on a common-law charge of culpable homicide and on contraventions of Sections 3 and 33 of the Health and Safety at Work etc. Act. Transco took a plea to the competency and relevancy of the charge of culpable homicide. At first, that plea was repelled but, on appeal, the plea to the relevancy of the charge of culpable homicide was upheld.
Three important things emerged in the judgment of the Appeal Court. The first was that, in common law in Scotland, it is competent to charge a corporation with culpable homicide. Secondly, however, in order to make a relevant charge, the prosecution must be able to identify a controlling mind with the necessary mens rea, as we call it in Scotland, or criminal intent, which one can attribute to the company. Thirdly, it is not permissible to aggregate the states of mind of various individuals who may, at one time or another, have been the controlling mind of the company—at least, in relation to the activities that gave rise to the death.
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As it was conceded by representatives of the Crown that they could not point to a single individual with a controlling mind attributable to the company, the charge of culpable homicide was held to be not relevant. Transco was subsequently prosecuted on contraventions of Sections 3 and 33 of the Health and Safety at Work etc. Act and, after a lengthy trial, was found unanimously guilty. I say to the noble Earl, Lord Mar and Kellie, that I do not think that there is any difficulty in juries bringing a guilty verdict to corporations or corporate bodies where the evidence clearly points to that effect, which of course was true in the Transco case. As we heard from my noble friend Lord Brennan, the fine imposed was £15 million—a record which still stands in the United Kingdom for breaches of the Health and Safety at Work etc. Act. To put it into context, I understand that the fine in the Ladbroke Grove case was about £2.5 million, which, at that stage, was the highest ever levied in the United Kingdom.
In addition to the points made by my noble friend Lord Brennan, I mention that, in passing judgment, Lord Carloway commented that Transco had shown no remorse. It would be entirely wrong to speculate about what might have happened had Transco been prosecuted for culpable homicide, but it is legitimate to look at the judgment and the case and to ask what lessons can be learnt and whether there is any guidance for the legislature.
The first question to ask is whether, given the level of fine imposed against Transco, it is necessary to create a new offence of corporate homicide when the available financial penalties are the same. Lord Osborne made that point in the judgment in the Court of Appeal, observing that the financial penalties on conviction of an offence under the Health and Safety at Work etc. Act were unlimited. He said:
“It might be thought that the availability of such penalties on conviction would provide sufficient powers for a court to do justice in a case such as the present one. If, however, Parliament considers that a corporate body, in circumstances such as the present, should be subjected, not only to potentially unlimited financial penalties, but also to the opprobrium attaching to a conviction for culpable homicide, then it must legislate”.
In my submission, it is important to note that the Health and Safety at Work etc. Act does not distinguish between offences which cause death at work and those which do not. Although that may not be surprising in the context of the purpose of the health and safety at work legislation, many people consider that, where death has resulted from a gross breach of a duty of care, it should be specifically marked by the justice system with an appropriate conviction.
Cathy Jamieson, the Minister for Justice in Scotland, established an expert group to look at the development of the law in Scotland on this issue. It pointed to research that showed that companies are shameable. Indeed, they care about their reputation. Many have high ethical standards, or, at least, they claim to do so, and they are willing to spend a lot of money—sometimes disproportionately so in relation to the possible fine to which they might be subjected—in defending prosecutions. I suggest that
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