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Total suck up: Why it’s wrong to be kind to killer bosses
Dave Whyte is a member of Scotland’s expert group on corporate homicide. He thinks Labour’s draft corporate killing bill for England and Wales is an employer-driven cop out. Here he explains why.
In April 2005, shortly after the publication of the draft Corporate Manslaughter Bill for England and Wales (Hazards 90), a Scottish Executive Expert Group on Corporate Homicide was set up to consider whether these proposals were appropriate for Scotland. The group, comprising civil servants, academics, lawyers, STUC and business representation, was asked to propose a way forward on law reform and report to the Scottish justice minister.
Because we were determined to introduce a law that would be an effective deterrent, rather than the half-hearted business-friendly compromise that produced the Draft Bill in England and Wales, we decided to kick the government’s proposals into touch.
The academics and the trade union representatives on the Group argued that the ‘senior management’ test in this Draft Bill would simply replicate the current ‘identification principle’ which requires that a culpable individual must be identified as a precondition for a corporate prosecution.
We argued that the requirement in the Draft Bill - that companies can be prosecuted only after a group of senior managers has also been implicated in the offence - created complexity that would tie the hand of prosecutors. We also argued that without a tightening of the law on individual offending, directors and senior managers will be able to use the company as the alibi for their own negligence and culpability.
Our starting point was the more innovative and less business-friendly laws developed recently in Australia and Canada. Those countries had similar legal systems to ours and just as in Scotland, the common law offence of corporate killing was developed from English case law. Those countries have experienced exactly the same problems when this case law sought to incorporate corporate violence into a body of law designed to deal with cases of interpersonal violence.
There was considerable disagreement on the Group - the CBI representative was particularly obstreperous - but we did manage to produce a report that reflected the majority opinion of the members on each issue. The report was sent to the Scottish justice minister in November 2005 (1). In it we concluded that a new statutory offence of corporate killing should be introduced for organisations guilty of recklessness which results in the death of employees or members of the public. We were influenced by the ‘corporate culture’ model developed in Australia.
The basis for our proposed offence is that an organisation should be liable for this offence where it fails to put policies, practices and systems in place to ensure the health and safety of its employees and those affected by its activities. The group concluded that fault for the offence should move away from corporate liability resting on the identification of a culpable individual.
Instead, we argued, corporate liability should be based on the concept of management failure. Management failure is defined as allowing, or failing to take all reasonable steps to prevent, a corporate culture which encourages, tolerates or leads to an offence taking place.
This approach would impose an evidential burden on the organisation. The organisation would then have to make the case that it had acted with due diligence to prevent a criminal corporate culture taking root. If human rights objections - in human rights law, companies perversely have similar rights to natural persons - could be overcome, our preferred approach would be to reverse the burden of proof with the onus on the organisation to prove it had acted with due diligence.
In other words, if the organisation would not be held liable for the offence if it could can show that it complied with the law and that it had policies and procedures in place which should have prevented the death.
The group wanted to ensure that individual directors and senior managers could no longer use their organisations as a shield for committing crimes of violence. For this reason, we proposed that offences by individuals would be an essential component of an effective law. In order to achieve this we proposed two new offences.
First, we recommended the introduction of a new stand alone offence for culpable individuals acting with managerial authority who are directly responsible for the death of employees or members of the public. This would put the common law offence for individuals on a statutory footing and would mirror the standard of recklessness proposed for the corporate offence.
We also recommended the introduction of a secondary offence to allow individual directors or senior managers to be prosecuted when their actions or omissions significantly contributed to a corporate killing. This latter type of ‘aiding and abetting’ - in Scotland the terminology is ‘art and part’ - offence is on the statute books in Canada, but was ruled out explicitly in the government’s Draft Bill.
After a long argument in which the CBI again were particularly resistant, the group concluded on balance that the legislation should apply equally to deaths caused by Scottish organisations in other countries. We also proposed the introduction of a wide range of penalties including corporate probation, equity fines and community orders. Penalties for individuals should include disqualification from senior office in an organisation and imprisonment.
Finally, we argued that, unlike the exemptions introduced by the Draft Bill, the offence should apply to unincorporated bodies and should extend to all Crown bodies.
Both our report and the December 2005 House of Commons Select Committees report (2) (see below) highlighted a rarely contemplated aspect of law enforcement: The extent to which it manages to capture the whole problem of corporate killing. We concluded that “the new offence would cover any death caused by recklessness, whether that death results from an immediate injury or whether it is the outcome of a long-term industrial illness.”
This raises a major issue in relation to the scale of the crimes we are seeking to control. If we factor in other forms of long-term illness caused by working, the total number of people killed by work begins to multiply. The 24,000 deaths resulting from occupational cancers (Hazards 92) is only part of the full litany of deaths caused by working.
Each and every one of those deaths requires at the very least a preliminary investigation to establish whether or not there is grounds for a criminal prosecution. There is no legal obstacle to doing so, since any new law would by definition cover all deaths caused by working.
The obstacle to investigating the tens of thousands of deaths caused by work is largely down to resources. In order to adequately enforce a new law, no matter what form it takes, the HSE will require a massive budget increase. Yet on the Scottish Executive Group, the director of the HSE in Scotland pointed out that the HSE would not be requesting any more resources to get the job done!
At the same time, the HSE director consistently argued against the criminalisation of serious injuries in addition to deaths, presumably because it would mean an increase in HSE investigations and prosecutions. Because of the disagreement in the group, this issue was fudged in the report. The report vaguely concluded that “further consideration should be given” to the issue of injuries.
But the Scottish Executive Group’s reluctance to confront the issue of serious injuries head on does create a major legal anomaly. By criminalising deaths and not serious injuries, we are saying that corporate killing should be regarded as a crime of violence, but corporate maiming and injuring should not.
We cannot afford to be complacent about the scale of the task ahead. Even if a new law does not include the criminalisation of serious injuries, it will need to be accompanied by a massive shift in government resourcing of the HSE if all deaths at work are to be investigated as suspected crimes. This might seem like an impossible task, but government does have the means to support such a shift in resources. If we compare what we spend protecting people at work with current military expenditure for example, then we find that the estimated £5b spent on the invasion and occupation of Iraq is approximately 25 times the HSE’s annual spend.
If the money is there to pay for the war, then surely we can find a fraction of this funding to provide the HSE with the means to enforce the law. Making this argument at this moment in time is a daunting task in the face of the Better Regulation Bill and HSE resolutely refusing to demand adequate funding from government.
Neither should we underestimate the strength of the forces that are gathered in opposition to criminalisation. The corporate lobby represented by the CBI and the Institute of Directors, satisfied with the settlement they have won in the Draft Bill for England and Wales, will pull out all stops to avoid a more accountable and punitive law. We should expect nothing less. After all, it is their members who are in the frame (see below).
The CBI representative on the Scottish Executive Group trawled out the two oldest and least convincing arguments in the book: A tough law will provide a disincentive to the best directors; and companies will leave the country - the ‘myth of capital flight’ - if the risks of being caught are too high.
The sentiments of those arguments are distasteful to say the least. After all, which decent society would want directors and companies that invest in the country for the sole reason that they can get away with killing their workers? On the committee, the CBI was challenged on this point and asked to produce evidence to support their arguments. No evidence was forthcoming.
In 10 years of studying corporate crime and regulation, I have never come across a shred of material evidence that supports either of those arguments. Both companies and their directors have too much to lose by leaving the country. In Canada and in Australia, there has been no capital flight since their laws were introduced. And there is no shortage of directors in those countries queuing up to receive their share options and annuities.
The arguments of the business-side betray a double-edged contradiction. If the CBI is really concerned that British companies will relocate, then it should argue that British firms should be subject to the law wherever they relocate. But the CBI and other business representatives have consistently opposed foreign liability for British firms.
So far, corporate lawyers have predictably argued that the Scottish Executive Group’s proposals go too far and if they were to be introduced alongside the Draft Bill, they would create an uneven playing field with different laws applying across the UK. This, according to lawyer David Leckie, would mean that a train company that crashed on the border between Scotland and England might be subject to completely different legal procedures depending upon which side of the border the deaths occurred.
There are some fundamental problems with this argument. The level playing field argument is used not to argue for tougher laws across the UK, but to justify a ‘race to the bottom’ in which the UK is expected to implement the measures most popular with the business lobby. In fact there have always been, and always will be fundamental differences between English and Scots criminal law. A new bill is not going to overcome those differences.
In Scotland, the prosecution rate for health and safety offences is substantially lower - almost half the rate of prosecutions in England - because of inbuilt differences in criminal legal procedure. That is not to say we shouldn’t try to achieve consistency. But consistency must be based on the principle of seeking the most effective deterrent. The House of Commons Select Committee report offered a different solution to the corporate briefs’ cynical pessimism. It concluded by arguing that, yes, we should have a level playing field, but that the Scottish Executive Group’s proposals, not the Draft Bill, should be used as the model for the UK.
Corporate lawyers in Scotland have also argued existing provisions of the Health and Safety at Work Act are enough. Some point to the Transco case in which the gas supply company were prosecuted for killing a family of four, to support the argument that we need no law reform. This case is the only Scottish prosecution in history for corporate homicide, the equivalent of the English offence of corporate manslaughter. The case collapsed on a technical legal argument, but the subsequent Health and Safety at Work Act prosecution resulted in a record £15m fine for the company (Hazards 92).
Lawyers have argued that this indicates a seismic shift in judicial decision making that is enough to provide a deterrent. There are four key problems with the lawyers’ argument that health and safety law is enough.
There are four key problems with the lawyers’ argument that health and safety law is enough. First, no matter the size of the penalty, a health and safety prosecution does not carry the same gravity as a prosecution for an offence of violence. The law of manslaughter or homicide is how society deals with the most serious cases of negligent killing. As long as the offence of corporate killing remains beyond the reach of the criminal law, this sends a powerful message to offenders that the culpable killing of workers is not a serious crime.
Second, the Transco fine is hardly typical. The average fine for killing a worker or member of the public remains little over £30,000. Third, fines, even on this scale, are likely to have a negligible impact upon large firms (3). The fine of £15m is equivalent to only 4 per cent of Transco’s profits last year.
Fourth, although Transco’s £15m fine certainly must have made directors sit up and take notice, whoever bears the costs of the fine will be decided ultimately by Transco’s directors. The costs might be passed on to consumers, to workers or to shareholders, but that decision will be in the hands of directors. The majority on the Expert Group concluded that in order to face those issues head on, we must have a system that criminalises individual managers and directors and a broad range of penalties for the courts to choose from, including imposing fines on the owners of the company.
Another point that is likely to be argued by the business lobby in Scotland is that there are legal complexities that will prevent implementation of the reforms. We should not accept those arguments. In Canada, the anti-criminalisation lobby argued in parliamentary hearings that there could be no corporate liability because it would create too many complications in the principles of criminal law. The argument was that the reforms moved too far from the criminal law principle of mens rea, or criminal intent.
If this argument is made in the UK, then there is a recent precedent which makes the anti-criminalisation case look weak. In the 2003 Sexual Offences Act, the principle of mens rea has been replaced by a strict liability principle in some cases of rape. In Canada, trade unions and justice campaigners won the struggle by dismissing the mens rea argument as legal bluster. In the UK we can also win this argument.
Civil servants and government officials will no doubt argue that redrafting the government’s Draft Bill for England and Wales will take too much time and will be too complex. In Scotland, the justice minister Cathy Jamieson may put the Expert Group report out to wider public consultation. Delays may be inevitable. But we will only get one chance at this reform for a long time to come. It is important that we get it right. At the same time we must insist, as the House of Commons Select Committee has, that redrafting of the Draft Bill for England and Wales to give it the necessary teeth does not mean a delay in the implementation of the law.
homicide: Expert Group Report 2005, Scottish Executive, 17 November
* Dr Dave Whyte is director of the Occupational and Environmental Health Group, University of Stirling and a member of the Scottish Executive Expert Group on Corporate Homicide.
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