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CORPORATE MANSLAUGHTER

Companies exist in their own right – separate legal entity (Saloman v Saloman) – can sue / be sued, etc.

Can a company be liable for manslaughter? (Can’t be liable for murder because the fixed penalty is ‘prison’)

The problem with a company being liable for any crime requiring proof of Mens Rea, lies in establishing how / whether a company has a “mind”.

The courts have evolved a solution – in Tesco v Nattrass (1972) Lord Reid said that within each company there are “directing minds” i.e. senior persons who decide what the company will / won’t do. If such minds are “guilty” then the company can be said to have a guilty mind.

The principle of equating the M.R. of a company with that of its directing minds / officials is known as the “Identification principle”. Within a large firm, only a small number of persons will be the ‘directing minds’ – it is much easier to establish in a smaller firm (e.g. a sole-trader)

The problem of identifying the directing minds led to the failed prosecutions of P & O Ferries (1991) ( the court said it was impossible to find a single individual who could be identified with ‘P&O Ferries’) – and British Rail after the Clapham rail crash ( simply “aggregating” fault of various people is not sufficient – there is no concept of “corporate fault” to level blame at the company itself without regard to the particular persons who are its officers / employees).

Successful prosecutions have been brought for Corporate manslaughter in cases where the managing director was directly in charge of the Companies activities: the firms were small and it was easy to identify the companies directing minds:

(i) R v Kite and OLL Ltd (1994)

Peter Kite was managing director of OLL ltd., a firm offering outdoor activities. Some staff expressed concerns to the M.D. about the safety of canoeing expeditions in Lyme Bay, in Dorset. Kite did nothing about it. Four 6^th form students on a course were drowned when their canoes capsized in heavy seas.

Both Kite and the Company were convicted of manslaughter (GNM) – Kite was identified as the clear directing mind – his decisions were effectively those of the Company also.

(ii) Jackson Transport (1996)

A 21 year old employee died when he was sprayed in the face with a toxic chemical when cleaning a road tanker. The Managing Director (James Hodgson) was held to be the ‘directing mind’ (on the same basis as Peter Kite, above). This was also a small firm so the ‘identification’ of the directing mind was not difficult.

(iii) R v Bowles (1999)

2 directors were convicted, as was their company, of manslaughter when one of their lorry drivers fell asleep at the wheel and caused a death. They had ignored the ‘excessive hours’ that their drivers often worked.

(iv) Barrow Borough Council (2004)

An outbreak of Legionnaires disease at an arts centre killed seven people. The council had cancelled a contract to maintain the air conditioning unit that lead to the outbreak. A council employee – the designer of the centre – was charged along with the Council.

In Meridian Global Funds Ltd. v Securities Commission (1995) the approach to the identification principle was refined. In essence, Lord Hoffman said that “directing minds” could include those persons who were actually in charge of the matter at the time, even if they were not “senior officials” or at the Company’s nerve centre. This implies that, say, a train driver could be regarded as the directing mind in a prosecution such as Paddington, Southall or Clapham.

How would the courts have dealt with P & O if this ruling had applied then?

However, in Attorney-General’s Reference (No. 2 of 1999) (2000) the CA confirmed that a “non-human defendant” cannot be convicted of manslaughter by gross negligence unless there is evidence to establish the guild of an identified human individual for the same crime. This appears to confirm that the identification rule, as modified by Meridian, is still the law for Corporate manslaughter.

The Law Commission proposals for reform

Following the cases in the 1980’s /90’s, the Law Commission produced a report:

Involuntary Manslaughter (March 1996)

(Report No. 237)

This Report made recommendations for the reform of “Corporate Manslaughter” and suggested:

1. A (new) specific offence of “corporate killing” (to be similar to “killing by gross carelessness” for an individual).

2. A Company can be prosecuted for this if a “Management failure” results in a persons death, and that failure constitutes conduct falling far below what can be reasonably expected of the Company in such circumstances.

The offence would be an indictable offence, tried in the Crown Court.

The sentencing options would be (i) a fine of an unlimited sum;

(ii) to correct the failings which led to the death.

It goes on to say that a “management failure” occurs where

1. the way the Company’s activities are managed fails to ensure the health / safety of employees and other affected persons (e.g. customers), and

2. the failure can be said to have caused the death (even though the immediate cause is the act / omission of an individual).

The government has stated its commitment to introducing a Bill on corporate manslaughter.