Thursday, 11 January 2007.
The Committee met at two o’clock.
[The Deputy Chairman of Committees (LORD GEDDES) in the Chair.]
Corporate Manslaughter and Corporate Homicide Bill
1: Clause 1, page 1, line 3, after “organisation” insert “including a public authority”
The noble Lord said: First, may I say how sad—but how pleased—I am to see that the Minister who will be responding today is the noble Lord, Lord Bassam? I am sad because I understand that the noble Baroness, Lady Scotland, has been taken ill. Will the noble Lord send our very best wishes to her for a speedy recovery? However, I am pleased because I know from previous experience how amenable the noble Lord is to sensible, carefully argued amendments. Therefore, we look forward to hearing his responses.
I declare my interest as set out in the register, in particular as a partner in the commercial law firm of Beachcroft LLP.
Moving Amendment No. 1 gives me the opportunity to confirm what my noble friend Lord Henley said at Second Reading—that we are very supportive of the Bill but would like to see it improved. In the other place, in the debate on 4 December, Gerry Sutcliffe, one of my parliamentary colleagues for many years and the Member for Bradford South, said this in explaining the Bill:
“The driving force behind the Bill is the fact that the current law of corporate manslaughter is based on too narrow a definition of corporate liability. The law works reasonably well for small organisations, but it does not reflect the reality of decision making in large or complex organisations, where failures in the management chain can rarely be laid at the door of a senior individual manager. It is important to understand that point, because it underpins the Government’s approach”.—[Official Report, Commons, 4/12/06; col. 67.]
That is an approach with which the Opposition agree.
I have been interested in this subject for many years, and I have the honour to be president of the All-Party Group on Occupational Safety and Health. This is a piece of legislation to which we have been looking forward for some considerable time, which underpins why it is so important that we get these provisions right. We seek to insert the words in Amendment No. 1 in page 1, line 3, so that the offence applies to an organisation “including a public authority”. The Bill removes Crown immunity but, at the same time, includes a whole range of wide exemptions that act principally to provide effective immunity to public bodies that cause deaths of members of the public in a wide range of circumstances, however grossly negligent their conduct might be.
In its recently published report, the Joint Committee on Human Rights noted that the combined effect of provisions in the Bill restricting the definition or the scope of the application of the offence is substantially to restore the legal or de facto immunity from prosecution enjoyed by many public bodies under the present law. Therefore, on the one hand we see Crown immunity removed and on the other hand we see it back in, in a whole range of ways. In summary, the Bill will prevent a whole range of possible deaths from resulting in a prosecution, however negligent the public body involved has been. It is right also to mention deaths in prison or police custody, although we shall deal with that issue in greater detail when we come to later amendments, including Amendment No. 21.
I think it vital that we explore the extent to which public bodies should be exposed to a possible offence of corporate manslaughter. I am sure that, in some cases, it would be ludicrous to open up public bodies to such an offence; for example, there is no question of including the Armed Forces on active deployment. Yet, if the Bill remains as it is, a higher value will be placed on the duty of care in the incorporated, private sector than in the public sector in the eyes of the law. The perpetrators of a gross breach of a duty of care towards an individual in public custody would therefore face a lesser penalty than the perpetrator of such a breach in the private sector.
As I said, the Minister in the other place stated:
“The driving force behind the Bill is the fact that the current law of corporate manslaughter is based on too narrow a definition of corporate liability”.—[Official Report, Commons, 4/12/06; col. 67.]
Therefore, I hope that, when the noble Lord replies to this debate, he will assure us that he will not shy away from what I believe is an admirable principle of extending the scope by maintaining a narrow scope in the public sector. Indeed, the draft Bill said that the Government need to be clearly accountable when management failings on their part lead to death. The exemptions in the Bill as it now is denigrate the value of that duty of care.
JUSTICE has given us some strong arguments, including the following comment:
“To create such an exception is to state that in those circumstances gross negligence causing death on the part of a corporation is lawful under the criminal law”.
The London Criminal Courts Solicitors’ Association has criticised the various exemptions, stating that, despite the removal of Crown immunity, many Crown bodies will not be properly held to account for deaths arising out of their management failures. The European Convention on Human Rights is an issue here, as the lack of inclusion of public bodies could amount to a breach of Article 2, which protects the right to life, and Article 13, the obligation to provide an adequate and effective remedy in respect of breaches of the right to life. We have also received a detailed brief from the Centre for Corporate Accountability, but I know that many of those who wish to participate in this debate will refer to a number of the arguments that have been made to us, as well as their own views.
The new and improved version of exemptions set out in Clauses 4 to 7 has confused rather than clarified the definition of “public functions”. In Standing Committee in another place, the Government stated that the new clauses were a reaction to the criticisms by the Home Affairs Committee and the Work and Pensions Committee of the vague “exclusively public functions” exemption. However, the way in which the Bill is currently set out creates confusion, as Clauses 4 to 7 describe one type of exemption while Clause 3(2) covers general exemption. It is difficult for us to follow that. I hope that the Minister will reassure us on all those points.
This group of amendments also covers unincorporated bodies. I thought of degrouping them but I hope that, as we are talking about scope, the Committee will agree that it would be helpful now to refer to the amendments relating to unincorporated bodies. These amendments are of course in the names not only of my noble friend and myself, but of the noble Lords, Lord Razzall and Lord Lee of Trafford.
Unincorporated bodies have not yet been included because, as the noble Baroness, Lady Scotland, said on Second Reading, they,
“do not have a separate legal identity, and the question, therefore, of finding a separate corporate liability takes on an odd character in this context”.—[Official Report, 19/12/06; col. 1899.]
I contend that an odd legal character is no reason for exempting a substantial number of companies to which this law could apply. It is of course not true that all unincorporated bodies lack a distinct legal personality. The Law Society has put the effective point to us that partnerships and trade unions have distinct legal personalities. The change of personnel at the top may be no more frequent than in a company. We must consider that point.
Legislation such as the Disability Discrimination Act 1995 and the Health and Safety at Work etc. Act 1974 already applies to unincorporated bodies. In its evidence to the Home Affairs Committee and the Work and Pensions Committee, the Law Society said that it felt that the exemption of unincorporated bodies appears to be discriminatory and unjustifiable. I agree.
In its consultation of 2000, the Government agreed that the Bill should apply to the undertakings of all bodies. It said that it did not wish to create artificial barriers between incorporated and non-incorporated bodies. Against that background, I was therefore pleased to hear the noble Baroness say at Second Reading that, if a sensible way could be found for the Bill to take a wider position, the Government would seek to bring amendments forward. Perhaps the Minister might give us more detail, to assist us in understanding how long we must argue this point before the Government concede it.
Amendment No. 20, in the name of my noble friend and myself, proposes proceedings for considering an offence by an unincorporated association or non-Crown body. Subsection (1) ensures that, where such a body was prosecuted, it would be under the name of that body rather than that of an individual. Subsection (2) ensures that any fine imposed on conviction would be paid out of the funds of that body and not imposed on an individual. I hope that that amendment meets with a positive response, even if the other amendments on this issue do not. We have seen a detailed brief from Liberty on this point, to which other noble Lords may want to refer. I am grateful to Liberty for having given us such detailed and helpful information.
Given the extent of the offence, one should not be trying to exclude a series of organisations within the public or private sectors from the consequences of their decisions, acts and omissions. That people should be held to account is a well recognised principle. I am concerned that the Bill has not got it right, and so I beg to move.
I wish to speak to the amendments in this group standing in my name and that of my noble friend Lord Lee of Trafford. I entirely agree with the remarks of the noble Lord, Lord Hunt of Wirral, and I think that we are ad idem on all the amendments in this group. Without wishing to repeat anything that he said, perhaps I may add a couple of points to the very good explanation that he gave as to why unincorporated associations should be included within the scope of the Bill.
One point that he did not refer to, which has been drawn to our attention by one of the lobbying organisations, is the human rights issue. When these clauses were debated in another place, it was suggested that the Human Rights Committee had said that failure to include unincorporated associations could lead to our being in breach of Article 14 of the European Convention on Human Rights when applied in conjunction with the right to life in Article 2 because of the discrimination that would apply within the system whereby, if a person was killed by a company, an offence would be committed, but it would not be an offence if he was killed in identical circumstances as a result of the activities of a partnership, trade union, school or other unincorporated association. I think that that is another reason why unincorporated associations should be included within the scope of the Bill.
When this matter was debated in another place, it was suggested that there could be unfairness if an offence was committed in a two-partner operation by one partner contrary to the knowledge of the other partner. It was suggested that this would be unfair in relation to a small partnership. But, of course, in the Bill the situation is no different in the case of a small company, where two directors could be in office and one director committed some act or omission that resulted in the company being grossly negligent and the other director was not aware of it. So I do not think that that point is valid.
I should prefer, and urge noble Lords to go for, the situation in the Home Office consultation document of 2000, as set out by the noble Lord, Lord Hunt, where the Home Office clearly took the view that it was inappropriate to distinguish between unincorporated associations and companies for the purpose of this legislation.
I want to add a brief word in support of my noble friend Lord Hunt of Wirral. The key point in this group of amendments is whether public authorities—indeed, whether anyone in this country—should be above the law. We are talking not just about ordinary negligence but about very serious or gross negligence. I see that Dicey is quoted by Liberty, to which, like my noble friend, I am very grateful. Dicey points out:
“With us, every official, from the Prime Minister down to a constable or a collector of taxes, is under the same responsibility for every act done without legal justification as any other citizen”.
While there may be a practical or technical reason why active service in the Armed Forces may require an exemption—although I am not certain that it does—the circumstances are so utterly different that the question of manslaughter hardly seems appropriate. However, we can look at that if necessary.
Apart from very rare exceptions, I cannot think of any reason why the law of manslaughter should not apply to every public authority. Just a few weeks ago, we made imprisonable the causing of death by careless driving—something that I strongly resisted as being wrong in principle. But we are not talking about ordinary or mere negligence; we are talking about gross negligence—a falling far below the standards that are to be expected of a reasonably careful citizen.
If the police force, the Prison Service, some public body laying on a school trip or making a provision for young people, or any public authority quite rightly providing enormously beneficial services or undertaking difficult tasks, such as keeping dangerous criminals in prison, falls so below the expected standard that its gross negligence causes death, I cannot, at the moment, see any reason in principle why it should be exempt or why it should have anything particular to fear.
I should have declared my interest as a practising member of the Bar, in a small way, and as chairman of Stowe School. If one is chairman of a large school, one has a considerable responsibility. All sorts of dangers can arise on school trips—lumps of masonry can fall off an historic monument—and they require a considerable degree of care. But why should that be different for a public authority? I do not think that public authorities will find this unduly onerous. In fact, it may give them a sensible weapon—if that is the right word—against their paymasters, who should provide proper funding for what they can reasonably be expected to do. The highest levels of government ought to have that in mind.
I shall listen with great care, and I am sure that the Minister and the noble Baroness, Lady Scotland—I, too, send her warm wishes for a quick recovery—will be thinking enormously carefully about this. I do not think that this is a party-political issue; Governments at all times have been a little reluctant. When we were in government, we quite rightly cut back very heavily on Crown immunity, and we were quite rightly urged to do so by the Opposition of the day. One of the duties of Parliament is to hold the Government to account on these important issues. I strongly urge a complete change of heart on this aspect. I shall listen carefully to closely reasoned argument for individual and narrow exceptions, if they can be justified, but, in principle, the law should apply to everybody equally.
I am happy to follow the noble and learned Lord, Lord Lyell, because I agree with him that the law should apply equally across the board. Thinking of our journey ahead into the ocean of the Bill, I shall return to that principle, on which I hope to have his agreement, when we come to Clause 16 and the amendment to it that I have tabled.
In order to be brief, I shall not address the issue of public authorities, which is the most important of the amendments in this group—the groupings are somewhat bizarre, but that is, perhaps, the fault of some of us not objecting to them. The public authority debate is extremely important. I express no view on it at the moment, but I look forward to the Government’s case for the extraordinarily wide immunity in the Bill.
I shall address a few remarks to the problem of unincorporated associations. As the noble Lord, Lord Hunt, correctly said, under some statutes unincorporated associations can be proceeded against, and the amendment that he tabled, Amendment No. 20, in which I have a particular interest, makes provision for a way of doing that. But it is not true that unincorporated associations can be proceeded against easily in the law as it is without any statutory reference. However, that is no reason for exempting unincorporated associations from the grasp of the Bill. It is a purely technical point, sometimes made by lawyers—of which I am one—but it is surely no ground for resisting liability for what the Bill deals with.
It is, of course, possible to sue an unincorporated association on a representative action, but in practice there are grave difficulties with that. Although the leading case of Bradley Egg Farm v Clifford 1943—which I am sure is never far from the Minister’s slumbers—shows how one can do that in a civil action for negligence, it is absurd to leave the possibilities of succeeding against a guilty unincorporated association, of which there are many with great resources, to chance. Therefore, I strongly support the insertion of unincorporated associations into the list of bodies covered.
I have one point to make about Amendment No. 20, which I hope the Government will nevertheless resist. It states in subsection (1) that an unincorporated association can be sued in a sensible way and in subsection (2) it states:
“A fine imposed on an unincorporated association or body on its conviction of such an offence shall be paid out of the funds of that association or body”.
First, that raises a very difficult question because a body cannot own anything; it is unincorporated. Usually, with unincorporated bodies, persons—sometimes the chairman, the secretary or the like—hold the funds as trustees for the organisation. If that is what is meant, it should say so.
Secondly, I resist subsection (2) of Amendment No. 20 on the ground that frequently unincorporated associations do not have large funds, even funds held by trustees. The case that I am thinking of was that of a body that ran a sports ground and did not have many funds. However, where that is so, there is absolutely no reason why a body that is found liable in a similar action should not pay up if a fine is imposed. The body in that case was the management committee. If the management committee has funds that are not technically held on trust for the unincorporated members of the association, which is perfectly possible, there is no reason why the body should totally escape a fine. Therefore, I would resist the terms of subsection (2) and I hope that the Government will resist them, too. However, I welcome the amendments that introduce unincorporated associations into the Bill.
I take a somewhat different view on unincorporated associations. I entirely welcome the purpose behind the Bill and I congratulate the Government on extending the provisions of the Bill to cover certain public bodies. At the moment, to extend the provisions of the Bill to unincorporated associations is a bridge too far for me. What are included in unincorporated associations? We must have some idea about that before we extend such an important criminal offence to what they do. This is perhaps a silly example, but working men’s associations, ordinary West End clubs and so on are all unincorporated associations; they may be liable in respect of certain regulatory offences, but to extend to them for the first time the serious consequences of the criminal law of manslaughter would, in my view, be a mistake. Let us proceed slowly and see how this Bill works—I think that it will do a lot of good—before we extend it too far.
Perhaps I can ask the noble and learned Lord a question. We have here a rather oddly constructed Cross Bench, but I am sitting with him and not against him. Does he agree that a body such as John Lewis, which is not incorporated, should be covered by the Bill? I say that with no hint that that firm would be liable for anything, but such bodies are not unknown in commerce and are not incorporated.
Perhaps I may ask for enlightenment on one matter. I join all other noble Lords in expressing pleasure at the fact that Crown immunity appears to have been lifted on a number of bodies. I speak to Amendment No. 21, which relates to the inclusion of Her Majesty’s Prison Service, about which I am delighted—we shall approach corporate manslaughter as it applies to deaths in custody later. Amendment No. 27 mentions, in addition to custody, people “otherwise lawfully detained”, which applies to other parts of the Home Office such as the police and the Immigration Service. Why is Amendment No. 21 limited to the Prison Service? Why does it not apply to others who might be responsible for detention, if it is felt that the legislation needs to be expanded to cover other parts of the Home Office?
I thank the noble Lord, Lord Hunt, for his opening remarks, which were very kindly addressed to my noble friend Lady Scotland. I am afraid that she is unwell. Members of the Committee have a rather untried and untested substitute speaking for the Government today. I shall endeavour as best I can to deal with the various questions and points that have been raised during what I fully recognise is an important opening debate.
I very much appreciate the consensual approach that has been adopted thus far, because I think that there is a comity of view and a collective desire to reach a satisfactory outcome in this important development of the law on corporate manslaughter. I think that we are all heading in a similar direction of travel and that we are in essence finessing the detail to make the measures as powerfully applicable as we constructively can. That is a good way of approaching something with which we have been wrestling for some years.
As has been well explained by all contributors to the debate, the amendments would extend liability for the offence in Clause 1 to unincorporated bodies and, in the case of the amendments in the name of the noble Lord, Lord Hunt, to public authorities. As the Committee will be aware, the question whether to bring unincorporated bodies within the ambit of the legislation was carefully examined by the Law Commission. It pointed out that there is a wide array of unincorporated bodies, from a large legal or accountancy partnership with many hundreds of employees to a partnership of perhaps just two individuals with no employees. The commission concluded that the right course would be to legislate for a corporate offence, as we have proposed in Clause 1, and to consider how it operated in practice before deciding whether it was sensible to extend the offence to unincorporated bodies. The noble and learned Lord, Lord Lloyd, spoke in much the same spirit: let us get the legislation in place and then see how it works. However, it is clearly important that we have this debate and give the matter further thought. This Committee gives us that opportunity.
To put the contrary argument at its most emotive, bereaved relatives would find it hard to understand why, by virtue of the legal persona of the organisation that they considered to be responsible for a family member’s death, it was not possible to prosecute that organisation for the offence of corporate manslaughter. It can be of no consequence to a bereaved family that the organisation allegedly responsible for the death of a loved one is, let us say, a partnership rather than a public limited company. What matters to them is the need for that organisation to be properly held to account.
I accept that there is force in that argument, but, as the Law Commission advised, we need to proceed with some caution. The new offence identifies a corporate liability that attaches to the separate legal entity of the corporate body. This does not exist in the case of an unincorporated body. In the case of companies and other corporate bodies, there are clearly defined responsibilities on the part of those managing the organisation and the organisation itself. That provides a basis for holding a corporate body to account on the ground of management failure. However, unincorporated bodies exist as a group of individuals, with no distinction between collective and individual liability.
I do not make these points to argue that the offence cannot extend to unincorporated bodies. Unincorporated bodies can clearly be prosecuted for a range of statutory offences, commonly in the regulatory field. However, this offence is designed not to enforce a particular regulatory regime but to impose a specific liability on an organisation.
I am also conscious that, as the Government set out in their response to the pre-legislative scrutiny report on the draft Bill, there is little evidence of a significant lacuna in the law. Health and safety enforcement activity is generally low in the sectors where unincorporated bodies are generally found. They are also commonly smaller organisations, where individual liability is likely to provide a suitable sanction. For example, of approximately 570,000 partnerships, 535,000 employ fewer than 10 people.
Moreover, the application of the offence to corporate bodies is wider than is often understood. It is not the case, for example, that hospital trusts are not covered—these are corporate bodies. Schools, which are specifically picked out in the amendment in the name of the noble Lord, Lord Razzall, are broadly covered by the offence either through the corporate status of local education authorities or of school governing bodies. Industrial and provident societies such as co-operative or benevolent groups have a corporate status under the Industrial and Provident Societies Act 1965, as do friendly societies registered under the Friendly Societies Act 1992.
However, the law of manslaughter does not at present apply to unincorporated bodies and we would be extending the law to them for the first time. Some care needs to be taken here as it is likely to bring a wide range of smaller bodies under the law for the first time. We do not want this legislation to deter local informal clubs or societies. Many of those will owe health and safety duties, but in important respects those apply only to organisations that are employers.
The Government recognise that there have been wide calls for the new offence to be extended to unincorporated bodies. I have set out why we have approached this in the way we have done so far and why we should act with caution. However, we are prepared to explore some extension of the Bill. I note that the noble Lord, Lord Hunt, seeks to make a link with health and safety legislation. There may well be something in this approach that we will want to explore further. That said, I do not want to raise expectations that any government amendments on Report would be quite in the terms set down here, but suffice it to say that I have a good deal of sympathy with the points that the noble Lord has made. It is probably safest at this stage to say that we will take this away and give it further thought; then perhaps we could invite the noble Lord to a further discussion before Report, when we have firmed up our own thinking. That is the traditional, consensual way of doing things as a Bill progresses.
I should, however, put it on record that I do not accept the case for adding an express reference to public authorities to the list of organisations in Clause 1. The Bill already makes very comprehensive provision in this respect; that has been generally acknowledged but perhaps not as well understood as it might have been. The offence will apply automatically to a wide range of public authorities by virtue of their being corporate bodies—and the Bill applies to these, whether part of the Crown or not, without further provision. This includes authorities as diverse as local government, National Health Service trusts and other NHS bodies, police authorities, and a wide range of non-departmental public bodies. This last group is too numerous to list but a few examples might suffice to demonstrate the wide coverage: the Health and Safety Executive, the Parole Board, the Civil Aviation Authority, the Charity Commission, Ofsted, the Human Tissue Authority and the UK Film Council. That is a pretty broad range of organisations. Indeed, as few of these organisations have Crown immunity as the law stands, they are already liable to prosecution for gross negligence manslaughter.
Specific provision is included in the Bill to deal with police forces, which are not corporate bodies and, in Schedule 1, with individual government departments and similar bodies, which again are not incorporated. In particular, in the case of government departments, there is benefit in clearly identifying those bodies that can be prosecuted for the offence so that the position of departments and subordinate bodies is clear. It would not be helpful to have an overlapping provision in the Bill, undermining the clarity of the schedule. Such a provision would also give rise to confusion over the position of, for example, various statutory office holders and corporations sole which, as specific individuals, are not covered by the offence but are public authorities none the less.
I am satisfied that the Bill already makes adequate provision to apply to the Prison Service—a particular interest of the noble Lord, Lord Ramsbotham—and that further provision to list it in Schedule 1, as proposed in Amendment No. 21, is therefore unnecessary. The other bodies that the noble Lord referred to are also covered. Our approach to the schedule is to list all government departments, but executive agencies such as the Prison Service are not listed separately, except where they are also non-ministerial departments. Executive agencies are properly part of their parent department; that is how that part of the Bill works. There is a degree of managerial independence, but no formal separation. It is not our intention, in applying this offence to the Crown, to alter the relationship between departments and agencies by introducing any formal separation through the provision of independent criminal liability. However, the listing of a department covers its associated agencies and the schedule therefore leaves no lacuna.
The Government recognise the strong public interest in ensuring that government departments and other Crown bodies are clearly and openly accountable for management failings on their part. The Bill’s proposals for lifting Crown immunity represent a significant and unprecedented step, ensuring a level playing field for public and private sector employers under the new offence when they are in a comparable situation. In particular, the Bill ensures that the Crown’s responsibilities as employer and occupier will be widely covered by the offence. That represents a considerable extension of the law and will enable Crown bodies to be prosecuted for gross failings to ensure safe working practices for their employees or safe conditions in the workplace, where these have had fatal consequences. This will provide new, important opportunities for bereaved families to receive justice where Crown immunity currently leaves no scope.
The broad and often unique responsibilities and activities of public bodies that affect the public raise more difficult questions. Public bodies frequently operate under a framework of statutory duties, requiring them to perform particular functions. They must often allocate resources between competing public interests with little, if any, option of deciding not to perform particular activities. Public bodies will also often hold special authority or perform functions that the private sector does not, or cannot, do on its own account. We would all accept that those functions must be carried out in the wider public interest.
That has been a long response to the points made. I hope that it has been as comprehensive as I imagine it to have been.
May I take the Minister back to unincorporated associations, which are covered in his brief? For many unincorporated associations, gross negligence that has caused death would be covered by the ordinary law of manslaughter. To seek to apply corporate manslaughter is therefore, in a sense, unnecessary. Is that right?
We generally agree with that point, hence our caution. As I said, this is a developing area of law and has been for some time. That is commonly understood.
Noble Lords will want to think about what I have put on the record. I am sure that they will not want to press their amendments today, in the knowledge that we will give further, broader and careful consideration before Report to some of the issues that have been valuably raised.
With regard to the list in Schedule 1, perhaps with the exception of the Prison Service and where local authorities are responsible for children or young people but where one can see that deaths have occurred and might properly come within this provision, it is not immediately apparent where some of these public bodies would ever be likely to be guilty of corporate manslaughter, even if they were incorporated. Defra, for example, is one of the bodies listed. I was racking my brains to think of circumstances when its officials or those employed by the department might negligently handle equipment and so on, give rise to deaths and thus—at least, in theory—render Defra liable. Can the Minister explain one or two of the thoughts of principle—that is what I was hoping to tease out from him earlier—which justify the restriction of these bodies’ liability only to their position as employers or as occupiers of land? Should they handle activities badly and kill someone, what principle would cause them to be exempt?
As I understand it, unincorporated bodies are largely covered at present because individuals can be prosecuted. Perhaps I may expand on our thinking on this. As I argued earlier, the special position of public bodies that derive powers from, and function on behalf of, the state means that they are already subject to a strong public framework of standards and accountabilities. The noble and learned Lord will be more aware of that than I am, given his background. That framework includes, for example, national inspectorates that examine operational practices on a thematic and institutional basis, ministerial accountability to Parliament for the standards to which these organisations operate and how they perform independent investigations into particular incidents, and other public inquiries examining both the incident in question and the wider issues, as well as specific remedies such as judicial review and the Human Rights Act. We can argue that they are all important forms of accountability to Parliament and, through Parliament, to the public.
It is also important to recognise that the offence is not about the liability of particular individuals acting unlawfully. In those cases, the criminal law will continue to apply with full effect. The offence is uniquely concerned with the overall management by an organisation of its activities. For private companies, other than as regards internal accountability to those who manage or own the company, that is rightly a matter for regulatory and criminal offences. Moreover, there is a wider dimension for public authorities and, in particular, Crown bodies, involving a strong measure of accountability, as I have argued. Under the offence, it must be set out against that wider dimension where accountability for the management of a public body should be a concern for the criminal law.
At present, that is achieved in a number of ways in the draft Bill. They include basing the offence on the common-law duty of care, setting out a number of activities to which a duty must relate, and explicit exemptions covering public policy decisions, exclusively public functions and the Armed Forces. That ensures that the offence covers organisations and responsibilities to ensure safe working practices and safe premises for their employees, and it is widened to other circumstances in which a duty to safeguard members of the public is owed, but it does not apply an offence to matters that are intrinsically ones of government. Finally on that point, I can confirm that Crown departments are subject to the offence not only in respect of employer and occupier responsibilities but wherever they owe a relevant duty in Clause 2. I hope that that helps the noble and learned Lord.
I should like to clarify the Minister’s thinking. I do not want to press him too far on this but am I right to assume that he is saying that the Government accept the point made by the noble and learned Lord, Lord Lloyd, that, in the case of most small unincorporated associations, the existing law regarding manslaughter probably provides the protection that people are looking for but that the Government are prepared to look again at the question of larger unincorporated associations, where clearly the point made by the noble and learned Lord, Lord Lloyd, would not apply?
The noble Lord makes a perfectly reasonable and fair point. In essence, he has summarised the position. We are concerned about large organisations; small organisations are probably adequately covered. We need to approach this with some care because of the potential damage that we could cause if we do not.
I do not want to detain the Committee, but it is a victim of atrocious grouping, which is our fault because we can all go and ask for different groupings. It is ridiculous to have a debate about public authorities and unincorporated associations as though they were under the same banner.
I wish to follow up on unincorporated associations. The Minister said that he will approach the matter with care. That is not what I want. I want care, but I want a rethink because, when we addressed unincorporated associations, we were not talking about small companies, partnerships in the technical sense of partnership, industrial and provident societies or co-operatives, all of which he spoke about. I thought that we were dealing with large, unincorporated associations that operate commercially. There are such things. I asked the noble and learned Lord, Lord Lloyd, about John Lewis, but further research needs to be done. There are such organisation as that, especially locally. They are not cricket clubs. I am not trying to get directors of cricket clubs prosecuted for manslaughter; I am saying that there are commercial organisations that fall under none of the heads that I have mentioned but are unincorporated and sometimes have difficult and awkward constructions. It is quite absurd for the Bill to leave those organisations. All I want is for the Minister to say quite frankly and clearly that he will go away and think about this again with his advisers.
I am happy to read very carefully and think some more about what the noble Lord said. I am not going to commit to more than that. When we were talking about unincorporated bodies, I made the point that we are thinking about larger bodies rather than smaller ones because that is where there is more potential for a problem, given the volume of activity that they are likely to undertake. We need to think about this carefully. It is not an easy issue to wrestle with.
This has been an important debate, but I agree with the noble Lord, Lord Wedderburn, that it has been a difficult debate because we have been dealing with two separate issues, and I shall respond to the Minister in two parts. We will be returning to public bodies later with particular amendments, but, as I understand what the Minister said to my noble and learned friend Lord Lyell, the department will be liable if it is in gross breach of a duty under paragraphs (a) and (b) of Clause 2(1), but not if it is in breach of a duty of care under paragraph (c). When we get to the more detailed analysis, we will need to go into this very carefully indeed.
I was following Clause 3(2), which states:
“Any duty of care owed in respect of things done in the exercise of an exclusively public function is not a ‘relevant duty of care’ unless it falls within section 2(1)(a) or (b)”.
That is what I was referring to. We need to explore this in much greater detail as we go through the Bill.
My pleasure at the arrival Lord, Lord Bassam, was justified when he conceded the amendment. I had been moving an amendment that says that an organisation under the Bill includes a public authority. The Minister spent a considerable portion of his speech demonstrating that an organisation does indeed include a public authority, and I am grateful for that. He added that there are some public authorities that are not included and I believe that he mentioned a corporation sole—or a corporation’s soul, which is a wonderful idea. I would prefer them to be named and to know exactly what we are dealing with so that, with public authorities that are not included, we know what they are, we can look through them and we can decide whether or not it is right that they are excluded.
I tend to agree with my noble and learned friend Lord Lyell that the Government should have a complete change of heart. This law should apply to everyone unless there are very good reasons why it should not apply. However, I was slightly confused when it was said that there are some organisations that should not have the criminal law attached to them. I hesitated and I was about to interrupt, but I am glad that I did not, because the Minister and the noble and learned Lord then agreed that the Health and Safety at Work etc. Act 1974 applies to unincorporated associations and that includes the criminal law. People can be charged under that Act if they are involved in an unincorporated association.
I return to the point made by the noble Lord, Lord Wedderburn, that it is perfectly possible for a very substantial organisation to be an unincorporated association. I do not like the idea of passing a law that would enable perhaps a very large business to become an unincorporated association for the purpose of evading responsibilities under this piece of legislation. I am also aware, as I mentioned previously, that the original Home Office document said that we must be careful not to create artificial barriers between incorporated and unincorporated bodies. I believe that there lies the nub of the matter. I was very pleased indeed that the Government are to consider this. I am not sure that we have a great deal of time.
This is probably an appropriate moment to say that in this place we are making up for the fact that the Bill was not subjected to the line-by-line scrutiny that it should have received in the other place. Many of us have always believed that that is the huge value of this House—that we go through things very carefully and slowly. A whole raft of amendments was never properly debated in the other place and it is up to us to ensure that they are scrutinised now. We are now in Committee, and although the Bill has gone through all the stages in the other place, the Government are still considering what they may or may not introduce. We are running out of time. If the noble Lord is to come forward with some amendments, I hope that we can see them very soon because, as we go through the Bill line by line, we shall want to explore those dividing lines.
The noble Lord, Lord Ramsbotham, looked at me but addressed a question to the noble Lord, Lord Razzall, because the words “or otherwise lawfully detained” appear in the amendment of the noble Lord, Lord Razzall. No doubt the noble Lord will deal with that matter when we come to that amendment.
This has been a very useful opportunity to have a general look at the Bill and to have some idea how best we should proceed. I welcome the way in which the Minister has approached this group of amendments. I and my noble friend would like time to consider carefully the points that the Minister has made. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
2: Clause 1, page 1, line 3, leave out from “if” to end of line 4 and insert “a management failure by the organisation—”
The noble Lord said: That is indeed very unlikely. Amendments Nos. 2, 4, 7 and 10, which are grouped together and stand in my name and that of my noble friend, pick up on the point made by noble Lord, Lord Hunt of Wirral, during his winding-up remarks on the previous amendment. When the Bill was in another place, changes to the test that should apply for the management of a company to be liable for this offence were made at the end of the debate. I think that I am right that those changes were not debated in Committee in another place nor even referred to in the debate at Third Reading. This test means that we are obliged to look very carefully at whether the amendments that the Government have made satisfy what ought to be the requirements of this legislation.
In proposing the amendments, I am grateful to the Centre for Corporate Accountability, which has been quite critical of the new test. The amendments probe whether this Committee can be satisfied that the right test is being applied. The test as it stands does not meet the objectives that the Government have set out. The Government were not correct to say in another place that the “senior manager” test has been removed; it clearly remains in the Bill. A gross failure within the management of an organisation will not result in the organisation’s prosecution, unless a substantial element of the gross failure is at a senior management level. Is that right and should it be the case?
It is not correct that the question at the heart of the offence is whether the organisation as a whole has failed, since no offence will have been committed unless senior management played a substantial part in the gross failure that caused the death. The Government said in another place that an organisation should not be found guilty if there was only a minimal element of senior management failure in the gross breach. A number of people feel that that is the wrong way to put it and that an organisation should not be found guilty if it had taken all reasonable steps to avoid a gross failure at a lower level within the organisation. This articulation, which is at the centre of these amendments, clearly supports the Government’s message that health and safety should come from the top of organisations.
The most significant concern that a number of us have about the new test is that the change from the requirement for all the gross failure to be at senior management level to the requirement that there be a substantial element of the gross failure at senior management level does not ensure that companies where systemic failures cause deaths would be brought to account. Therefore, it does not satisfy the original purpose of the legislation. I look forward to hearing the remarks of other noble Lords, who I know are concerned about this. I urge the Government to look again at this test. I beg to move.
I do not know whether it would be for the convenience of the Committee to consider what has been proposed by the noble Lord, Lord Razzall, before coming to an amendment of his with which I have great difficulty, but which he has not mentioned specifically—Amendment No. 4. I am happy to come back to it when the more important side of the amendments has been dealt with.
I draw attention to Amendment No. 7, which a number of bodies have asked us to consider. It would not confine liability to circumstances when an organisation is guilty because of the way in which its activities are,
“managed or organised by its senior management”,
but would spread liability more widely. We need to explore this very carefully, with an open mind, because it is not as obvious as it sometimes seems to people whether someone junior in an organisation—in other words, someone other than senior management who makes a serious mistake that leads to death—is grossly negligent. Unless there is some gross negligence in how that person was organised by senior management, I am not sure that it would be right to place on the organisation liability for corporate manslaughter. There is a tradition and a sound legal principle to be found in a famous case of a trading standards officer, whose name will come to me in a moment, whereby, provided that senior management have shown that they have carried out their functions properly, an error by junior management does not render the whole organisation liable. We should depart from that only after very careful thought.
Before the noble and learned Lord sits down, I make the point that Amendment No. 7, which stands in the name of my noble friend and myself, should be read in conjunction with Amendment No. 4, because that deals with the point that he makes. I know that the noble and learned Lord, Lord Lloyd, wants to criticise Amendment No. 4, and I am happy to concede that it is not necessarily how we should proceed. These amendments are probing, but the gist of what we are trying to achieve is set out in a combination of Amendments Nos. 7 and 4.
I am grateful to my noble and learned friend Lord Lyell for explaining why we would not want to support the amendments. However, I accept the point made by the noble Lord, Lord Razzall, that these are very much probing amendments. From that point of view, I offer the noble Lord a little support and remind him—and, in doing so, remind the Government—that the Government introduced something of the order of 20 amendments at Report and Third Reading in another place, which were inserted into the Bill without any discussion and without any explanation from the Government about what they were about. For that reason, we shall move some amendments later to remove parts of the Bill as it was amended, purely to give the Government an opportunity at this rather late stage to explain exactly what they were doing in another place when they amended the Bill. I remind the Government, too, that time was not particularly pressing for the Bill in another place, and they have a duty when they amend Bills to explain what they are about. For that reason, I am grateful to the noble Lord, Lord Razzall, for introducing these probing amendments, even though, as my noble and learned friend Lord Lyell said, we cannot agree with their substance.
Perhaps I could say what has been worrying me about Amendment No. 4. The words that it adds to Clause 1(1)(b) would defeat the whole purpose of the Bill, which is to confine corporate manslaughter to cases of gross negligence. Gross negligence has been discussed in many cases, going back over many years. Unlike the noble and learned Lord, Lord Lyell, I have the names of the cases in front of me, so I have not forgotten them—they are Bateman and Andrews, in which there was much discussion about whether gross negligence or recklessness was the right test. Those problems were resolved, happily, in a case before the House of Lords called Adomako, which says that gross negligence is the right test for corporate manslaughter. It went on to say what has been said for many years—that gross negligence requires something more than would be necessary to establish civil liability. The problem with the words that the amendment would add is that they substitute a test for ordinary liability in negligence and therefore undermine the basic difference between ordinary negligence and negligence which is necessary for manslaughter.
I really cannot accept the noble and learned Lord’s point, which would apply equally to Clause 1(3). As I indicated to the noble and learned Lord, Lord Lyell, we are simply deleting subsection (3) and providing a different test. It has nothing to do with the definition of gross negligence; it is to do with the additional requirement that has to apply for corporate manslaughter to apply in a particular situation. I accept that the drafting may not be felicitous, but the noble and learned Lord is not correct about the point that we are making.
I heard the noble and learned Lord, Lord Lloyd of Berwick, ask what the amendment adds. I have been concerned throughout this affair to discover exactly what it does and how you define it. When you come to definitions, Amendment No. 4 cannot stand. It contains the phrase,
“exercised by those at senior management level”.
I would not waste the time of the Committee by saying much more about that.
I suggest that there is merit in the thinking behind the amendments of the noble Lord, Lord Razzall, partly because the precise formulae and mechanisms of the Bill as it stands were materially altered by the Government in another place. Without going into the history of that, these amendments question whether we have quite got it right. I understand entirely what the noble and learned Lord, Lord Lloyd, says about gross negligence and manslaughter. Indeed, I would not dare suggest that his list of authorities is in any way deficient. I merely remark that, for civil lawyers as great as Lord Justice Scrutton, “gross negligence” was a very curious phrase—he called it negligence associated with a vituperative epithet. Criminal lawyers have gross negligence pretty well moulded in their hands. With respect, I do not think that that is the problem, although I recognise the amendment’s drafting problem that the noble and learned Lord addressed.
The Bill is essentially supplanting the old test of directing mind and will, which is required for corporate liability as the law stands. That gives rise to the question of whether the test before us is right in the way that the noble Lord, Lord Razzall, suggested. At the moment, we have to find that some gross error on the part of senior management, as defined, is a substantial element in a causative sense of the death that has occurred and that the other requirements of the Bill are manifest.
There is a problem not only with the amendment, but also with the Bill as it stands in this respect. Unless the failure required for liability is properly framed—and we should remember that it has, by hypothesis, caused the death of a person or persons—it will be easy for those who control small or giant organisations to delegate the issue of safety down to a level other than their own. It is not sensible to allow that without careful conditions, and the Bill might benefit from the approach suggested by the noble Lord, Lord Razzall. The noble Lord mentioned the Centre for Corporate Accountability, which has done a great deal of work in this area. It suggests that the Bill, even as it stands, allows for delegation of issues of safety to some medium or even low level. That would not encompass liability for manslaughter, even if a large number of deaths occurred through failure of the management organisation. Safety is a central issue, which the board of directors and those at a high level should consciously address every time they meet.
Whether the Bill provides for that is something that the amendment tabled by the noble Lord, Lord Razzall, brings before our eyes. Noble Lords should think carefully about the issue of delegation and whether senior management or directors should be allowed to delegate and escape liability for the corporation. I am not sure that the approach of the noble Lord, Lord Razzall, would not make it more difficult to delegate than the Bill now allows.
I hope that the Committee will forgive me for intervening again briefly. There is a great deal of force in what the noble Lord, Lord Wedderburn, said. We are expressly asked to consider whether organisations can avoid their responsibility or their liability under the Bill by delegating down. I am still thinking about it, and I am not convinced that it would work. Having declared my interest as chairman of a large school, I would not feel happy if we delegated down to some low-level person within the organisation. I would not feel at all happy that we had fulfilled our duty. Questions of health and safety go right up to governing bodies, and we might find ourselves in great difficulty in court. I am not certain that those who are pressing these amendments are correct in their worries.
On Amendment No. 4, I accept the rebuke from the noble and learned Lord, Lord Lloyd, for not having the case instantly at my fingertips. The case is Tesco v Nattrass. Mr Nattrass was my client on several occasions. He was a very effective trading standards officer and wonderfully litigious. That case gave a let-out to a large company if it has set up a proper system, but somebody more junior has not followed it, so long as it has reasonable control. I am not sure that we should get into all that. I would ask the Minister to think carefully about it, but I think that at the moment we should be cautious in going down that route.
I, too, have been troubled by this aspect relating to senior management, for the same reasons as the noble Lord, Lord Wedderburn. There is merit in what the noble and learned Lord, Lord Lyell, said about whether delegation would work; I rather suspect that if I was advising a client, I would not suggest that he did that. However, I am troubled by what might happen where there is a certain obfuscation of lines of responsibility and senior management simply fail to take decisions about where lines of responsibility for safety lie.
I ask the Government to look carefully at the issue of senior management. I am thinking of decisions taken by foremen in the course of ordinary day-to-day business, and whether the foreman has been given the right training, level of responsibility and resources to enable the employee to carry out in safety the work tasked to him or her. If something happens as a result of decisions not being taken at a senior level, it would be right to hold the organisation responsible. But this is something that needs to be teased out, and I ask the Government to consider the matter.
I have listened to this debate with mounting concern, because I see this from the point of view of how it is all going to work in a realistic boardroom and not the ideal world that appears to exist in your Lordships’ imagination in this debate. It does not happen as noble Lords think it does; there is not usually the formality of everybody’s preconception that they have clear delegations of authority. I have gone through the 13 case studies on my list to see which if any of them might occur in the situations that we have discussed. I cite my case F, which relates to the third fence on the back straight of Cheltenham race course. Noble Lords must bear with me, as the example does work.
The back straight of Cheltenham race course has an incline with three fences. At certain times of the year, the horse and rider come straight into the setting sun as they go over the top fence. That fence has caused fatality in the past. Of all the cases on my list, this is the one that you can say with great certainty will occur again at some time in future, because you cannot take the sun out of the sky. But you can doll the fence off, so there is a delegation of authority to the groundsman to do that. He remembers to do that perhaps three times out of five; on the other occasions, you just hope that the rider and the horse are bright enough to get over the fence without injuring themselves.
In that case, you would go for the authorities running the Cheltenham race course for having failed to doll off and having caused manslaughter, but they would say that they had delegated that task to the groundsman and that he did not do it. His defence would be that he had not been properly trained; he had not been told the full significance of the task and had no experience of such an incident happening previously, so it was a failure of the board for not having instructed and trained him well enough.
That is a straightforward and easy case for that race course, but a similar principle will run through the argument every time there is an attempt to say that such incidents are down to delegation. The delegated party will claim that he has been inadequately trained for the task, while the board may say that he has failed in his delegation or that he had no delegated authority and acted outside his authority, either in being deficient in not doing something or in being overzealous in doing it the wrong way.
We need much greater clarity than we are getting close to providing here. If your Lordships in this debate have such trouble in defining this point, how on earth will a board interpret the Bill when it becomes law so that it can serve—as the noble Baroness, Lady Scotland, said at Second Reading—to save lives? It will not do that; it will just cause more confusion. We must get greater clarity so that the Bill can be understood by all its ultimate users in practice when it becomes an Act.
The creation by this House of a new offence of unlawful killing is a very serious step. The caution mentioned by the noble and learned Lord, Lord Lyell, and the contributions of my noble friend Lord Wedderburn and my noble and learned friend Lord Boyd will have indicated, I am sure, to the Minister that we are concerned that this clause as it stands or as amended should not become the same source of legal debate as has led to the unfortunate results of prosecutions in the past 10 or 15 years. It would do Parliament no good to enact yet another such saga into our criminal law. I submit to your Lordships that the two tests that we shall be applying to the clause as it stands and to these amendments are, first, whether there is created an offence that fairly and reasonably attributes criminal liability to a corporation, and, secondly, whether, once drafted, it can be effectively prosecuted.
I draw the attention of the Committee to the fact that at the moment the corporate manslaughter cases that have failed have done so mainly because it was impossible to show that there was what is called a directing mind over different components available to one—there was no directing mind that could be identified in the company structure that would found a fair attribution of criminal liability. When this offence, in its final form, goes to my colleagues at the Bar and to the solicitors’ profession, the first thing that they will say is, “How does this differ from the ‘directing mind’ test?”. That test helps corporations; there have been many acquittals because of its difficulties.
The noble Lord’s amendments illustrate the concern that we should be prepared for legal dissection of the clause with passionate intellectual intensity. Let me give some examples, which the amendments of the noble Lord, Lord Razzall, seek to avoid, and very nearly successfully do so. What is the difference between “directing mind” and “senior management”? Here the test of the offence requires involvement of senior management and, lest we forget, “senior management” is defined in Clause 1(4) as,
“persons who play significant roles in—
“(i) the making of decisions about how the whole or a substantial part of its activities are to be managed”.
Take a national construction company with 10,000 employees. That definition immediately restricts the senior management test to the ones on top—those who command the whole or a substantial part of planning or management and who are supposed to deal with safety. What is the difference between that and the directing mind? The Government have to consider that.
On delegation, the noble and learned Lord, Lord Lyell, was hoping that no one could get away with saying, “I delegated it”, but why not? A company exists to delegate its functions down the line in order to make the exercise of its activities for shareholders effective and profitable. The only way in which one will catch delegation is in Clause 1(3), by being able to show that the way in which senior management dealt with the activities of the company was,
“a substantial element in the breach”.
That is an extremely nebulous phrase. It possibly goes backward a step. First, one has to get over the effect of a directing mind; if one has shown that there was such a directing mind in senior management, the way in which senior management had done things would then be an additional factor to be proven.
Like the noble Lord, Lord Razzall, I wonder whether we ought not simply to consider deleting the word “senior” from subsection (3). If we do not, we must consider what the provision adds. If we do, why should we not simply delete subsection (4)(c) as well in due course? I do not suggest that we do that now, but I am convinced that the trade unions that represent people in the construction industry will be very concerned about the fact that what the ordinary worker does in his daily activities is the responsibility of the company, and not of its senior management or directing mind, provided that the company is held firmly liable.
These are very serious matters. I am grateful to noble Lords for the patience that they have shown in listening to me. Prior to Report, I hope that those who are interested in this matter can seek to come to a definitions section that accords with the wishes of all.
As I have spoken once or twice on this matter, I shall make only a brief intervention. The noble Lord, Lord Brennan, put his finger on a tremendously important point. I am not sure that I want to go down the route that he suggested, but will the Minister ask the Attorney-General to place in the Library the report—I vividly remember it because I was Attorney-General at the time—of what was said in open court by the judge in the “Herald of Free Enterprise” case? Of all the cases that have been bandied about in the context of this Bill, that of the “Herald of Free Enterprise”—I am not for one moment saying that anyone was guilty; they certainly were not guilty under the law at that time—provides a pretty good benchmark of where we might be going. If those papers could be put in the Library, and we were to hear the views on them of, for example, the noble Lord, Lord Brennan, that might assist our debates.
I have listened with great interest to this debate. As ever, the lawyers have set my mind working on how best we can respond. Obviously, some concerns about the drafting have been expressed, which we well appreciate. I shall try to set out as fairly as I can the Government’s thinking on this matter. As the noble Lord, Lord Henley, said, there was not perhaps as full an opportunity in another place as we would have liked to explain why the Government had made their amendments. I shall take us through some of those reasons and try to address some of the issues that have been quite fairly raised today. The amendments certainly go to the heart of the new offence. It is important to make clear how the Government intend the new test of liability to work. We are grateful that the amendments have been tabled to enable us to set out our intentions.
The current law fails because it requires the full fault in a case of corporate manslaughter to be found in one individual. This simply cannot reflect the way in which decisions are made in modern organisations, other than in very small ones, which is why only very small organisations have ever been convicted under the current law. The intention of the new test, as I am sure all Members of the Committee will understand, is to ensure that all the circumstances that led to the death can be put before the court, rather than just the actions of a single individual.
We want the new test to ensure that gross failures that are properly the responsibility of the organisation can form the basis of liability, but we want also to ensure that not every work-related death will result in a conviction for manslaughter, even where there has been gross negligence by some individuals. For example, companies should not be blamed where individuals have behaved in grossly negligent ways outside good and safe processes. So the test must properly capture corporate failures, not individual ones.
The new test in the Bill is the Law Commission’s test; it introduces an entirely new way of attaching criminal liability to corporations based on failures in the way activities were managed or organised by the organisation. In looking at how an activity was managed or organised by the organisation as a whole, the prosecution would have to examine how the activity was being managed at all levels, including the senior level. Without further amendment, we doubted that gross negligence would be found in the organisation overall unless there were failures at the senior level, but we were concerned that this was not clear in the Bill.
The Law Commission noted that there would be a somewhat fine line between an employee’s “casual” negligence and a management failure. We were concerned that such a fine line was not acceptable in a criminal offence as serious as manslaughter, and that organisations should be clear about the circumstances in which the offence might bite.
To address this, we put the requirement in the Bill that there was a failure at the senior level. We think that this is important because we believe that without such clarity the offence could lead to risk aversion; we also think that it is right in principle that organisations cannot be guilty of corporate manslaughter without fault at the senior level.
One of the key concerns of employer organisations is that, despite the good and conscientious management of health and safety by senior managers, somehow their organisations may be found guilty of corporate manslaughter. A key reassurance has been this part of the Bill. Organisations want to be sure that, if they are managing health and safety properly, they cannot be found guilty of the offence. Making the offence contingent on fault at a senior level sends a powerful message about the importance of good management high up, and most organisations will respond to that positively.
There has been much discussion about delegation. I should like to make an important point about this, which has been raised in another place and raised again here. We need to distinguish between the delegation and the abdication of responsibility. What is not acceptable is the abdication of responsibility for health and safety—I think that we are all agreed on that. I fully support the sentiment behind the amendments aimed at ensuring that organisations are not able to abdicate health and safety responsibilities to avoid liability for this new offence. We would be very concerned if the Bill made that a possibility, or, worse—as has been suggested—actively encouraged some organisations to delegate inappropriately.
The Government recognise the importance of health and safety being led from the top of organisations. The noble Lord, Lord Razzall, made that point at the outset. At the same time, they do not want organisations to believe that no management of health and safety can be delegated. Appropriate delegation and appropriate supervision of such delegation is part of the proper management of health and safety, a point made by the noble Lord, Lord Brennan.
However, inappropriate delegation of health and safety responsibilities will not be a legitimate defence to a charge of gross negligence. The courts will be able to consider how the activity was managed at senior level, and if the answer is that those at senior level failed to manage health and safety appropriately in respect of the activity, that will be potent evidence of failures at that level.
There may be organisations that bury their head in the sand and erroneously believe that the way to avoid the offence is simply to delegate responsibility out of the boardroom entirely. But those organisations are taking the gamble to abdicate responsibility and risk liability versus having the certainty of avoiding liability through managing health and safety properly at a senior level.
We believe that this also supports the Government’s position that health and safety should be led from the top. Only those organisations in which senior management are taking health and safety seriously can be sure of avoiding liability for this offence. We believe that it is right that, if such people have been managing the organisation well, the organisation as a whole should not be guilty under the new offence. That should be true regardless of the size or structure of the organisation.
I realise that I have spent some time setting out how we see the test working and what we see as its benefits, because it is important to be clear about these early on. This also explains why we have included the requirement for fault at the senior level in the test for liability. I now want to explain briefly why the amendments of the noble Lord, Lord Razzall—although an attractive alternative way of achieving a similar goal—should not be accepted by the Committee. They would base the test for liability on a potentially low degree of fault at the senior level and would offer little reassurance to organisations that they would be able to control liability for the offence through senior management. This is because, in hindsight, it could probably always be said that the senior management could have done more and, given a tragic death, a jury may consider that it would have been reasonable to expect them to have done so.
The approach of the amendments has some resonance with the Canadian law of criminal negligence. In that jurisdiction, the law requires both negligence by officers acting within the scope of their authority and a failure by senior officers who had responsibility for supervising that part of the company. The test there is not that a senior officer was not duly diligent, however, but that the standard of care departed “markedly” from what could reasonably have been expected in the circumstances. So there is a recognition there, too, that corporate liability should not be engaged without a serious failure at a senior level in the organisation.
There is a balance to be struck in how much fault should be required at a senior level for the offence to have effect—so that the test is workable—without making conscientious organisations risk averse, so that they are able to operate in the knowledge that, if senior managers are taking health and safety seriously, they have nothing to fear from this offence. We must remember that the offence is aimed at companies that show gross disregard for the safety of people affected by their work. As a result, we have proposed a test that requires a substantial element of the gross breach to have been at the senior level.
I hope that I have persuaded the noble Lord, Lord Razzall, that our formulation is workable and fair, and dealt with some of his doubts about whether to press his amendments. I shall of course study the comments of all noble Lords carefully to ensure that we do not have the obfuscation to which the noble and learned Lord, Lord Boyd, referred—I recognise that that is important.
The noble and learned Lord, Lord Lyell of Markyate, asked about the “Herald of Free Enterprise” papers. That was the subject of a public inquiry and public comment, of course. We are happy to check that the Library has a copy. The noble and learned Lord’s question was more specifically about the Attorney-General’s papers.
I have specifically in mind the judgment in open court of Mr Justice Turner when he stopped the case on the ground that there was no sufficient evidence. He explained his reasoning, and it would be helpful if we could look at that and test the Bill against it.
I shall obviously read the Minister’s comments with care. My initial reaction is that the Government have not quite got this right. I am not sure that the Minister’s remarks justifying the test set out here deal either with the point of the noble Lord, Lord Wedderburn, about delegation, or my point about systemic management failure. I suspect that the noble Lord, Lord James, would say that the test certainly does not meet his point. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3: Clause 1, page 1, line 4, leave out “or organised”
The noble Lord said: The debate continues. We are trying to understand how the Government are approaching the identification of where the responsibility lies. My noble friend Lord James of Blackheath has greatly assisted the Committee by reminding us that there are true-life examples that we have to test. My noble and learned friend Lord Lyell is right in saying that we should remind ourselves why the case that he mentioned was stopped, so that we can see whether this legislation will meet the point. We must think carefully about all the practical cases that my noble friend suggested, and reflect on the extent of the responsibility and how it is defined. The noble Lord, Lord Brennan, knows full well that very clever legal minds will apply themselves to the legislation, but I reckon that we have cleverer learned legal minds in this Committee and that we can ensure that what we enact will stand the test of time. It should also stand the test of those clever legal minds that will be applied to find some way around these carefully thought-through definitions.
So it is that we move to Amendment No. 3. When I looked at Clause 1(1), I could not quite understand why the Minister and his colleagues had put in the phrase “or organised”, because we had been focusing on management. At the moment, the offence is clearly set out that an organisation,
“to which this section applies is guilty of an offence if the way in which its activities are managed …
(a) causes a person’s death, and
(b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased”.
But I have omitted the words that my amendment would remove. The Government have felt it necessary to say,
“the way in which its activities are managed or organised”,
which draws into the whole question of the offence the organisation of the company. I would love to know what exactly the difference is between the way the company’s activities are organised and the way they are managed, because again I detect that very careful minds will be focused on this phraseology. Can the Minister explain what lies behind the Government’s wording? I beg to move.
I support what has been said. Would my noble friend indicate whether he can rely on any precedent for the words “or organised”? I cannot think of any, but that does not really matter, because I do not have the burden of carrying this Bill through Parliament. But it is incumbent on my noble friend to express a view about this point and I am grateful to the noble Lord, Lord Hunt, for drawing attention to it.
I am very grateful to the noble Lord, Lord Hunt, for raising this point—and I shall not play the buffalo test of looking at somebody and meaning somebody else. In connection with the Prison Service, I find it extremely helpful that references to both management and organisation are included in the clause, because the Prison Service lacks proper management structure and an organisational structure that goes with it. For example, if a young person died in custody in a young offender establishment, it would be the management of the establishment that came under scrutiny first of all, and then the management of the Prison Service as a whole. But you would expect that in the management of the Prison Service as a whole there would be someone who was responsible for all young offenders. Therefore, it could be said that the organisation of the Prison Service was wrong in not having a management structure that enabled that proper chain to be established. So, in the case of that service, I feel happy with the wording, although I am not a lawyer.
I will try to clarify the issue and explain where the phraseology comes from. The amendments would change the test of liability from failures in the way an activity was managed or organised simply to failures in the way it was managed. I can reassure the noble Lord that I do not consider that a significant issue is involved here, but I will explain the thinking behind the drafting. It is very simple.
The intention is for the new offence to capture failings in the strategic management of activities where there were inadequate systems or practices in the organisation as a whole. I think that the noble Lord, Lord Ramsbotham, was concerned about that; he appeared to be happy with the wording as it was because he thought that it properly captured the focus of our concerns in the Bill.
For us, this is the type of failure that the Law Commission described in its work on corporate manslaughter, which was based heavily on the employer’s duty to provide a safe system of work. The Law Commission characterised this in terms of,
“a failure to ensure safety in the management or organisation of the corporation’s activities”.
We have simply followed that approach, thinking that it was the right thing to do. As shorthand, this has been described as management failure. While the word “managed” is probably sufficient to cover all the kinds of behaviour that we are concerned about, there is a possibility that, for example, the way a process for carrying out an activity was designed would not be considered the management of that activity. We are trying to ensure that we capture that properly.
Similarly—this is a graphic reflection—one may say that the layout of a factory floor might not necessarily be regarded as part of the management of that activity. We would not want gross failures to ensure a safe working environment to be exempt from the Bill because the word “management” was interpreted too narrowly. People have been looking for greater breadth this afternoon so that we properly capture the activity that we are concerned about. To avoid this risk, the test refers to both the management and the organisation of activities. I hope that that satisfies the noble Lord’s concern.
That takes us away from the purpose of this part of the Bill. In a sense, we have covered some of that ground already. This is talking about liabilities concerning management organisation issues. I am resistant to that idea, but we will reflect on what has been said. I hope that my explanation has answered the points raised by the noble Lord, Lord Hunt.
I am grateful to the noble Lord, Lord Clinton-Davis, for his support and to the noble Lord, Lord Ramsbotham, for his explanation of why he feels that the words are necessary. I was very interested in what the Minister said. In many ways, he is reflecting on my concern with regard to strategic management failures. I would have expected him to say that what we are doing here is including strategic organisational failures.
There lies the problem. Are we dealing here with a disjunctive or a conjunctive “or”? Do we state in the Bill, “the way in which its activities are managed and organised”, or just,
“the way in which its activities are organised”?
This is why I raised the question and why the noble Lord, Lord Clinton-Davis, is still a little unsure exactly what the Minister is saying. Those who are responsible for the organisation might be completely different from those who are responsible for the management. We want to make sure that any alternatives that we use are true alternatives and that we are dealing here with disjunction rather than conjunction. We need to be sure that, where alternatives exist, they will not enable people to say, “Oh, well, that doesn’t apply here”.
My noble friend Lord James of Blackheath urged us all at Second Reading to make sure that the legislation is simple and easy to understand. I rather liked his observation that it should be sufficiently simple to be understood in the boardroom—I do not think that he said quite that; the boardroom is normally a place where intelligent people reside. Nevertheless, when one is enacting serious consequences for particular actions, it is important that the legislation is easy to understand.
I and my colleagues on the All-Party Group on Occupational Safety and Health hope that the Bill will deliver a completely new sense of responsibility for health and safety. Over a number of years, health and safety has been delegated; it has become the responsibility of someone else. It has not been felt to be of critical importance in the boardroom. That is where we want the responsibility to be felt. I do not want to see circumstances in which some other group of people is responsible for the organisation of the factory floor, to take the Minister’s example. I do not want to see the responsibility shifted into a vague morass somewhere else. We want it to be clear and simple. As soon as one inserts the word “or”, one starts to complicate matters. If we are dealing with strategic management failures rather than strategic organisational failures, we should confine the wording to “managed” and not introduce the alternative of “organised”.
I am not quite sure that the Minister has convinced me—I probably speak also for the noble Lord, Lord Clinton-Davis—but we shall carefully reflect, in particular on what the noble Lord, Lord Ramsbotham, said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 4 to 8 not moved.]
9: Clause 1, page 1, line 21, leave out “far”
The noble Baroness said: This is a simple amendment. I hope, therefore, that the Minister will be persuaded to accept it. As the clause stands, it states that,
“a breach of a duty of care by an organisation is a ‘gross’ breach if the conduct alleged to amount to a breach of that duty falls far below what can reasonably be expected”.
We are talking about a death; somebody could have died. Therefore, are we going to have an argument about whether the breach of the duty had fallen far below or not far enough or too far? It should be sufficient simply to say that the breach of the duty falls “below” what can reasonably be expected. “Far” is not only redundant, but could lead to a lot of quite unnecessary argument. I beg to move.
I greatly regret that I have to oppose the amendment. Without the word “far”, the subsection would read as the test for an ordinary action for damages for negligence. The whole purpose of the word “gross” is that there must be something more than that for the criminal law of manslaughter. The word “far” is critical here in the definition of “gross negligence”. Without it, for example, liability for corporate manslaughter would occur far more frequently than liability for ordinary cases of manslaughter. We cannot have different tests for manslaughter by individuals and manslaughter by companies.
It is a question of language. I very rarely wish to dissent from a proposition of the noble and learned Lord, who has risen to the status of a Law Lord, except in my academic writings. But today I must issue a powerful dissent from what he says about the meaning; we just need to apply the simple golden rule.
It is being said that before a jury finds that a breach of care has occurred in such a way as to make the organisation liable, it must find that what was done fell far below what could reasonably be expected of the organisation in the circumstances. The Bill has already defined the level of duty as that which bounds gross negligence, so you can reasonably expect that the organisation will not fall below the level of gross negligence.
Perhaps noble Lords will imagine themselves as a jury and that they have put to them that there is a case to answer on a breach of the duty of care by gross negligence by senior management, which is a substantial element of the activity. They should think, as the noble Lord, Lord Brennan, suggested, about how near we are getting to the old directing-mind-and-will test, to which, as he rightly said, trade unions in this country violently object, having seen the death of many of their members and the public. We are getting very defensive, apart from the old directing-mind-and-will test, and the Government have been defensive enough.
But then a further test is added. The jury is told, “Yes, there is a case for you to consider whether this was gross negligence as a breach of duty, and you also have to consider whether the activity fell far below the level that has already been defined”. With the greatest respect, that is not the civil duty that the noble and learned Lord suggested has been imported into the Bill. As someone whose main interest has been the civil and not the criminal law, I bow to those who are concerned with the criminal law, but the duty has been defined as the bound of gross negligence. Now, the jury is to be asked a second question: did it fall far below what should be expected, given what has already appeared in the Bill?
I imagine myself walking along a cliff in the sun with noble Lords and some of them stumble and fall. The noble and learned Lord, Lord Lloyd, manages to catch hold of a bough of a tree. Below that, the noble and learned Lord, Lord Lyell, manages to clamber on to a rock so as not to fall, but, unhappily, the noble Lord, Lord Hunt, falls to the bottom. In considering those events, it is clear to a jury that the noble Lord, Lord Hunt, has fallen far below the safety level. The same might apply to the noble and learned Lord, Lord Lloyd, but perhaps not so clearly, and the noble and learned Lord, Lord Lyell, is arguably far below. Can the Committee imagine a jury wasting hours and hours arguing about whether what has happened has involved falling below the level of duty that the Bill imposes? It is nonsense.
A man and woman have died and to make liability depend on whether the act of omission by the senior management, closely defined, was a substantial element and whether it was gross negligence—and to add to that a test whether the noble and learned Lords on the cliff had fallen far below when they rescued themselves would be nonsense. It really is quite absurd to think that juries will not return bizarre judgments on such a test. They will go to your Lordships’ committee, as I still call it, or to our new Supreme Court and have another list of cases, not to define whether this death was something for which someone should be responsible but whether the poor chap fell far below the level of the cliff.
The noble and learned Lord says that—and if that is what the Act told the judge to do, he would have to do it, although I would not like him to have to do it because the poor chap would then have to define “far” for the jury. How would he do that? It is no good the noble and learned Lord lifting a hand as if this was preposterous. You cannot define “far below”, although you can try to define “below” and what it is below is not the civil duty but the criminal duty of care, which is already imposed by the Bill.
Of course, advocates will say in court, “This case falls far below the duty that is imposed”. But to make that into an absolute legal case is, in my submission, adding a further conservative element to the Bill, which is already conservative enough and should, if anything, move in the direction of the amendment proposed by the noble Lord, Lord Razzall. Those who want to confine it more and more will be seen to do so by those who have been interested in these enormous inquiries into the “Herald of Free Enterprise”. I do not want to go into the facts of that case, but all noble Lords know that it has been a terrible abomination in our country that no one has been called to answer for death upon death. If we go on confining the Bill, this House will not be seen as a responsible body in our society.
I am delighted with the analogy given by the noble Lord, Lord Wedderburn. My mind was led to the later acts of King Lear and Beachy Head—the noble and learned Lord, the noble Lord, Lord Hunt, and I falling down that great precipice that the almost blind king was looking at. But to get our feet back on the ground, if we look at Clause 1(4)(b), all that we find is an absolutely standard definition of gross negligence. The question that the noble Baroness, Lady Turner of Camden, rightly raised, because it is a very important question that we must answer correctly, is whether the standard for manslaughter should be negligence or gross negligence. If it is gross negligence, it would have to fall far below.
I shall give a homely example. The noble Baroness—and, indeed, we—at home have vacuum cleaners. Occasionally someone will leave the vacuum cleaner in a slightly unfortunate place in the hall or some other room and people trip over it. That is probably negligent, if it happens—although it probably does not happen in the noble Baroness’s house, because she would not be so stupid. But I could easily be.
This issue is very important; we are talking about a situation which could confront juries at any time. Imprecision is to be avoided if possible. Where can the noble and learned Lord cite any precedent for the words to be included here which he advocates?
The noble Lord is right that this is very important. I am simply advocating that the Bill should remain exactly as the Government have drafted it in this respect. I was seeking to explain the difference between ordinary negligence—which is only too common—and gross negligence. Somebody leaving something by accident so that someone trips over it and very sadly breaks their neck is a very long way from gross negligence, although it rightly gives rise to civil liability and rightly does not normally give rise to criminal liability. The noble Baroness is saying that because of the disastrous consequence of death, ordinary civil liability tests should be enough to make you guilty of manslaughter. I hope that on reflection, the Committee and the House will not take any such view. The Bill is exactly right here.
I entirely support what the noble and learned Lord, Lord Lloyd, says in this respect. This is a standard definition of gross negligence, which is what it purports to be. While I completely understand the many tragedies which seem to have gone unpunished and which underlie the pressure for the Bill, we should not move away from standard definitions of our law. That is what we would be doing if we removed the word “far”. I hope that we stick with the Bill as drafted in this respect.
I have not spoken before and I hate to come in when the lawyers are having such fun and telling stories that could perhaps be told at other times. However, I bow to their knowledge. I want to back up what my noble friend Lady Turner said. We are concerned about the consequences in relation to the person who has died. We are also concerned not to hinder the carriage of justice. It has been explained to me that this would be the normal and standard way of doing it. I am listening very carefully to what has been said, and I want us to bear in mind that we are dealing with people who unfortunately have lost their life.
Perhaps I can assist in this matter. I think I heard the noble Lord, Lord Wedderburn, say as an aside to his noble friend Lady Turner that this was not a matter of law but purely of language. The noble Lord then gave what I think we would all agree was a great lawyer’s speech. If we can get back to the language that the lawyers—particularly my noble and learned friend—have used, it is obvious that deleting “far”, as the noble Baroness suggests, would mean that virtually any active negligence would lead to liability for prosecution. That seems excessive. I therefore hope that the Government will stick with their wording and not be seduced by the suggestion of the noble Baroness and those who support her that the word “far” be removed.
Does the noble Lord agree—and this is relevant to what other noble Lords have said—that the standard of care is set by Clause 1(4)(b)? It gives us an explanation of what is meant by gross negligence and tells us that the breach has fallen “far below”—I would say below,
“what can reasonably be expected of the organisation in the circumstances”.
What can reasonably be expected of the organisation in the circumstances is the duty set by Clause 1(1)(b). It is no good for noble Lords to say, “Oh, this is a question for lawyers” or “It is not a question for lawyers”. It is a matter of common sense. The word “far” limits the liability further.
I think that the words that he omits for consideration are those that precede it. The paragraph reads,
“‘gross’ breach if the conduct alleged to amount to a breach of that duty falls far below”,
or “falls below”. What is wrong with the words “fall below” in those circumstances?
I hesitate to interrupt because there are lawyers on both sides. I am sure that the noble and learned Lords, Lord Lloyd and Lord Lyell, do not require any assistance from me on this matter, but, in my submission, it is absolutely clear that under Clause 1(1)(b) an organisation becomes guilty if, through the management or organisation, it causes a person’s death and that amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased. You then go to Clause 1(4)(b) to find out the definition of what amounts to a gross breach of a relevant duty of care. It is a fairly standard matter of legal interpretation. A breach of the duty of care becomes gross because it falls far below the standard that can reasonably be expected. The word “far” is vital to the concept of this offence. The noble Lord, Lord Henley, is absolutely right. If you take out the word “far”, the action of negligence is then elevated to criminal liability. It seems to me that this amendment drives a coach and horses right through the whole concept of the Bill.
I hope that noble Lords will forgive me as this is the first time that I have ever set foot in a Grand Committee and I am unfamiliar with the protocols and procedures. In listening to the debate, I can think only in terms of what I would do now if I were sitting in a boardroom having to make a decision which had a bearing on this issue. I would not be able to rate the failure of care on a scale of one to 10, and I would not know where I had fallen below if I rated it as three, five, six or seven. However, I would guide members of my board in deciding whether they should take some action which carried a risk and I would consider whether, as a result, we were placing an individual in the company’s employment in harm’s way. That is the missing element in this debate. The question is not the degree of risk attaching to the matter in the abstract; it is specifically whether any individual decision places an employee or employees or the public in harm’s way.
I am critical of the wording as it is drafted because those words have not appeared anywhere in the Bill and, as I said at Second Reading, they are the missing words which will have a great deal more significance for people in understanding their responsibility in a boardroom when they come to live with this legislation in years to come.
Perhaps I may trespass on the goodwill of the Committee for a moment. In this Bill, we are adapting the ordinary law of manslaughter to companies. The amendment would change the ordinary law of manslaughter from that requiring gross negligence, defined as something falling far below the ordinary standard of care, and make, for some reason, companies more liable than ordinary individuals. We cannot amend the ordinary law of manslaughter in this Bill.
I have been somewhat entertained by the lawyers on this, but I think the majority of them have got it right. The noble and learned Lords, Lord Lloyd, Lord Boyd and Lord Lyell, and the noble Lord, Lord Henley, are all in the right ballpark. As the noble and learned Lord, Lord Boyd, said, the offence is in line with the current offence of corporate manslaughter, which is about gross failings causing death.
For an offence as serious as homicide, the threshold for the offence should be high: a gross breach of a duty of care. A “gross breach” is defined in terms of conduct that falls far below what reasonably could have been expected of the organisation in the circumstances. “Far below” is a way of describing “gross”, and is not an additional factor. The duty does not import a requirement of grossness; that is only achieved through the use of “far”, the definition of what is gross. Going back to the practicality that the noble Lord, Lord James, was wishing upon us, it is a test allowing, perhaps not boardrooms but, more importantly in this instance, juries to compare the actual behaviour with what could reasonably be expected. It ensures that the breach is not a simple case of negligence but is truly exceptionally bad.
If we were to remove the requirement that the conduct fell far below what could have been expected, then an offence could be made out on the basis of negligence alone. That would mean that the threshold for the new offence would be the same as that for health and safety breaches. That is not our intention, nor that of the Law Commission. The intention with this offence is to mark out and label companies that have shown utter disregard for the health and safety of those affected by their activities and, as a result, caused a death. We do not want companies to be guilty of homicide on the basis of minor breaches of health and safety legislation or when genuine efforts have been made, but the appropriate standards have not quite been met. That would devalue the significance of the offence, and impact upon boardrooms taking these issues seriously and ensuring that that is reflected down their organisation. For those reasons, I ask the noble Baroness to withdraw her amendment.
First, I thank all noble Lords who have contributed to a most interesting, and sometimes amusing, debate. I am by no means convinced by the lawyers who have spoken against our amendment. This is a new Bill, and creates a new offence. I speak as a former union official when I say that we have wanted a Bill like this for a long time. On the other hand, we want to ensure that it has sufficient bite. Our concern is that if we leave “far” in the text of Clause 1(4)(b), it will be more difficult to pin down liability. We are talking about something which everybody knows is serious: an offence that has resulted in a death. It is therefore obviously a matter of considerable concern to everybody involved. That is why we wanted to press ahead. However, I will carefully consider what has been said this afternoon and, in the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 10 not moved.]
11: Clause 1, page 2, line 1, leave out “substantial” and insert “significant”
The noble Lord said: We continue the debate on the meaning of “senior management”. As other noble Lords have pointed out, the definition of these words is exceedingly important: we have to get the wording of this new offence exactly right.
Amendment No. 11 relates to subsection (4)(c) concerning the definition of “senior management”. At the moment, the definition is,
“means the persons who play significant roles in … the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or … the actual managing or organising of the whole or a substantial part of those activities”.
The amendment would leave out the word “substantial” and utilise the word “significant”. Thus, it would change the subsection to read, “‘senior management’ … means the persons who play significant roles in … the making of decisions about how the whole or a significant part of its activities are to be managed or organised, or … the actual managing or organising of the whole or a significant part of those activities”. Definitions are important. As I have the honour to be chairman of the English-Speaking Union, I have to take care to get my terminology right.
Whenever our wonderful English language has been in competition with other languages, it has just absorbed them, and therefore thousands of words in the English language are not our words at all, but have been taken from other languages. In order to win a battle, it is always a good idea to absorb the other side into your team. Latin is the derivation of both these words. “Significant” comes from the Latin word “significant”, or the present participle “significans”. It means that something has meaning, but is likely to have influence or effect. It is quite a mild word and, therefore, putting it in place of “substantial”, which is a stronger word, would catch more potential offenders than would the Government’s present wording. “Substantial” comes from the Latin “substantialis”, which, in effect, means “having substance”; it is not imaginary. You find the word “substantial” many times in Shakespeare. My mind goes back to the phrase,
“Most ponderous and substantial things!”.
Within all politicians is the desire to act, and I can imagine declaiming the words “substantial” or “significant” on the stage. What do I mean? I want to make it clear that, if the Government have taken it upon themselves to use the word “significant”, they should not jettison it in the remaining part of the definition. Having taken the word “significant”, whose meaning everyone understands, they should continue to use it, and it will then catch more of senior management than might otherwise be the case.
I am worried that “substantial” is a quantitative word that suggests that, in order to be classified as “senior management” for the purposes of the Bill, a person would have to be responsible for a substantial part of the company, whereas he might be caught by having responsibility for a “significant” part of the company. So, rather than be quixotically chivalrous, I am now looking forward to hearing the Minister’s response. I beg to move.
I apologise to my noble friend, but I urge a little caution with regard to the amendment. Quite a good test, which lawyers tend to use, is to see what happens if you put the prefix “in” in front of a word; in this case, that would make “insubstantial” and “insignificant”. I think that “significant” is too weak here and that it is wise to stick with “substantial”.
I am a little worried about this offence; one worry was well illustrated by our previous debate. There is a widespread feeling in this country that if someone is killed by reason of ordinary negligence, not gross negligence, a serious criminal offence should be created and people—or, in this case, corporations—should be held to account in a serious criminal fashion. Unfortunately, we live in an uncertain world where there are a substantial number of deaths. I do not want to seem complacent, but in this country, there are a great many fewer than in other western countries and far fewer than in other parts of the world, and thank goodness for that. We have a well developed health and safety system, which we must not be complacent about and which meets a great many of our needs. We are looking here at the absolute upper end of responsibility, and we are doing it in relation to corporations. I am worried about what happens when a corporation comes before a jury and there is no individual to whom the jurors can relate when they think about whether it is fair to find a guilty verdict. If we make it too easy to get convictions, we will, in the end, devalue the whole currency.
If an organisation or corporation is to be found guilty of corporate manslaughter or corporate homicide, it ought always to be seen as a very serious mark of disapproval, as it would be in the case of an individual. Nobody in this House, or no sensible person, would wish to be found guilty of manslaughter and even less so of murder, obviously. We would be deeply ashamed, and rightly so. But if we create an offence in which it is not obvious to a jury that the management of the organisation and the organisation itself have fallen far below what is to be expected, we will devalue the currency. Boards of management and senior managers must do their best to look after every aspect of an organisation, but almost every aspect will be significant. The Bill is right in focusing not just on what is significant but also on what is substantial. I advise sticking with the present wording; it is a good idea to test it with the amendment, but I counsel keeping it.
I agree with the noble and learned Lord. Whenever a lawyer sees two different words in the same subsection, he will always try to find two different meanings. For myself, I cannot see a great deal of difference between “significant” and “substantial”. I suspect the reason for having “substantial” is because it appears in the context of the whole phrase “or a substantial”. It seems the natural word to use there. I doubt whether it widens the meaning beyond “significant”, but I may be wrong.
Perhaps I may respond, as a mere solicitor, to two exceedingly senior noble and learned Lords, and apply the Lyell test whereby you put the word “in” before the word in question. An “insignificant” part of an organisation’s activities would be readily understood, but what on earth would an “insubstantial” part of its activities be? “Substantial” is a dangerously vague word, with at least two different meanings. Obviously, we will await the Minister’s words of wisdom.
I keep trying to apply what I am now going to call the “James test”: when one looks at the practical examples that my noble friend gave, will one catch the right people in the right place, and who are the right people? That is a huge question, and I do not know whether my noble friend wants to comment on it in relation to the example that he gave earlier.
I put this point to my noble friend Lord Hunt because I thought he asked a question that went to the core of my example of case F against Cheltenham racecourse. Last week, I discussed that case with Lord Vestey, the chairman of Cheltenham racecourse, and asked what would be his greatest fear in a case arising against Cheltenham for corporate manslaughter. He mentioned that case, and I remembered it. I then asked Lord Vestey who he thought would bear the ultimate responsibility in that case. There are four candidates: the head groundsman, who did not put the dolls out; his boss, the clerk of the course; the chief executive, Edward Gillespie; and, above him, Lord Vestey. I said to him, “It seems to me that we’re going to bang you up for this”. “Not at all, old boy”, he said, “absolutely not. It wouldn’t be me”. I asked, “Who would it be?”. He said, “It can’t be the Jockey Club because it’s now passed over its powers for running racing to the British Horseracing Board, so you’d have to go for its chairman”. Noble Lords can take their pick. I do not know where one ends up at the right level of responsibility.
Would it be possible to resolve the problem by consulting the Oxford English Dictionary? If we looked up “significant” and found “substantial” and looked up “substantial” and found “significant”, would that lead the noble Lord to withdraw his amendment? Perhaps he has already done so.
Will the noble Lord consider a further point that has not been made? There seems to be a substantial case for the matter that he is pursuing because his amendment does not remove “substantial” from Clause 1(3). There, he is expressing a weight of evidence showing that the breach of the duty is a substantial element in causation. In regard to his amendments relating to page 2 of the Bill, it will not be tested in the same way. Presumably as a matter of law, the word should have the same meaning as it had in Clause 1(3). Where a word is mentioned in an Act, it is a basic tenet that it does not have different meanings in different places. It is quite right that the noble Lord, Lord Hunt, has left “substantial” in Clause 1(3) and has turned his attention to a better word in respect of page 2, referring generally to the amendments in that form.
I suspect that at the end of all this we may end up dancing on the head of a pin. There is not a great deal in this. I quite like the idea of the noble and learned Lord, Lord Lloyd, of settling this by using the dictionary. We need to have a common thread to this. The amendments are concerned with the way in which we have sought to define senior management. Our purpose in using our definition was to try to capture a concept of those people who make important decisions about large parts of organisations.
Amendments Nos. 11 and 12 change the definition of “senior management” from those people who play a significant role in managing “substantial” parts of an organisation to those people who play a significant role in managing “significant” parts of an organisation. We do not see a great deal of difference between the alternatives, and in many cases, significant parts of organisations could also be considered as substantial. However, “substantial” is intended to convey a quantitative sense, so that the part of the organisation will be large. We think that using the word “significant” runs the risk—I put it no higher than that—that high-profile areas of business will be given undue weight and that possibly large but otherwise lower-profile areas could be considered “insignificant”. For example, it could lead to the situation where the maintenance department of an organisation was given less weight than the media department, despite far more employees being engaged in maintenance.
For those reasons, we think that the definition as it stands is preferable, although I concede that the alternative suggested by the noble Lord, Lord Hunt, is not a million miles away from ours in its attempt to ensure that we have the right substance. However, we prefer our own wording. This debate has provided us with an entertaining little joust. It has given the noble Lord the opportunity to indulge his expertise in Latin and has provided us with some further wisdom on the subject that I have greatly enjoyed listening to.
I do not know which medieval philosopher referred to angels dancing on the head of a pin. I do not think anyone has ever found him, but I am grateful to the Minister for using that phrase. I am a little worried that we may actually be dancing on the point of a pin, which is much more painful.
Everyone knows what “significant” means. One uses the phrases “statistically significant” and “significant profits”, and recently we have sadly heard of a “significant number of redundancies”. “Significant” is well known and well understood. I think that “substantial” is a much more difficult word, although it conveys a high level of meaning in its appearance in Clause 1(3), as the noble Lord, Lord Wedderburn, pointed out. That is where I think it is more readily understood. However, I recognise that I have been rather quixotically chivalrous in the sense of Don Quixote—if I can invoke such a terrible person. This has been a useful debate because we are trying to work out where the dividing line is. It is important that we get it right and that everyone understands it. I shall carefully consider what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 12 not moved.]
13: Clause 1, page 2, line 4, at end insert “, or
(iii) the performance of duties arising from a contract, an office or a fiduciary obligation, concerning matters substantially connected with those activities”
The noble Lord said: I think that for this amendment I can pray in aid a lot of the contributions to the Committee. Most of them have been suffused with traditional legal thinking—perhaps sometimes to the extent of compressing the liability established by the Bill. I am not trying to do anything like that. I merely want to deal with the question of where senior management is to be found. Although it is not grouped with this amendment, it might be convenient for noble Lords to notice that I have another amendment, Amendment No. 32, to which I shall speak, because the thinking behind that amendment is relevant. The Minister may think that this is the wrong place to make the case that I am making and that I should do so in relation to Clause 2, so I am not standing on precise drafting or precise place.
What is the essence of the amendment? The Bill says in various places that it is concerned with the breach of a duty of care. That is defined in many ways, and I immediately make clear that I accept everything that was said about the Bill being concerned with gross negligence. If we look at Clause 2 as a way into this amendment, the relevant duty of care is defined, and it may be that my amendment should come there. Clause 2 defines “relevant duty of care” as a duty owed to employees, as an occupier or in connection with a list that includes supply of goods, carrying out of construction and similar things. When one goes back to where the amendment has been put in, it is also important in regard to the definition of “senior management”. I prefer to raise the issue there, although noble Lords may think that it should come in some other place.
My basic point is that, as Lord Atkin once suggested, everything is being gobbled up by the word “negligence”, which suggests that one should have in mind the duty of care in the tort of negligence. The noble and learned Lord castigated me for having the civil law of negligence too much in mind, but negligence is behind a great deal of Clauses 1 to 3. It is important that the duty imposed is clearly set out as including, as in Amendment No. 13, duty arising from contract, office or fiduciary obligation. Those who have such duties, which are connected with or concern matters substantially connected with the activities described, should be liable where gross negligence takes the form of breach of that type of duty. It would be absurd if duties arising from contract or office—a well known term in company law—or the fiduciary duty that Section 174 of the Companies Act 2006 set out for directors were not included in the Bill or were not part of the thinking about what we now have to accept is, by a majority of voices, activity that falls far below the relevant duty. Section 174 sets out that one of the relevant duties in fiduciary obligations is that a director of a company,
“must exercise reasonable care, skill and diligence”,
and that “reasonable diligence” means,
“the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director”.
An extra level of duty arises in Section 174(2)(b) from any extra expertise or knowledge that that director has.
During the passage of the Companies Act, there was a great deal of debate about the duties of a director, and that is where the pen finally stood. All these duties are across a range of duties well known to civil, criminal, company and commercial law. They arise from the law of tort—since that was mis-spelled once in my speech in Hansard, I shall spell it out: T O R T—or from contract, fiduciary obligation or so on. It is important that that is so because in paragraphs (a) (b) and (c) of Clause 2(1) the Bill is clear that the duty in respect of deaths of workers that occur at the corporation’s place of business is owed to the corporation’s employees. Paragraphs (b) and (c) of Clause 2(1) do not require the duty to be owed to the corporation’s employees, and I am well aware that that distinction was deliberate. It is any duty owed to anyone as an occupier, as Clause 2 makes clear, or arising from other duty.
Therefore, I have been bold enough to put this thinking into an amendment with a list of those who are among senior management. If noble Lords do not like it there and say that it should not be an extra test that gives another range of persons in senior management—and this is why I mention Amendment No. 32—perhaps they would like it somewhere else. But somewhere in the Bill it must be made clear that, when there has been gross negligence, the duty can be based on the law of tort or contract or fiduciary relationship or an office held by the persons concerned.
That is quite enough at the moment. There are a lot of reasons why you could argue that that proposal should be somewhere else, but I hope that the Minister will say that he will at least take this away and think about it in respect of this important Bill. I beg to move.
Perhaps before the Minister responds, I could say a few words. I am somewhat confused by the explanation put forward by the noble Lord, Lord Wedderburn. My understanding is that the substantive amendment, Amendment No. 13, relates to the definition of “senior management”. On page 1, Clause 1(4)(c) says that senior management,
“in relation to an organisation, means the persons who play significant roles in”—
and then we have paragraphs (c)(i) and (c)(ii), to which the noble Lord adds a paragraph (iii),
“the performance of duties arising from a contract, an office or a fiduciary obligation, concerning matters substantially connected with those activities”.
The first point is what I would call, in honour of my noble friend Lord James, the “Lord James of Blackheath point”. How can that be understood in the boardroom? I find it fairly difficult to understand and I dare say that my noble friend’s colleagues in the boardroom would similarly find it difficult to understand. Secondly, whom exactly do the noble Lord and his noble friend intend to include in the amendment? In an amendment such as this one, the intention could be to include every single paid employee in an organisation who takes any kind of decision. If that is the case, it seems pretty poorly drafted.
I may have misunderstood what the noble Lord was saying and he may, when he responds to the Minister, be able to put me right. But at the moment I cannot offer much support for the amendment.
I am grateful, as ever, to the noble Lord, Lord Wedderburn, for explaining his amendment, the intention behind it being to widen the definition of the law of negligence to duties arising from a contract office or fiduciary obligation. Like the noble Lord, Lord Henley—to whom I apologise for failing to accurately bracket him with the lawyers in the Committee—I remain to be convinced by his argument. It would not be an appropriate extension of the offence because, with the new offence, we are uniquely concerned with the liability of the organisation itself, not of individual employees or officers. The offence is based on the personal duty of care that the corporate body owed the victim. It does not arise as a matter of vicarious liability.
The duty of care owed by an employer to his employee to ensure a safe system of work, for example, is a personal one. Where the employer is a corporate body, the duty is owed by the organisation. With the focus therefore on duties of care owed by the corporate body, it would not be wise or sensible to extend the offence to duties primarily owed by individuals such as office holders or to fiduciary obligations such as those owed by trustees or directors which, again, are generally not applicable to corporate bodies.
On the other hand, it is clear than corporate bodies can and do owe contractual duties. In such circumstances, a common-law duty of care will be owed for the performance of activities under the contract. The implication of the amendment, however, would be that the offence would apply where a contractual duty has been breached regardless of any common-law duty. We are wary of making that move.
For example, if a hospital is contracted to provide a particular treatment to a person, it falls under a common-law duty of care to provide that treatment to the proper standard and to care adequately for the patient. If it grossly fails in that duty, with fatal consequences, it can be liable under the offence subject to the tests properly set out in the Bill. However, it is also under a contractual duty to provide the treatment in the first place. The amendment would mean potentially applying the offence as a remedy for not performing the contract at all. The Committee will accept that that would represent a significant extension of the law of negligence and criminal liability.
We are not attracted to the amendment and I hope that, having heard my explanation and expression of concern about the real effect of his amendment, the noble Lord, Lord Wedderburn, will feel able to withdraw it.
I am grateful for this debate on the amendment. I am sorry that Amendment No. 32 was not formally linked to it, where it belongs. The noble Lord, Lord Henley, said that he was confused and not convinced. Let me assure him that there is a serious case to be made, which the Minister adverted to.
If a hospital contracted to undertake a particular line of activity by way of cure or healthcare and did not perform that duty at all—I do not bother to set out all the facts, but we are assuming that there is a death—we should look at it not from the position of the boardroom but from the position of the grave and those who have died. The noble Lord suggests that not to perform that contract would be better than performing it negligently. I cannot think that a sensible state of the law. If you owe a duty, by contract, to do something for someone and fail to perform it reasonably, that is known as negligence which falls from the breach of contract. It is not exactly the same as negligence in the law of tort, but if you do not perform the contract at all, it is at least arguable that you should bear some responsibility for it, alongside whoever did their best but failed in some way to avoid the charge of gross negligence. That is why contract is there.
Unless—in a Room with such bad acoustics—I missed the phrase, nobody has explicitly referred to fiduciary obligations. They have been a matter for lengthy discussion and do not just belong to some abstract, curious nook of commercial law. They are important. Parliament has seen fit to pass, and Her Majesty has given consent to, Section 174 of the new companies Act which imposes serious duties of reasonable care. I have already read the terms of the section, and not to include these duties will be seen as yet another attempt under the Bill to confine our ability to something parallel to the old law of directing mind and will.
Every time there has been a suggestion—from the noble Lord, Lord Razzall, for example—to slightly extend the perspective of our ability, it has been met by violent objections from noble Lords in the Conservative ranks and somehow unappreciated by the Minister. We must look at the Bill in the light of the fact that inquiry after inquiry into tragedies—whether at Hatfield, the River Thames or wherever—has found great defects in health and safety in the systemic apparatus of corporations and other bodies, which have caused many deaths. The Bill suggests that the initial test on a relevant duty of care is the law of negligence: that is so in the paragraphs from Clause 2 that I read out. It would be a curiosity for lawyers to find that duties arising from contract, or imposed by the law in some other way, were not equally relevant to the Bill.
However, I live in hope that the Minister will at least consider the matter, although he did not offer much hope. Yet I hope he will, and that his noble friends in office will consult closely on the extent of the duties imposed in Clause 2, which, under the amendment, would go back to the definition of “senior management”. Under the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
14: Clause 1, page 2, line 4, at end insert—
“( ) Where two or more organisations owe a relevant duty of care in relation to a discrete site or sites, each organisation may be separately found guilty of an offence under this section.”
The noble Lord said: The amendment allows for two companies to be prosecuted separately for the same incident. Where death occurs as a result of a gross breach of a relevant duty of care, it would be possible to assign that gross breach to two separate parties. The principle of allowing dual prosecution ties into the argument for including holding companies and unincorporated bodies in the scope of the offence. There is no reason why justice should be denied the families of those who die as the result of a gross breach of the duty of care, purely because they happened to be working for the wrong type of company. It is also essential that, wherever organisations owe a duty of care, they are compelled to honour it, regardless of how many other bodies owe the same duty of care.
We hope that the amendment exposes a potential loophole where large corporations could protect themselves by subcontracting dangerous works, thereby ensuring that their senior management were nowhere near the work undertaken. That would completely contradict the spirit of the Bill, repeated again and again by Ministers in this and another place, which is to encourage an improvement in corporate safety culture. I beg to move.
The noble Lord, Lord Henley, has very properly described the circumstances in which Amendment No. 14 would apply. That is where more than one organisation owes a duty of care to a particular site. Therefore, that would have relevance where, for example, a number of contractors were working on a building site. There is nothing in the Bill to preclude organisations being prosecuted for an offence under the Bill in respect of the same fatality, provided that each owed a duty of care to the victim and both satisfied the tests for liability. There is nothing in criminal law generally that precludes such a prosecution. Indeed, it is not uncommon, as I am sure the noble Lord is aware, for more than one person to be prosecuted for an offence or offences in respect of the same crime.
In the context of the new offence, a pertinent example is provided by the Hatfield crash, where employees of both Network Rail and Balfour Beatty, and indeed both organisations themselves, were prosecuted. Although manslaughter charges were not successfully prosecuted, there was no principle to preclude the conviction of both.
Clearly, it will be important to establish for the new offence that each organisation owed a duty of care to the victim. It is likely that the nature of that duty will differ: for example, on a building site, the main contractor is likely to owe a duty as the occupier of the site and owe duties in that respect. He will also owe duties to his employees and potentially to sub-contractors and their employees if he has assumed responsibilities for the co-ordination of work. Sub-contractors will owe separate duties of care for the performance of their work and the systems of work used for their employees.
For prosecutions of more than one organisation, it would need to be proved that gross negligence on the part of each organisation, related to its own duty of care, was responsible for the death, but subject to that, there is no obstacle to prosecute each. So what the noble Lord seeks is achievable already. I hope he finds that explanation satisfactory and will withdraw his amendment.
I am very grateful for what the noble Lord has told me at some length. It seems that he could simply have said my amendment is unnecessary and that what it achieves can already be achieved by the Bill, but I am grateful for his more detailed explanation. In due course, I shall consider it with great care. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
15: Clause 1, page 2, line 9, at end insert—
“(5A) No part of this Act shall be construed as preventing or in any way hindering action under section 37 of the Health and Safety at Work etc. Act 1974 (c. 37) (offences by bodies corporate).”
The noble Lord said: We now consider an important subject in Amendment No. 15. We must ensure that a corporate manslaughter conviction does not preclude secondary liability of individuals for health and safety offences. I would be grateful if the Minister could help us through this by explaining how the system would now operate. It is important to recognise that it will still be possible to have an individual prosecuted under Section 37 of the Health and Safety at Work etc. Act 1974. Alongside that, it would be possible to prosecute the company for corporate manslaughter with this legislation. I am concerned to ensure that prosecuting the company for corporate manslaughter under this new offence does not mean that the old Section 37 prosecution cannot take place side by side.
The issue is not just academic. In the event of a conviction for corporate manslaughter, the judge would not necessarily ask for a verdict against the company for breaches against the 1974 Act as well. The amendment suggested by my noble friend and I would make it clear in the Bill that the new offence does not supersede a separate health and safety offence.
This refers back to what I sought to persuade the Committee before: namely, if the Corporate Manslaughter and Corporate Homicide Bill is to make a significant contribution to persuading everyone that they should take health and safety much more seriously, it must be made clear that it is in addition to the existing laws and not a detraction or distraction from them. The Minister, Gerry Sutcliffe, said in the other place:
“I am trying to argue that there would be the opportunity to combine corporate manslaughter with existing health and safety legislation … My point is that individual liability is catered for under existing legislation, so the Government are not persuaded that we need to move down the route of individual liability in relation to corporate manslaughter. The aim is to make sure that the legislation works and can create an arena for change … I hope that it will be a deterrent”.—[Official Report, Commons, 4/12/06; col. 74.]
Are we, therefore, sure in our minds that we can have what is called twin-tracking; namely, that the Health and Safety at Work etc. Act 1974 and the corporate manslaughter Bill can see prosecutions in respect of the same incident, the same terrible fatality? I hope that the Minister can reassure us about that, as we need to be clear on the subject.
I have listened with a great deal of interest to the noble Lord. I wonder whether this has a particular relevance in relation to the construction industry. The unions have grumbled for a long time about people working on sites who claim to be self-employed but are not really; they are employed on an employment basis, even though they allege to be self-employed. We have been trying to do something about that for some time, to ensure that such people are covered. Would they be covered by your wording?
I hope so. Perhaps I may explain this to the noble Baroness. I seek to keep all the existing legislation alive and clearly in the forefront of the levers available to the prosecuting authorities. The noble Baroness has raised an important point. There are worries about the construction industry and the many deaths that today occur on construction sites. I am involved with a number of health and safety organisations, as is the noble Baroness, and there are serious concerns about the way in which construction sites still carry such a huge number of serious injuries and fatalities. Some way must be found for putting health and safety further up the agenda of the companies operating in that arena.
That is another reason why we must include unincorporated associations. Some of these smaller companies are difficult to pin down, as they are normally unincorporated associations. There is the matter raised by my noble friend Lord James about accidents that happen on construction sites abroad. We shall come to that when we deal with jurisdiction. If there is a prosecution under the old health and safety legislation in respect of the same incident, can there still be a prosecution for corporate manslaughter against the company? Does the one knock out the other? My amendment ensures that that prosecution of the company is still available as well as the prosecution of the individual. It would be wrong for one legal process to pre-empt another. I hope I carry the Committee with me in asking these questions. I look forward to hearing the Minister’s response. I beg to move.
The noble Lord raises an important point. It is important to ensure that the prosecution has the full range of offences available to it when it considers what prosecution should be mounted. I am sure that the noble Lord will agree that it is not simply a matter of individuals being held responsible for health and safety legislation, but in some instances individual directors may be held responsible for corporate manslaughter or corporate killing in Scotland. I would be very interested to hear what the Minister says in reply.
My concern about the amendment is one that I know lawyers always have: having something in the Bill that says that it does not hinder that particular aspect does not mean that the intention of Parliament was to hinder something else; for example, individuals being held responsible for corporate manslaughter. That is my gut reaction. I suspect that we will be told that that is not necessary. My interpretation is that the amendment is not necessary because it is quite clear that the full range of statutory and, in Scotland, common law offences remain in respect of individuals.
The noble Lord has posed the question and answered it. He is quite right. It is only by asking that question and moving the amendment that the Minister can now say that it is completely unnecessary. In that case I shall withdraw the amendment and everything is clear. We now await the response of the Minister.
I shall not deal generally with the focus in the Bill on corporate liability which we shall come to in other amendments. I shall confine myself to the narrower points raised by the noble Lord, which I fully concede are very important in the terms of the Bill.
It is evident from what has been said by noble Lords that there is some uncertainty about whether a successful prosecution of a company for the new offence would preclude the court convicting the company on related health and safety charges. That has particular significance for individuals, because if it is proved that a company’s offence under the Health and Safety at Work etc. Act 1974 was committed with the consent or connivance of a director or manager of the company, or was attributable to neglect on his part, that person would also be guilty of the health and safety offence and be liable to be punished accordingly.
We are currently considering whether there is an obstacle that needs to be addressed. There is some question over whether there is a bar here, either to convicting the organisation for a health and safety offence on the same indictment or, in any event, to considering secondary liability. The latter might still be possible even if the company itself is not convicted because Section 37 does not, in terms, appear to require a company to be convicted; rather the commission of an offence under the 1974 Act needs to be proved.
We are prepared to consider this swiftly and positively and to bring forward an amendment if one is needed—the noble and learned Lord, Lord Boyd, hinted that it might not be necessary—either to address the substantive point of the noble Lord, Lord Hunt, or to clarify the position in the Bill if that would be beneficial. If there is a problem, we want to deal with that quickly, if required. If it is not required, we will not bring forward anything. We are grateful to the noble Lord for highlighting the issue. I undertake that we shall give the point further consideration. We do not want that obstacle there.
The Minister has completely reassured me. He has not only given an undertaking; he has given an undertaking with which he will comply swiftly. I do not think that we need to go too heavily into the definition of “swift”. We all know what it means: it means that we are about to have clarification. I am glad that the noble Lord has admitted that there is a concern here. We need to know about it and deal with it quickly. He said he is going to do that and, in those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
16: Clause 1, page 2, line 11, at end insert—
“( ) An organisation that is guilty of corporate manslaughter or corporate homicide is liable on conviction on indictment to—
(a) make the conviction known by a statement in open court in terms approved by the court, and(b) give an undertaking to the court as to the manner of its publication.”
The noble Lord said: Amendments Nos. 16 and 17, which are grouped with Amendment No. 43 in the name of the noble Baroness, are to do with additional penalties. Perhaps one might conveniently term these amendments “naming and shaming”, but they seek to give a power to the courts to require a convicted organisation to publicise notice of its conviction. Amendment No. 16 is drawn up along the same lines as, for example, newspapers are required to comply with in regard to publishing apologies. It would insert into the clause that an organisation that is guilty of the offence is,
“liable on conviction on indictment to … make the conviction known by a statement in open court in terms approved by the court, and … give an undertaking to the court as to the manner of its publication”.
So not only does the conviction have to be publicised but it has to be publicised to an extent that meets with the approval of the court according to the significance of the offence.
Amendment No. 17 would ensure that, where a company was convicted of corporate manslaughter, the conviction would be published immediately at Companies House. The amendment would insert at the end of line 13 on page 2 of the Bill:
“Any penalty … shall be notified by the court to the Registrar of Companies and the Registrar of Companies in Scotland.
To summarise, at the moment, the only punishment possible for a company is an unlimited financial penalty. The amendments would provide further penalties by allowing the courts to order a company to advertise its conviction, and it is likely that that would be issued alongside a financial penalty. I believe that the threat to a company’s reputation would provide a further incentive to improve health and safety at all levels.
The financial penalties in the Bill are supposedly limitless. Again, I should very much welcome the Minister giving us an idea of what the Government have in mind. I was interested to read in the report of the Home Affairs Committee and Work and Pensions Committee on the draft Bill the evidence of the Association of British Insurers:
“We do not anticipate that this proposed new offence would have a substantial impact on the price of relevant insurance products, such as employers’ liability insurance, as the financial impact is likely to be minimal across the economy”.
That is one view. I believe that it would be worth pressing the Minister on whether he anticipates that the financial penalties could be large enough to bankrupt a business. Of course, one is dealing with different sizes of business. I am not sure whether any guidelines will be issued on the amount of the fine for culpable death where someone is clearly guilty of a gross breach. We have been debating the various terminologies.
Where one or more people are killed, it would be helpful to know exactly what the Government have in mind about the level of the fine. Will guidelines be worked out? Will it be, say, a proportion of a company’s turnover? The Financial Services Authority, for example, gives out very substantial fines, which can quite often rock back a company because of their sheer size.
Those are the two amendments to which I am speaking. I put them into context by saying that I have been paying attention to what the Minister’s colleague, Gerry Sutcliffe, said in the other place. He stated:
“I put it on the record now that we are considering corporate probation and naming and shaming, in respect of the filing of accounts at Companies House. We are also considering the use of annual reports, and the naming of directors in reparatory orders, to make sure that work is carried out”.—[Official Report, Commons, 4/12/06; cols. 74-75.]
The noble Baroness is about to speak to Amendment No. 43 which also deals with public information. The noble Baroness and I are putting into amendments just a few ideas from the menu that Gerry Sutcliffe put forward in the other place. I beg to move.
I speak to my own amendment in the group. I thank the noble Lord, Lord Hunt, for the very good case that he has made on behalf of Amendments Nos. 16 and 17. I referred to this matter at Second Reading, after I had met a number of representatives of the TUC and my own union. I said then that there may be a case for the inclusion of a clause dealing with public interest, perhaps empowering the court to make public the details of the offence: the sentence imposed and—in my view this is very important—the steps to be taken to prevent a recurrence. In that respect, the amendment differs from that of the noble Lord, Lord Hunt, because we have spelt that out in the text. Not only would the offence and the sentence imposed be publicised, but also,
“(c) any measures to be taken by the organisation to reduce the likelihood of its committing further offences; and
(d) any other matter relating to the offence or sentence which the court considers appropriate”.
The amendment continues:
“An organisation that fails to comply with an order under this section is guilty of an offence and liable on conviction on indictment to a fine”.
We have spelt out not just that we want naming and shaming, but also steps to be taken by which the public can be assured that the offence is unlikely to be repeated because steps will be taken to prevent a recurrence. We have a further amendment later which involves the court making it quite clear that an individual should be nominated to be in charge of the improvement to be undertaken, and that that should be monitored. In other words, we want to make it quite clear that if someone has been killed in the circumstances referred to in the Bill, there will be monitoring to ensure that that can never happen again. That is dealt with in Amendment No. 43. I support all that the noble Lord, Lord Hunt, has said.
I am very grateful for the constructive tone of the discussion on this group of amendments. As that discussion has made clear, it is vital that the new offences are accompanied by sanctions that properly punish the convicted organisation and act as a significant and sufficient deterrent against future offending. The Bill already provides both punitive and rehabilitative sanctions. Organisations convicted of the new offence will be subject, as the noble Lord, Lord Hunt, said, to an unlimited fine and remedial orders. I shall deal with his points later. However, as the amendments make clear, some concern is still felt that the sanctions are insufficient, and I welcome the blue-skies thinking that has erupted since Mr Sutcliffe made his comments on 4 December. The suggestions are very helpful.
The noble Lord, Lord Hunt, proposes that organisations which are convicted of the new offence should be obliged to publicise the fact of that conviction. The amendment of the noble Baroness, Lady Turner of Camden, would have a broadly similar effect, so I shall speak to the amendments together. Before doing so, I shall address the other amendment of the noble Lord, Lord Hunt, which proposes that any penalties imposed as a result of a conviction for the new offence should be notified to the relevant Registrar of Companies. On the face of it, it is an attractive proposition.
The functions of the Registrar of Companies are to incorporate and dissolve limited companies, to store information about companies delivered under companies legislation, and to make this information available to the public. It is not, however, its function to register criminal convictions of any kind. To create this requirement would therefore raise the question of what other corporate offences should be held in this way and would potentially lead to a substantial change to the role of the registrar.
I am not sure that the benefits of the proposal justify changes of that extent. In particular, I am concerned that the proposed sanction would not apply to all organisations which are capable of committing the new offence—there has been some discussion today about the breadth of organisations that the new offence will cover. Under the amendment as it is currently phrased, only limited companies would be registered at Companies House, but a much wider range of organisations such as local authorities, NHS trusts and government departments could be convicted of corporate manslaughter. It would be inequitable in those circumstances to create a sanction that could apply only to certain kinds of business. I am therefore not persuaded by the noble Lord’s interesting suggestion that changing the function of the Registrar of Companies is an appropriate way of dealing with the matter.
However, I can see the benefits of requiring an organisation to advertise the fact of its conviction, as proposed by the other amendments in this group. The noble Lord, Lord Hunt, made a powerful point about reputation. It is certainly true that reputation is an important asset to many businesses—many businesses trade on reputation after all. In his recent review of regulatory penalties, Professor Macrory cited evidence which suggests that damage to an organisation’s reputation can have consequences for consumer confidence, market share and equity value. Public censure is therefore a sanction that organisations are likely to take very seriously.
Interestingly, adverse publicity orders are already successfully used in other jurisdictions. As I understand it, courts in Canada can order an offending organisation to publicise, in a manner specified by them, the offence of which it is convicted, the sentence imposed, and any remedial action that it is taking. Adverse publicity orders have been adopted also in the United States and in a number of Australian jurisdictions. The Macrory review advocated that they should be developed for use in the UK courts.
I can confirm that we are therefore giving careful thought to the possibility of including some sort of adverse publicity order in the Bill, along the lines of the Canadian model. A provision of this sort would enable the court to order the organisation to advertise the conviction, sanction and remedial action ordered in whatever publication seemed relevant. That could include annual reports, local media, trade publications or the national press, depending on the size of the organisation and the nature of the offence.
This would be a novel sanction for UK courts. There would therefore need to be a clear framework within which the courts could operate it, so that judges would know exactly what the process for setting the order would be and how compliance would be monitored.
We are continuing to give careful thought to the practicalities of making adverse publicity orders available and, although I can make no absolute commitments today, I hope that I have said enough to persuade the noble Lord and the noble Baroness, Lady Turner, that we have heard their concerns. On that basis, I trust that the noble Lord will withdraw the amendment.
The noble Lord, Lord Hunt, raised some questions about fines, and I think it fair that I make a few observations on that issue. We have made it clear that it is vital that the sanctions for the offence properly punish the convicted organisation and act as a sufficient deterrent against reoffending. The provision for unlimited fines means that courts can target the punishment to the specific circumstances of the case. That is obviously the most important reason for having an unlimited fine. Guidelines will be issued by the Sentencing Guidelines Council to assist courts in exercising their power and authority.
In general terms, the Government have been pleased to see that fines for health and safety offences are rising; they have, apparently, risen by 31 per cent since 2003, so courts are very seized of their significance. We have recently seen some very high fines in health and safety convictions; at Hatfield, Balfour Beatty was fined £7.5 million, Railtrack was fined £3.5 million and Transco was fined £15 million. So I expect that we would see fines of that magnitude in cases of gross negligence, when the court has taken a very serious view of the offence and the conviction has been achieved.
I have tried to make as positive a response as possible. We are considering carefully suggestions that have come forward and we hope to be able to say something much more positive about adverse publicity orders, because we see considerable merit in their operation and we have learnt quite a bit about them from other jurisdictions.
Those were reassuring words, but again we are up against a pretty strict timetable. This Bill has been through all its stages in the other place; we have been through Second Reading here and are now into the Committee stage. I understand that we have three days next week in Committee and it is likely that we shall finish that stage next week. So there is very little time left for the Government to introduce all these amendments. I am sorry to impose additional burdens on the overworked officials who are no doubt giving the Minister good advice, but we will have to move pretty quickly, because we will want to see some of these amendments in good time before we deal with Report stage.
There is a wish to see us move in the direction that we have been discussing. The Minister over a month ago said he wanted to see us move in this direction. I know that we allow Ministers to have a brief break over Christmas and the New Year, but I understand that we will have Report in the first week of February, so the timetable is very tight. I just hope that we will be able to meet those situations fast, or the noble Baroness and I will have no alternative but to return to this on Report if the Government have not come forward with some proposals.
I believe the merit of these amendments is that they leave to the court the manner in which publication is ordered. The Minister speculated on how that might be; surely, if we leave it to the court, the court can apply the particular circumstances of the conviction to the particular circumstances of the publication. We do not need to set out a whole series of complicated options; let us leave it to the courts to decide, because they will have heard all the evidence, and the judge can make whatever order is appropriate. But in accordance with convention, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 17 and 18 not moved.]
Clause 1 agreed to.
19: After Clause 1, insert the following new Clause—
“Offence by holding company
(1) In the case of a corporation which is found guilty of corporate manslaughter, any holding company of such a corporation shall be guilty of an offence if the holding company failed to take all reasonable steps to prevent such a corporation from committing the offence.
(2) A corporation that is guilty of an offence under this section shall be liable on conviction on indictment to a fine.
(3) An offence under this section is indictable in Scotland only in the High Court of Justiciary.
(4) For the purposes of this section “holding company” has the meaning set out in section 736 of the Companies Act 1985 (c. 6) (interpretation).”
The noble Lord said: The amendment is in my name and that of my noble friend Lord Hunt. It would introduce a new clause which is designed to bring holding companies into the operation of the Bill. The Minister might be able to reassure me that this is already the case, but I await with interest what he has to say.
The present situation, as I understand, it is that, if a breach takes place, an individual company is liable under Clause 1. This is not necessarily always appropriate given the complex arrangements of some corporate groups. The Bill makes a completely arbitrary distinction whereby liability is limited to the individual companies which operate within the larger groups.
While we would accept that there are some cases where the holding companies share none of the responsibilities of the corporations carrying out the work, it is not a reason to exempt holding companies from the offence. Indeed, in the case of a wholly owned subsidiary, for example, the operation of the trading company and its investor are very much aligned. For example, the board of the holding company may be the mirror image of the subsidiary company. It would be appropriate that it could oversee all activity carried on in its name.
The crucial passage of the amendment is that which states that the link of the holding company to the offence is established where a company has,
“failed to take all reasonable steps to prevent”,
its subsidiary committing an offence. Even under the amendment, the holding company would therefore remain at one remove from the offence. I hope that that is a fairly clear explanation of the amendment and that it will receive a positive response from the Minister. I beg to move.
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, to choose 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.
My query about this amendment is very similar to that of the noble Lord, Lord Brennan. There must presumably be a time factor built into when the holding company becomes the holding company of the subsidiary company. If the negligence is committed by the subsidiary company and subsequently a holding company acquires that company, I see no reason why the subsequent holding company should be liable.
I am delighted to support the amendment moved so well by the noble Lord, Lord Henley. The noble Lord, Lord Brennan, has given some examples, and it is well known, especially in the law relating to safety at work, that pyramid companies, shell companies and the system of holding and subsidiary companies are the bane of effectively imposing liability for an unsafe system from which workers suffer. This amendment should be urged upon the Government and the Minister, with, perhaps, one tiny exception, which is that the Companies Act reference in proposed subsection (4) should be updated to the Companies Act 2006. I hope that the Government will take the thinking behind this amendment very seriously and will not allow corporate manipulation in holding and subsidiary companies to impede the impact of the Bill.
We have had a useful discussion on this amendment. I shall comment on one misconception that the noble Lord, Lord Henley, seemed to have in what was otherwise a very clear exposition on this amendment. Holding companies are not exempt from the offence, as the noble Lord perhaps suggested, but maybe he was not suggesting that. I want to make it clear that they are not exempt from the offence. If they grossly breach the duty of care, they will be covered. In our view, the amendment goes further and imposes an offence where there is no breach of a duty of care, but where a holding company has failed to prevent a subsidiary company committing the offence.
I cannot offer the noble Lord any comfort on this amendment, as we do not believe such an offence is necessary or appropriate. As the Committee will be aware, each company within a group of companies will be a separate legal entity in its own right. A subsidiary company has its own legal persona, and the directors of such a company must act in the interests of that company. If the actions, or failings, of a subsidiary company cause the death of a person in breach of its duty of care, that company would properly be liable to the new offence. This reflects the way in which the current law of manslaughter works. For example, in the prosecutions that arose out of the Hatfield crash, it was a subsidiary of Balfour Beatty that was prosecuted.
Amendment No. 19 would be a novel departure from what has been described as the accepted approach. The parent company in a group of companies is a separate legal entity and, as such, is not subject to any legal obligation to prevent those subsidiaries committing any crime. Clearly, there are reputational risks for any parent company if one of its subsidiaries is prosecuted, but that self-interest is quite different from having a direct legal responsibility for the way in which a subsidiary conducts its business.
The amendment would require a parent company to take all reasonable steps to prevent a subsidiary committing the offence. What constitutes “reasonable steps” is not defined, so presumably the noble Lord would argue that that would be for the courts to determine. That would place holding companies in an unsatisfactory and, one might fairly argue, invidious position.
The Department of Trade and Industry looked at the whole question of the civil liability of parent companies in advance of last Session’s Companies Act. Following consultation, the DTI concluded that it would not be appropriate to alter the law in that area. Its review concluded that it would be difficult to define when a parent company was using a subsidiary company abusively to reduce the risks of litigation. The same difficulties could and probably would arise in the context of the Bill.
Under the existing criminal law, there are clear principles of secondary liability for holding one person to account for their contributory actions to another person’s crime, but such principles do not generally impose a duty to prevent criminality by others. The principles of secondary liability will apply to holding or parent companies in the case of the offence of corporate manslaughter as they apply elsewhere. We are not persuaded that there is a compelling argument for taking a different approach in the Bill.
There is a further argument that could be advanced against this amendment which is worth mentioning. It was advanced by Douglas Hogg in another place. In some groups of companies, the parent company will be an investment company, holding a diverse range of subsidiary portfolios. The skills required for the directors of such a holding company will be very different from those required for the directors of a subsidiary operating company. The example of a land company investing in a hotel was cited. In such an example, the holding company would legitimately have no direct knowledge of how to run a successful hotel, so it would be unclear to the directors of such a company what reasonable steps it ought to take to prevent the operating company committing the offence.
The amendment is not quite as simple in its desirability as the noble Lord, Lord Henley, has set out. I see some difficulties in approaching the issue in this way. With that in mind, I urge the noble Lord to withdraw the amendment.
Will the noble Lord review what he has said about secondary liability? He said that secondary liability will always apply and that it might apply to a holding company. I suppose I ought to give him notice that when we come to Clause 16, in which secondary liability is in effect excluded from the Bill, he will encounter considerable resistance from many quarters. He might want to look again at what he said about secondary liability before it goes into Hansard. I do not want him to answer difficult questions at the moment, but the point should be made that the debate inter-relates to Clause 16.
In the 28 or 29 years that I have been in this House, this is the first time that I have ever had the support of the noble Lord, Lord Wedderburn, on any amendment to which I have spoken. With that happy agreement, it is a probably a good amendment on which to end on a Thursday night.
I am sorry that we could not have the same degree of agreement from the Minister. He said that the holding company could be covered if it had grossly breached the duty of care. I refer him to the points made by the noble Lord, Lord Brennan, particularly the first point about the ability to pay and the third point about penalties. His second point referred to a holding company refusing funds to pay for something to do with safety; the Minister said that it could be covered if it had grossly breached its duty of care.
As I have said, it is late on a Thursday. I have achieved the great thing of getting the support of the noble Lords, Lord Wedderburn and Lord Brennan. We shall certainly want to come back to this on Report when we have carefully studied what the Minister has had to say. With that brief warning, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 20 not moved.]
Schedule 1 [List of government departments etc]:
[Amendment No. 21 not moved.]
Schedule 1 agreed to.
I thank the Committee for its attention and diligence this afternoon. I apologise for any errors that I might inadvertently have made in addressing some of the amendments. That said, this may be a convenient moment for the Committee to adjourn until Monday 15 January at 3.30 pm.
The Committee adjourned at 5.55 pm.