Focus

Focus Archive

Corporate Manslaughter: The Proposed offence of Corporate Killing and the potential impact in the EU

by Michael G Welham
December 2003

Today, with the UK being a member of the European Union (EU) the focus is not just a UK legal system issue, but there are European legal implications to be considered and adopted. This raises some complex issues such as the manner in which other countries administer and enforce health and safety. Celia Wells^[1] makes constructive comments on the subject in identifying that many individual European jurisdictions, despite their very different legal forms and systems are addressing the role of criminal law in relation to the corporate enterprise. The European influence will evolve further and the future of health and safety incidents and enforcement is an unknown, but certainly not without complications. This is already seen where corporations have their corporate headquarters in other EU countries and are able to operate in the UK without redress to criminal legal process when incidents occur.

The Health and Safety Executive (HSE) has identified that there is a loophole in safety laws under which multinational firms based abroad and involved in some of the worst accidents in Britain have by default got away with refusing to pay the massive fines imposed on them. There are two prominent incidents involving non UK companies and while they did not involve manslaughter they do raise serious questions about liability. The first involved two Swedish companies who were contractors involved in the walkway collapse at a port in Ramsgate, Kent, in which six people died and seven were injured. They were fined but have not paid any of the £1.25m in fines and costs. Two British companies, Port Ramsgate Ltd and Lloyd's Register of Shipping, which were also convicted, had to pay their penalties of £1.7m. The Swedish firms, Fartysentreprenader AB and Fartysgskonstruktinor, of the Mattson Group, did not attend the court.

The second case involved an Austrian company, Geoconsultants, which was convicted following the collapse of a tunnel at Heathrow, west of London, in October 1994, and has not paid any of the £500,000 in fines and costs despite losing its appeal against conviction, while Balfour Beatty paid its fine of £1.2m. The UK Government is negotiating with other European Union states to make payment of criminal fines enforceable for companies wherever they trade but it is acknowledged that there will still be difficulties with multinational corporations based abroad. This poses a serious and growing problem and it may be that if foreign companies are to operate in the UK some form of indemnity is provided to ensure legal liability cover is provided so that fines could be recovered through the UK courts. At present there is no incentive for foreign companies to adopt UK health and safety systems, which could have the effect of placing UK business at a disadvantage.

This will certainly be of concern when the new law of corporate killing is introduced as it will seen by UK business as an imbalance if companies and management are liable under the tough new law and companies external to the UK are not bound by it.

Concerns about corporate manslaughter have already raised questions within the European Community with a written question sited in the Official Journal of the European Communities:^[2] 'Will the Commission consider an action programme under the White Paper on social policy to ensure that employers' liability for the deaths of employees is taken more seriously.'

An answer was provided by Mr Flynn who replied on behalf of the Commission:
'Penal law is within the competence of the member states. However, the Commission takes very seriously the need to ensure respect for Community law, and in particular health and safety legislation. Member States have to ensure that this is fully enforced through appropriate systems of control or sanctions which are effective in practice and have a deterrent value.'

In the UK there are to date four successful corporate manslaughter prosecutions, which have one factor in common in that they are small organisations where the management has a more 'hands on' involvement than in a larger corporation.

In December 1994, OLL Limited (formerly Active Leisure and Learning Ltd) became the first company in English legal history to be convicted of the common law crime of manslaughter. In 1996, Jackson Transport (Ossett) Limited was convicted of Corporate Manslaughter and fined £22,000. Its director Alan Jackson was convicted of manslaughter of one of his employees and jailed for 12 months and fined £1500.00.

In August 2001 English Brothers Ltd a construction company was convicted of Corporate Manslaughter. Melvyn Hubbard, a director was also charged with manslaughter but after the company pleaded guilty to manslaughter, those charges were not proceeded with. In 2003 Teglgaard Hardwood Ltd was convicted of Corporate Manslaughter. John Horner a director was also charged with manslaughter and was given a 15-month prison sentence suspended for two years.

The proposed offence of Corporate Killing is based upon management failure. This means that there is a management failure if the way in which the undertakings activities are managed or organised fails to ensure the health and safety of persons employed in or affected by those activities. For the offence of Corporate Killing there will be unlimited fines and these could be to a level that could put the undertaking out of business. The court can order remedial action it is anticipated that there will be the option of disqualifying directors from holding any form of management position for a specified period. Individuals can face prosecution for manslaughter if they are identified as being grossly negligent and that would invoke a custodial sentence.

The proposed new offences of Corporate Killing is probably the most important development in health and safety criminal sanctions since the introduction of the Health and Safety at Work etc Act 1974. At this important time there will be many questions as to how the new law will affect organisations, those that manage them, those who work for them and those who are not employed but are affected by an organisation's activities.

It is anticipated that the new law will encompass undertakings such as schools; hospitals, trusts, partnerships, and the self employed as well as incorporated and unincorporated organisations. There is a need for management to understand the complexities of corporate and individual manslaughter and the dramatic change there will be with the new corporate killing offence.

The current law of Involuntary Manslaughter is based upon the unlawful killing of a human being without malice aforethought, and Gross Negligence Manslaughter. The problem has been that for there to be a successful corporate gross negligence prosecution, an individual has to be identified as being a controlling mind of the organisation. The individual must have owed a duty of care and there needed to be evidence to show that the duty has been breached and as a result there was a death and this is the difficulty that the law faces when trying to fit all of the elements together to prove corporate manslaughter cases. The implications for management with Corporate Killing are far reaching because, instead of the manslaughter element, it will be a case of management failure and it will be the degree of that failure that will determine the corporate and individual charges that could be laid. This clearly shows that the new offences will be encompassed in the failure of health and safety management, rather than gross negligence action of an individual.

Europe

Europe poses an interesting view on health and safety law, crime and punishment in that the principal focus is on insurance as opposed to authority regulation. This is further portrayed in a system of defined compensation and rehabilitation programmes as opposed to enforcement, prosecution and civil claims for compensation. In a study undertaken by Jacqui Welham ^[3] there is limited data or evidence available so as to determine how many prosecutions of corporations or individuals are undertaken and the punishment outcome for those involved. There is one exception and that is Eire, in that the Government has produced a draft Corporate Manslaughter Bill although the Bill has not yet been adopted.

European civil code countries, where non-human liability under penal law has been historically unacceptable, have enacted a raft of administrative penalties for corporate wrongs. France has had corporate criminal liability since March 1994 with rules that apply not only to corporate entities but also to other entities such as trade unions and local authorities. Portugal, Spain, Norway, Finland and Denmark have all incorporated criminal punishments against culpable corporations under their new or revised penal codes.

Two examples of prosecution for manslaughter at work offences in Italy are quoted: ^[4]

'In the mid 1970's the two owners of a dye factory in Turin Italy, were sentenced to six years in prison after the families of 13 workers who died of bladder cancer caused by their chemical exposure brought manslaughter charges. Two other directors were sentenced to three and four years respectively. The company doctor was sentenced to four and a half years.'

The second case was more recent and more serious:

'In 1996 a Turin court jailed the nine owner managers of the Societa Italiana Amianto, an asbestos factory, for terms of between seven months and eight years and ordered them to pay compensation totalling $12 million. The company bosses had been found guilty of murdering 32 workers and of causing the occupational disease suffered by 11 more who were still alive.'

In comparison, the UK sees self-employed and director/owners of small business facing very limited custodial sentences. This is in contrast with large undertakings where no senior representative has been imprisoned unlike the asbestos case sited above. An example in the UK is the failure of senior corporate officers in the litany of rail disasters, where none have been prosecuted. This imbalance is further exemplified in the German case (below) where an example of manslaughter at work in Germany is portrayed by the following case: ^[5]

'Two German rail managers and an engineer are in court accused of responsibility for the country's worst post-war rail disaster. The three men are blamed for the deaths of 101 people who were killed when a high-speed train smashed into a bridge near the town of Eschede in June 1998. The two high ranking Deutsche Bahn officials and the engineer went before the court [...] charged with manslaughter and causing bodily harm through negligence [...].'

The outcome of the case is not known, but clearly the German courts have a legal system that readily allows for the prosecution for manslaughter in a large undertaking where negligence is the focus of the charges.

In France ^[6] there is evidence that there are changes in health and safety law following an explosion at a chemical factory in Toulouse. The explosion killed 30 people and 2,500 others were injured. Four months after the disaster the French cabinet was said to be examining a package of new laws aimed at reducing the risk of industrial accidents. A media report provides a brief insight into both sides of what will probably be an ongoing debate, the government producing laws that will not be onerous on industry and the 'other side' who will claim the laws do not go far enough. Whatever the outcome, it must be presumed that the pending laws will strengthen health and safety regulations with serious corporate failings falling within a manslaughter offence.

Clear Picture

The obtaining of a full and clear picture of corporate health and safety crime in European countries is according to Jacqui Welham ^[7] a difficult task in that there is a variance in the method and type of statistical gathering. This is further hindered in that not all countries make information and statistical data available. From the data that is available it can be ascertained that penalty options include:

Austria

Fine, non-accidental injury or negligent homicide tribunal's sentence imprison or fine

Belgium

Prison sentence or fine. If judge decides not to prosecute an administrative fine is imposed on employers

Germany

Enterprises are made to pay penalties for failure to comply with legislation

Ireland

Average fine £5,000. Maximum on summary conviction £1,500 - unlimited on indictment, maximum to date £15,000

Spain

Financial penalties and administrative fines

Sweden

Fines - only 2 cases of imprisonment in last 27 years

European countries place emphasis on rehabilitation, to return people to work as opposed to making civil compensation claims.^[8] Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain and Sweden have workplace insurance compensation schemes. There was no data for Greece or Portugal and both Spain and Ireland have civil claim options.

The focus will be on companies whose head office or main base of operations are outside the immediate jurisdiction of the proposed law of corporate killing will have to address the subject of compliance with the interpretation of health and safety law, which while under the same Framework Directive may differ from the regulations of their own country.

© MICHAEL G. WELHAM

Footnotes

1. Wells, C, 2002, Corporations & the Risk of Criminal Liability, www.freedomtocare.org
2. Official Journal of the European Communities No. 179/23, Written Question E - 447/95, 22 February 1995
3. Welham, J. LLM Thesis, European Health and Safety Law - Transpositin and Harmonisation, University of East Anglia, 2002.
4. Risk 69-31, Trade Union Congress e-bulletin, August 2002
5. Ibid
6. http://news.bbc.co.uk/1/hi/world/europe/1817986.stm
7. Welham, J. LLM Thesis, European Health and Safety Law - Transpositin and Harmonisation, University of East Anglia, 2002.
8. Ibid

MIKE WELHAM, FIOSH, RSP, FIIOSH
Mike is a Principal Inspector with the UK Health and Safety Executive (HSE) managing a team of specialist inspectors. He has involvement as a member of the HSE working group for manslaughter at work, and has working experience investigating and prosecuting individual and corporate manslaughter at work cases, as well as managing a number of HSWA prosecutions. He has undertaken academic research and gained a MPhil in the subject of manslaughter at work. He presents papers on the subject representing the HSE at numerous conferences and seminars including presenting a paper in Canada. His knowledge is the subject of his book Tolley's - Corporate Killing, A Guide to the Forthcoming Law. ISBN 0754510662. He is a Magistrate and an occasional lecturer in health and safety law at the Norwich Law School, University of East Anglia where he is reading for an LLM in Workplace Crime and Punishment.