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The Committee made extensive reference to “exclusively public functions”, which is a curious phrase in the Bill. There is an arbitrary divide between government as a provider and a supplier of a service, because a prosecution can take place in one case, but not the other. The definition is difficult to follow. If the private and voluntary sectors are increasingly going to be involved in the provision of public services, the divide will become extremely grey. Frankly, it would be better if the provision were taken out of the Bill altogether. Deaths in custody are still a highly emotive issue with regard to the police force and the Prison Service. Under the definition, I think that a private prison could be prosecuted, but a public prison could not. This serious issue has caused trauma and distress to far too many people, yet no one is ever held
accountable at present and it appears that the exemption will be maintained.
There has been mention of whether the penalties should be related to turnover. I welcome the Government’s commitment to consulting the Sentencing Guidelines Council, but if it is fair enough in the context of the Competition Commission that people can be fined up to 10 per cent. of turnover, something of that nature might be appropriate. I accept that in the Bill the fines are unlimited, but relating them to turnover in general terms is a reasonable approach. There is a danger of penalising shareholders. Ultimately, it is not the company that pays—it is always someone else. Most shareholders are pension funds, so penalising shareholders for the actions of individual directors is, in effect, robbing pension funds. We must be careful about that.
My final point is on cases involving companies that are foreign owned, as is increasingly the case, and the difficulty of finding the senior management who take the decisions that lead to the action on the ground. Their being abroad can result in no prosecution being possible. A corollary of that, as we have seen far too often in the past, is cases in which a company is found guilty and is hit with a massive fine, and immediately ships its assets abroad.
We raised with the Minister the possibility of creating the ability to seize assets—not to seize assets automatically, but to do it when there was a suspicion or fear that something untoward might happen. I am sorry that there is nothing about that in the Bill. The Minister will remember the classic example—I will not name the company involved in case I should not, but it is the asbestos case that arose in Armley in Leeds. It took 23 years for the residents and workers to get justice, but the day they won their victory the company shifted everything to either the Bahamas or the Cayman Islands and the people got not a penny. We would be remiss if we did not remain aware of that possibility and try to deal with it in the legislation.
I welcome the Bill, despite its deficiencies. For too long, too many people have paid the ultimate price and too many people have escaped justice. We need to take the legislation a step further to include individual liability, but I hope we will make progress on that in Committee.
8.42 pm
Stewart Hosie (Dundee, East) (SNP): The Liberal Democrat spokesman, the hon. Member for Kingston and Surbiton (Mr. Davey), mentioned Scotland in his speech. It is worth reminding the House how Scotland ended up being in the scope of the Bill. The Centre for Corporate Accountability, which other hon. Members have mentioned, summed up the position rather well:
“Ever since the Law Commission first discussed reform of the law of manslaughter in 1994, it has always been assumed that there would...be separate legislation for Scotland. The sudden decision to include Scotland in this Bill”—
the Bill before the House today—
“raises the question of how the Westminster Parliament can now legislate on corporate homicide, clearly a criminal law issue, where Scotland has long had separate laws and process from England and Wales. For this reason, CCA questions the soundness of the decision to include Scotland in the scope of the Bill.”
Let me recap the chronology up to the present point. In 2005, the Scottish Executive published a report on corporate homicide by their expert group. The report was welcomed by the Labour-Liberal Executive and by the whole Scottish Parliament, yet the Executive took no action. Instead, they deferred to the UK Government in support of the then draft Corporate Manslaughter and Corporate Homicide Bill, which did not amend Scottish common law.
In June this year, the Labour MSP Karen Gillon introduced, with all-party support, the Culpable Homicide (Scotland) Bill, which set out the criteria by which an individual may be guilty of culpable homicide, what offences were considered to constitute culpable homicide and how an organisation may be held liable for those offences. She revised the Bill in early September, but then withdrew it on 29 September, only a short time ago.
It is worth pointing out that the Scottish Bill enjoyed extensive support among unions in Scotland and in the rest of the UK. At that time, they felt that the Bill before us—referred to as “the English Bill”—did not go far enough in creating a deterrent against endangering workers and citizens alike. Indeed, the Transport and General Workers Union, to which a number of Labour Members have referred, says that it
“firmly believes that the Scottish Parliament should support legislation which will hold negligent employers and the individuals who hide behind the corporate veil to account.”
However, we are where we are and this is not a Scottish criminal Bill, but a UK health and safety Bill. I have listened to all the comments made by Members on both sides of the Chamber, and although there is unhappiness about some of the wording, there is genuine relief that we have something with which to work.
There are concerns that are common to Members on both sides of the Chamber. One is the lack of personal liability—the hon. Member for Lanark and Hamilton, East (Mr. Hood) made that point best. Other Members spoke about the difference between private organisations and some public bodies. There is the issue of the legal arguments about the fact that there is still a requirement for a duty of care. The hon. Member for Eccles (Ian Stewart) put it best when he described the inconsistency whereby individual directors were charged, prosecuted and convicted under certain claims, but not under corporate homicide, when the death of an individual or individuals occurred.
I shall briefly discuss the Scottish position, before commenting on the issue of senior managers, as I suspect that that will form the basis of the most significant debates in Committee and on Report. In Scotland, it is possible to convict a company of a common law crime if the prosecution can identify an individual or a group of individuals who were the “controlling mind” of a company—that is, whose acts and state of mind could be said to be that of the company itself—and who were guilty of that crime.
The new Bill certainly removes the need to prosecute an individual before prosecuting an organisation, which is welcome, and it bases an offence on the way in which organisations are managed and organised. However, for the new offence to be committed, it is not
sufficient that the death was caused by a gross breach in the way in which an organisation was organised and managed; the failure must have been, or must be, at a senior manager level. The senior manager is defined as a person who
“plays a significant role in...the making of decisions about how the whole or a substantial part of”
“activities are to be managed or organised, or...the actual management or organising of the whole or a substantial part of those activities.”
In effect, that means that under the Bill only failures made by the most senior managers of a company would result in a company being prosecuted for corporate homicide. It means, too, that however serious the failures outside the management circle, the company may well escape prosecution under the legislation. That poses a danger because while small and family businesses and businesses with simple management structures may be easily subject to the new law, as they were with previous measures, large companies with complicated management structures may well escape prosecution. Actions taken on their behalf by junior managers—perhaps by foremen, particularly on building sites—that lead to the death of individuals could result in a company escaping prosecution.
Ann McKechin (Glasgow, North) (Lab): Earlier today, the Home Secretary stated that individual directors could still be prosecuted under the common law offence of manslaughter, but the hon. Gentleman may be aware that in Scotland the offence of culpable homicide in common law does not include a definition of gross negligence. Does he accept that the common law position in Scotland needs to be revised, too, so that we can achieve some degree of equivalence?
Stewart Hosie: I certainly do. Whether or not the law is passed, either as it is or amended, we will have to revisit the position in Scotland, if not to achieve an absolutely comparable position, certainly to ensure that there are no loopholes in the Scottish common law position. I certainly agree to that extent.
I want a good law, as does everyone in the Chamber, which adds to the protection for workers and customers, and does not unnecessarily chase, harass, or penalise directors, but forces a change in culture so that that is no longer necessary. As other Members have said, I suspect that the Bill as drafted does not address all our concerns. I hope that the Minister can give us some comfort in his summing up, and I very much look forward to amendments that will be tabled, both in Committee and during further proceedings on the Bill.
8.49 pm
Mr. Frank Doran (Aberdeen, North) (Lab): This Bill has been a long time coming, as many of my hon. Friends and other Members have said. I am sure that it is clear to the Minister that it does not meet the aspirations of many of us who have argued over many years for the creation of a statutory offence of corporate killing. For all that, I welcome the Bill and congratulate my hon. Friend on securing it. It is important that we have established the principle and can move on from there.
For many of us who speak in today’s debate, this is not just an intellectual or even ideological issue. Our motivation comes from practical experience, as was well exemplified by my hon. Friend the Member for Lanark and Hamilton, East (Mr. Hood). In my case, as a young solicitor in the north-east of Scotland, I dealt with many personal injury cases, a high proportion of which came from the North sea oil and gas industry. I remember one particular case in which an oil worker had been seriously injured on a drill floor. The circumstances of the case and the way in which he was treated after the incident were horrifying but not unusual. I was negotiating damages on the worker’s behalf with a representative of an American insurance company. After we had gone through the nitty-gritty of the case and done our bargaining, I asked him why his company tolerated its client’s behaviour and the lack of a proper safety system. His response was fairly blunt and shocking. He told me that it was cheaper for oil companies to pay out higher premiums than it was to stop production or to interfere with processes.
I am glad to say that that situation has changed. That incident happened at a time when the North sea oil and gas industry was being opened up and there was a Klondike mentality. The consequences were obvious in the number of serious injuries and deaths but, while the deaths were limited to individual incidents, the lack of a safety culture was tolerated, not only by the insurance companies and their clients but by the then Government.
My second practical lesson concerned the inevitable consequence of that lack of safety culture: a major disaster in the North sea. In July 1988, the Piper Alpha oil production platform exploded and 167 men were killed. That is still the worst ever disaster in the oil and gas industry anywhere in the world. The then Government ordered an inquiry under Lord Cullen. As expected, he discovered a very poor safety culture and his detailed report showed failings around a wide range of operations and functions on the platform.
When I look back at that difficult period in the immediate aftermath of the disaster, I can remember that many people in the oil and gas industry were stunned that the platforms that they had built—even one on the scale of Piper—were not capable of withstanding an explosion. What is more shocking now than anything else, though, is the complete lack of surprise that we all had about just how poor safety in the North sea oil and gas industry was. It was common currency that the disaster could have happened on any one of a number of platforms. I think that we all just accepted that it came with the territory.
It was not only the operating company, Occidental, that was at fault. The Cullen report revealed that in June 1987, a year before the disaster, there had been a fatality on Piper Alpha. Department of Energy inspectors—the inspectorate at the time—inspected the platform and pointed out a catalogue of deficiencies. In June 1988, they inspected it again to follow up their original inspection. It is clear from Lord Cullen’s report that none of the deficiencies pointed out in the earlier inspections, which had led to the death of a worker, had been remedied and that there had been no improvement. Less than a month after that last inspection, Piper Alpha exploded.
There were serious failings in the operator safety systems and even more serious failings in the Department of Energy and the regulators’ inspections. There should have been prosecutions for corporate killing against the oil company operators and against the Department of Energy. The Lord Advocate of Scotland decided not to prosecute Occidental and there was no possibility of a prosecution against the Department of Energy because of Crown immunity. Both could have been prosecuted under the Bill. It is welcome to remedy those failures alone, particularly in the sense that it removes Crown immunity, in circumstances that are of course limited, but important.
I should like to refer to several points of detail. Some have already been mentioned and I shall rattle through them fairly quickly. Mindful of the comments made by the hon. Member for Dundee, East (Stewart Hosie), I welcome the fact that we have a UK Bill that recognises that there are different legal systems that provide a common set of principles and approach. Company law, employment law and health and safety at work law operate across the whole of the UK, and that approach allows us to have some consistency. There are points of detail relating to the Scottish legal system that will have to be addressed and I hope that the Minister will be able to deal with them in Committee.
On senior managers, I welcome the comments that the Home Secretary made earlier and hope that the Government will be able to deal with the many points that have been raised on this issue on both sides of the House. The last thing that we want is a Bill that provides loopholes to companies that will make it even more difficult to get a prosecution. This is an important issue, and I look forward to hearing the results of the Minister’s deliberations.
The most difficult issue, and probably the most contentious, is that of individual liability. I listened carefully to the Home Secretary earlier and I accept that it is important to focus on corporate responsibility. However, I find it difficult to understand why the Bill is drafted as it is, when individual directors and managers can be prosecuted under section 37 of the Health and Safety at Work, etc. Act 1974 in circumstances in which corporate responsibility is also relevant. It is important that Ministers should listen to the strong points that have been raised on this issue today.
There is also the question of the extent of liability and the exclusion of non-incorporated bodies and I know that my hon. Friend the Member for Glasgow, North (Ann McKechin) wants to make an issue of that in relation to the difference between partnership law in Scotland and England. That provision creates a particular problem, because the building and construction industry has one of the highest rates of industrial injuries and deaths, and a large proportion of the contractors and sub-contractors in that industry are not incorporated bodies. We must look at the issue very carefully.
The Bill provides for only two penalties: fines and remedial orders. I shall be interested to hear how the Minister expects clause 10 to operate in this respect. It is unfortunate that the Government have not taken the opportunity to be more imaginative in regard to the way in which penalties could be applied. I know that representations have been made by the TUC, among
others, about extending the range of penalties available. For example, it has proposed a penalty of corporate probation, which is quite a novel idea that I had not heard of before the TUC raised it with me. I have now been given an extremely interesting paper on it. The disqualification of directors, among other measures, could also provide incentives to ensure that companies take the legislation seriously and make a real commitment to improving their safety culture.
I think that I am the only person to raise this next issue. I practised law for the last time nearly 20 years ago, so I am rusty, but I was a wee bit worried when I read clause 22(2), which provides:
“Section 1 does not apply in relation to anything done or omitted before the commencement of that section.”
I understand the principle that legislation should not be retrospective. However, that subsection seems to provide a defence to a company that had procedures in place before the commencement of the Act that resulted in the death of one of its employees after its commencement. I might be misreading that provision—as I said, I am very rusty in the legal area—but I hope that a court would not use it as a basis on which to acquit if a company had done nothing since the establishment of its procedures until the death of the worker in those circumstances. If there is a fundamental weakness in a safety system, or a decision that leads to a death, that is a continuing matter until it is changed or until there are consequences. I would not want to rely on the ingenuity of the judiciary to make that decision for me and I would be grateful if the Minister could examine that subsection again.
For many of us who have had experience of a death at work caused by criminal negligence, including the families and survivor friends, there is a great deal of unfinished business. We cannot turn back the clock, but the Bill will help many people to find some closure and I support it wholeheartedly.
8.59 pm
Mr. James Clappison (Hertsmere) (Con): The hon. Member for Eccles (Ian Stewart) said that this was not nanny state legislation. I agreed with the generality of his remarks and with that particular remark. In recent years, we have had perhaps several nurseries-full of nanny state legislation, but this is not nanny state legislation. This is an important area of the law, in which we need improvement on present practice and it is right for both Front Benches to look for a consensus in the search for that improvement.
It was also the hon. Member for Eccles who underlined the seriousness of what is at stake by mentioning a number of tragic incidents. He mentioned Hatfield, which is close to my constituency, and Potter’s Bar, which is in my constituency. I strongly sympathise with all who have complained about the delay in the resolution of such tragic incidents. Three and a half years after the Potter’s Bar rail crash, my constituents are still waiting for an inquiry that would give them answers to their questions. The family of my constituent, Agnes Quinlevan, who lost her life, are waiting for recognition of the value of that life.
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