Examination of Witnesses (Questions 49
- 59)
MONDAY 24 OCTOBER 2005
MR DAVID
BERGMAN AND
PROFESSOR STEVE
TOMBS
Q49 Chairman: Mr Bergman, can you
introduce yourself briefly and your organisation and also introduce
Professor Tombs?
Mr Bergman: We are both from the
same organisation. We are from a charity called the Centre for
Corporate Accountability. I am the Executive Director of the organisation.
Steve Tombs is the Chair of the Board of Directors of the organisation.
We are a charity concerned with work and public safety. Our focus
is primarily on law enforcement and corporate criminal accountability
in relationship to that. Our prime activity is the provision of
free and independent advice to families bereaved from work-related
deaths, looking at investigation and prosecution issues arising
from those deaths. Also, we undertake research and advocacy.
Q50 Chairman: Thank you. I think you
have been in for the previous two sessions. There is a general
welcome for the fact that legislation is here but perhaps some
reservations about its value in its current form. What is your
own assessment about the value of having this Bill at this time?
Mr Bergman: We may be not quite
as pessimistic as some of the other speakers. We think that it
will have a bite. Although the management failure must be a management
failure of senior managers, and we do feel that is a serious limitation,
despite that it will still have an impact, nonetheless. The Government
says that it will increase the number of prosecutions by five,
maybe it will be more than that, I do not know, but certainly
it will have an impact, symbolic and also practical, but clearly
we do feel there are significant limitations to the final draft.
Q51 Chairman: Clearly, if the impact
does not just reduce perhaps the five deaths a year that might
lead to prosecutions but some of the several hundred a year that
have been referred to by earlier witnesses in accidents, in one
way or another, that will be a very good thing. How have you assessed
the real impact of the Bill in terms of its regulatory burden
on companies, whether it will, as some have suggested, get in
the way of entrepreneurial activity, whether, in fact, it might
simply just produce, right across British business and the public
sector, an excessively risk-averse culture, which would be welcome
in terms of the impact on people's lives but might actually mean
the whole economy operating in a very ineffective and inefficient
way? Have you been able to assess the impact of the measures that
you support on the way in which the country operates?
Mr Bergman: The first thing to
say is that the actual Bill itself does not impose any additional
duties at all upon companies or company directors, it simply captures
a particular form of conduct on the part of companies, conduct
which is viewed to be particularly serious, and define that as
a criminal offence. That is a very important thing to note because
often there is a misconception that the new offence is going to
impose further duties. In relationship to the risk-averse question,
clearly the purpose of the Bill is to deter a certain form of
risk-averse culture and risk-averse behaviour. We are very sceptical
of a lot of the rhetoric about risk-averse conduct and the way
that is being used to try to question the merits of the Bill,
because clearly an offence of this kind will, we hope, deter inappropriate
risk-averse conduct that goes on at the moment. We do feel, if
a company is complying currently with health and safety law, they
have absolutely nothing to fear from this offence, and that is
important.
Q52 Chairman: I do not want to put
words into your mouth but are you saying that if a company carries
out its current legal responsibilities properly there is no danger
that they will end up being prosecuted under this new piece of
legislation?
Mr Bergman: That is absolutely
the case. I do not think anyone doubts that, whether it is Government,
business or ourselves.
Professor Tombs: Just to go back
to the more general issue, I am going to be a bit crafty here
and I am going to put on my academic hat. I am a Professor of
Sociology who has researched this area for many years. I see no
evidence whatsoever. David referred to the rhetoric around the
effects of regulation, and you used the phrase "regulatory
burden". There is actually no evidence that I know of, and
I have been looking at this area for some 15 years, that increased
regulation of business leads to a decline in productive activity,
leads to something called an increase in risk-aversion or leads
to a decline in investment. In fact, there are very many good
arguments why regulating business more effectively, in a whole
series of areas, not just in terms of health and safety, how creating
equal conditions of competition amongst all companies, so that
the companies which are complying with the law are not carrying
an unfair burden in terms of costs of compliance, that creating
a level playing-field actually improves levels of productivity
and improves the health of a sector.
Q53 Chairman: When you say there
is no evidence, just to press you on this point because it is
important, amongst the people who have suggested what I have said
about the regulatory burden include British Gas, the NHS Confederation
in the public sector, the British Retail Consortium, the Business
Services Association and the CBI. Can you explain, because obviously
you deal with those industries, why such a broad range of bodies
all misunderstand the legislation in the way that they do?
Mr Bergman: I will make just one,
brief point, to say that in relation to any proposal that technically
could be difficult or create difficulties for business as suggested
by Government, or suggested by others than the Government—it
is typical for that sort of language to be used, by business,
it is not in a specific response to this particular offence. I
do not think that these particular organisations which make this
point are really making a comment about this Bill, they are making
a political point in order to try to counter the people who may
be wanting to make changes to the current Bill or perhaps even
to try to prevent the Bill from being enacted in the first place.
Q54 Mr Clappison: You have argued
that the offence should apply to all employing organisations,
not just incorporated ones; that would include, for example, partnerships.
Could you say a little bit more about how you would approach this
issue?
Mr Bergman: First of all, we approach
this issue on a matter of principle. One should go back to, for
example, the Government's consultation document in 2000, where
the Government itself proposed that the offence should apply to
unincorporated bodies. Clearly, in 2000, the Government thought
it was practical for that to take place. In our view, when you
have an opportunity to create a new offence of manslaughter, like
this one, it should be as inclusive as possible and it should
apply to all businesses and all undertakings. A public body, or
a partnership, or other forms of unincorporated associations,
can create the same kinds of risk and cause the same deaths as
those businesses that are set up for profit, so, in our view,
in principle, any new offence should apply to them. The Government
accepts that there are no technical problems in applying this
offence to them. We say in our response that, first of all, many
unincorporated bodies have the same stability of management as
private companies. It is true that they do not have a current
duty of care but it is easy to legislate that, so that, for the
purpose of this particular offence, they do have a duty of care.
We do not see any particular obstacles that should prevent the
offence applying to unincorporated bodies. The debate has been
going on for 15 years. This is a "once in a generation"
opportunity perhaps. I do not know. Clearly, it has been a long
time and it is important that this Bill, if it does goes through,
is inclusive. Although there may not be many situations that are
known now where an unincorporated body has caused a death, if
that is the case undoubtedly there will be cases in the future
and if we create a Bill that does not allow for that unincorporated
body to be prosecuted there will be cries of "injustice"
and why not try to avoid that possibility.
Professor Tombs: Going back, in
a sense, to first principles, one of the reasons why we are here,
and people around this table know this better than I do, is partly
because of the kind of landmark prosecution that failed following
the Zeebrugge disaster and then, through the nineties, the emerging
sense that the law simply could not be applied to certain kinds
of undertaking, large companies, and a sense of outrage, I think,
a sense of injustice to which David has just referred. That is
why, I think, as a principle at this moment, all things being
equal, that where possible, this offence needs to be as inclusive
as possible. Otherwise we will be in the same situation -4, -5,
-10 or 15 years down the line, where a sense of injustice emerges
because certain Crown bodies or certain unincorporated entities
are not covered by the law and there appears to be, popularly,
the sense that the law applies to some kinds of organisations
and not to others.
Q55 Mr Clappison: On the same general
theme of getting it right now, as it were, in general terms you
seem to welcome the idea of linking corporate guilt to management
failure. Can you say why you favour this approach over other options
which we have heard about, and no doubt you are aware of and you
have heard of this afternoon, such as corporate culture?
Mr Bergman: What you have got
to recognise is the way this debate has developed in Britain.
In 1994 the Law Commission came out with its First Report and
then in 1996 was the key Law Commission Report which proposed
a new offence of corporate killing and the concept of management
failure was inherent in that particular Law Commission Bill. The
Government in 2000 then supported that Law Commission Bill. Our
view is that there are alternative ways of creating a new offence.
In Australia the concept of "corporate culture" is used,
in America a vicarious liability with a due diligence test is
used. These are all perfectly possible tests that could apply
but we are a practical organisation and clearly we had to engage
with what was the offence that was really being discussed at the
heart of Government and that was the offence which had the concept
of management failure. Therefore, we have been looking at that
offence, looking at management failure, because of the fact that
the Government has been proposing that.
Q56 Colin Burgon: CCA have got some
concerns about the way "senior manager" has been defined
in the draft Bill. Could any definition of "senior manager"
avoid the risk that companies will seek to avoid liability by
delegating that responsibility below the level of senior manager?
Mr Bergman: This senior manager
test is perhaps at the heart of criticisms of this Bill. Really
it is a serious restriction compared with what had been proposed
by the Law Commission and supported by the Government in 1996
and 2000 and does limit severely the circumstances in which a
company or organisation will be able to be prosecuted, because
you have to show the way in which the organisation is managed
by a senior manager. In our view, we understand why it may have
been inappropriate for the Government to have supported the previous
proposal which simply required a management failure, the reason
being that it would have allowed an organisation to be prosecuted
simply perhaps on the basis of failures at a supervisory level.
If these supervisory failures were sufficiently serious they could
be deemed to be a management failure that could result in a company
being prosecuted and we can understand the Government's concerns
about that. However, what we are concerned about is that the Government
does not go the other way and make it effectively so difficult
to prove the offence that the company escapes culpability where
there are serious failures within an organisation. What we are
proposing is that there is an alternative test for culpability,
along with the current one, so that where you had a management
failure in an organisation and that management failure was known
about, or ought to have been known about, by a senior manager,
and obviously that management failure fell far below what could
be reasonably expected, in those circumstances a company would
be able to be prosecuted. I am sorry that I did not actually answer
your key question, whether it is a real danger that companies
will delegate responsibilities down. I think that is exactly what
is promoted by this Bill and that is why it is a dangerous Bill,
apart from being not a fair Bill, because increasing incentive
is opposite to the one that the Government is supporting in relationship
to its other health and safety policies where it wants responsibility
to be at the top of an organisation. It is interesting that the
Health and Safety Executive commissioned the consultants Greenstreet
Berman to do a survey of company directors and see whether or
not, in their particular companies, they had appointed a director
in charge of health and safety. In relationship to those companies
that had not and in relationship to those companies that had delegated
responsibility down, one of the main reasons why the companies
had done that was because of the forthcoming corporate manslaughter
legislation. Of course, if you were a good corporate lawyer, that
is what you would be suggesting, not to the good companies, the
good companies no doubt would be adopting best practice, but to
those companies which wanted to try to limit their exposure as
much as possible clearly that would be the best advice to give.
Q57 Chairman: Can I pursue this further
because I want to understand it. If you have the senior manager
test, if something went badly wrong at a lower level, as it were,
and it went to court, and you went back through the minutes of
the board and it was clear that a company had devolved responsibility
downwards, in a conscious act, would it not be possible still
to prosecute the senior management, as it were, for responsibility
for that decision, in other words, for pushing it down? This is
quite crucial to our entire discussion, I think, as to whether
there is sufficient in there to catch the company that has deliberately
devolved responsibility down or whether there is not.
Mr Bergman: You are absolutely
right and that is what the Home Office's position is, that it
would be possible to prosecute a company on the basis of grossly
negligent delegation, in effect, but you would have to show that
delegation was grossly negligent. If you had a failure, a very
serious failure, at a company level and that failure may have
been known about or there may have been some understanding at
a board level, but that failure at that senior manager level was
not one that fell far below what could be reasonably expected
then you would not be able to prosecute the company. You can prosecute
the company only when the failure at a senior manager level fell
far below what could be reasonably expected. You can have a situation
where you had a very serious failure at a factory level, let us
say you can show that serious management failure was the responsibility
of a senior manager at that factory level, but that senior manager
would not be defined necessarily as a senior manager in the context
of this particular Bill. In order to connect that failure to the
company in order to prosecute them for manslaughter you would
have to show that the failure was at another level within the
company, and often that is very difficult to do, particularly
if you delegate responsibility down.
Q58 Colin Burgon: Continuing this
point, you point out that by focusing on failures by senior managers
the proposed offence would apply unequally to small and large
organisations. Is it possible to avoid this problem if the concept
of senior management failure is maintained, and if so how?
Mr Bergman: I think the senior
manager test needs to be revised. It needs to be revised in order
to ensure that it is not only situations where there are greater
failings at a senior manager level which can allow a company to
be prosecuted, a company should be able to be prosecuted where
very serious management failures were lower down in the organisation
and were known about, or ought to have been known about, by senior
managers. Why we say that it is discriminatory against large organisations
is because large organisations can delegate down and can escape
accountability in the same way as they can at the moment, it does
not deal with the current failure that the law is supposed to
be dealing with.
Q59 Justine Greening: Moving on now
to what constitutes a relevant duty of care, the draft Bill talks
about an offence being created if there is a gross breach of a
relevant duty of care. I understand that duty of care has been
built very much around the concept of negligence and I know that
the CCA has expressed some concerns about that sort of definition,
pinning it to negligence. Can you tell us what additional duties
legally you think are owed by organisations, which you think should
be on top of the negligence definition, if you like? Which ones
are relevant and why?
Mr Bergman: I think the important
thing to recognise is that we accept that you have got to ground
the offence in a breach of some kind of duty. The Home Office
did not have to latch on to civil law duties of care. In fact,
it is very peculiar, if you think about it. Why do you bring in
civil law principles into a manslaughter offence, it is a bit
peculiar, and in fact the Law Commission, in one of its reports,
which we note in our report, were against that, they thought that
you just should not be using civil law principles. The other duties
which exist are the duties that companies are being prosecuted
for every day of the week. The duties contained in safety at work
legislation are statutory duties. In our view, it would be much
more appropriate, either instead of or in addition to the duty
of care principles, to ground the offence in relationship to those
statutory duties. These duties are very well known, they have
been around for 30 years, companies have to abide by them every
day and inspectors come to their work places, inspect and ensure
compliance in relationship to them, so why not use those?
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