Examination of Witnesses (Questions 522
- 539)
MONDAY 21 NOVEMBER 2005
MR BILL
CALLAGHAN AND
MR JONATHAN
REES
Q522 Chairman: Good afternoon, Mr
Callaghan and Mr Rees. Thank you for joining us. I think you have
been able to listen in to the first session. Is there anything
that you want to say to us at the outset, or shall we go straight
into the questions?
Mr Callaghan: Chairman, given
the time, probably to plunge straight into the questioning, but
to emphasize that the Commission do support reform of the law
as set out in the Home Office document.
Q523 Chairman: Thank you very much, indeed.
To follow on from that really, we have had a number of people
who have said, I suppose, in Hatfield and other recent cases that
the courts seem to be changing, we are getting higher penalties
in any case for prosecutions under the Health and Safety at Work
legislation. Is this legislation now needed in the way that it
might have been when the campaign for it started 20 years ago?
Mr Callaghan: The clear answer
is yes. I think the Health and Safety at Work Act is working well,
and evidence for that is the fact that we have one of the best
safety records in Europe, but—and this is a big "but"—I
do not regard the current level of workplace fatalities of around
220 as acceptable and I think we can do better. As Sir Igor was
arguing earlier, we are distinguishing those rare occasions where
actions by a corporate body are truly criminal from the regulatory
offences which are dealt with by HSE and our local authority partners.
So we are looking at a limited number of cases but I think it
is important that, where society does think that organisations
have fallen way below the standards which are acceptable, there
should be a way of marking that.
Q524 Chairman: If a death occurs
under those circumstances it is clearly unacceptable, and I think
that is why the criminal offence is being introduced. Do you actually
believe though that we will see a reduction in the number of deaths
if this law is on the statute book? Clearly, it is possible that
one could have higher penalties and a criminal conviction for
those responsible but that it actually would not change practice.
Mr Callaghan: I think, to revert
to your earlier question, higher penalties do send out a very
powerful deterrent message, and certainly the Transco case and
the Balfour Beatty and Network Rail, as it was, case sent out
some very powerful messages, but I do think the courts should
be taking health and safety offences seriously. I would hope they
would take corporate manslaughter seriously. There is a strong
reputational penalty that companies would pay if they are found
guilty of corporate manslaughter. I do not believe any company
would want to be tarnished in that way. Just talking to companies
who are anticipating the introduction of this offence, they are
beginning to take action to make sure that they are taking preventive
measures to make sure they are not found guilty of such an offence.
Q525 Chairman: So if we look five
or ten years down the line, you would actually expect there to
be a reduction in the number of deaths, all other things being
equal?
Mr Callaghan: All other things
being equal, and it might be quite difficult to disentangle that,
but I think one purpose of health and safety law and I think of
the new law of corporate manslaughter will be to send a very powerful
deterrent message.
Q526 Natascha Engel: We have had
a number of industry representatives who have argued very strongly
in their evidence that introducing individual liability in the
draft Bill would actually undermine a good health and safety culture
at work. Do you agree with that?
Mr Callaghan: As I understand
the Bill, we are talking about offences by a corporate body rather
than an individual. The Commission support the broad outline of
the Bill because it is directed at a lacuna in the system. You
have talked, obviously, a lot about the problem of the identification
principle, and the inability to prove that someone had a directing
mind in large organisations has been a big problem with the current
law as is drafted. So I think the current common law position
is unsatisfactory and that is one reason for changing the law.
I have to say the whole issue of individual director's liabilities
is quite a controversial one, and the Commission will be discussing
this in a wider context about health and safety law next month.
Chairman, I cannot anticipate what conclusions the Commission
might come to but I hope any conclusions we do reach next month
we can feed through to you.
Chairman: That may answer one of our
later questions.
Q527 Natascha Engel: Again, this
is within the framework of a very good health and safety record
in this country, but why do you think that so few company directors
have been convicted of an individual offence under 37(1) of the
Health and Safety at Work Act?
Mr Callaghan: Just to give the
Committee some idea of the orders of magnitude, last year there
were 712 HSE prosecutions in total: 25 were against individuals
and nine were directors or managers under section 37, and the
other individual prosecutions were therefore under section 7 of
the Act. I think the reason for that is that we see that a large
proportion of health and safety breaches arise from organisational
systemic failures of management systems rather than the action
of one individual person. HSE's enforcement activity under the
existing Health and Safety at Work Act reflects that. So when
we look at why incidents happen in the workplace, we are looking
at systemic organisational factors and looking at root causes
rather than necessarily at one person.
Q528 Natascha Engel: What difficulties
does the HSE face when prosecuting such an offence?
Mr Callaghan: Section 37? Jonathan
may want to pick up on the point. I think it is fair to say that
section 37 has not been used extensively in recent years though
there has been an increase in the number of cases taken. As the
Committee will know, before a section 37 case can be proved, there
has to be an offence under the general sections of the Health
and Safety at Work Act.
Mr Rees: It is worth underlining,
as the Committee probably knows, that it is much easier to make
a causal link in a small firm between what the, as we call it,
duty holder or the employer or director did and the actual breach.
So in practice, nearly all of our successful prosecutions under
section 37 have been against small firms.
Q529 Natascha Engel: Following on
from that, do proceedings for disqualification follow all cases
when directors are convicted under that section?
Mr Rees: No, it is not automatic.
But we, and indeed the CPS in most cases which are already taken,
the more serious cases, can decide to ask for disqualification.
Q530 Natascha Engel: Do you know
how many have been of those you have listed?
Mr Rees: Between 1994 and 2004
there have been about 86 section 37 convictions. The number of
disqualifications is much lower than that. Given that we run roughly,
let us say, 1,000 prosecutions a year over 10 years, you are talking
of less than one per cent. So it is very small, and indeed, that
is part of what the Chair said. That is one of the issues which
the Health and Safety Commission will be looking at at its meeting
on 6 December, because clearly there is a link between directors'
duties and directors' disqualifications.
Mr Callaghan: Can I add that the
Hampton Report looked at regulators in general and whether the
existing penalty regime was working adequately, and we are looking
at undertaking a longer-term review of penalties in the light
of what Hampton said.
Mr Rees: Just to be absolutely
clear on that figure, it is ten disqualifications since 1986.
There is not naturally a link between cases against directors
and disqualifications. We do take cases and disqualify people
who might be prosecuted under section 2, 3 or 7 of the Act but
it is very, very small. That is clearly the main point.
Q531 Colin Burgon: Could I ask Mr
Rees this question? Mr Callaghan was helpfully expansive on the
duties of directors, and indeed, he said it was a controversial
question, so I will give Mr Rees the chance to enter into this
controversy. Many of the witnesses that have given evidence have
told us that the Bill should have been used really to introduce
statutory health and safety duties on directors. What is your
view of that? Do you agree with that thrust of argument, and if
you do, where would be the appropriate place to do so?
Mr Rees: Obviously, they are very
linked issues, but this is a Bill about corporate manslaughter.
There is a separate debate to be had about whether or not the
existing law under section 37 needs to be strengthened. As we
know, there are very strong views between, on the one hand, the
TUC and some of the trade union people who you have had who have
come along and said, "We actually think that section 37 ought
to be made more positive" and equally there are strong views
from the CBI, EEF and IoD who have said, "No, we don't really
think that is the right way to go." We will have to put a
paper to the Commission for the meeting when it discusses it and
we will try and set out what the arguments are for and against,
but ultimately it will be a political judgement. The fact is that
what drives behaviour in terms of trying to improve health and
safety is not a simple causal link. There is no doubt that fear
of prosecution or fear of jail actually drives behaviour. It is
not the only thing that drives behaviour, and our policy over
the last five years has been to try and get directors to understand
what their existing duties are. I just underline the point that
directors do have existing duties under the existing health and
safety legislation. The question is, are they sufficient? Could
they be better? But there is no doubt that they have existing
duties, and we too could look at whether we can do more in terms
of prosecution under the existing legislation.
Q532 Chairman: Our problem is that
at the time you are meeting we have to finalise our report, and
a lot of people have said to us that this Bill is flawed because
it does not provide for individual liability and they are not
happy with the route of the individual manslaughter by gross negligence.
One of the ways of resolving that clearly would be potentially
to have these duties of directors under health and safety legislation.
So although you say it is a separate issue, in terms of the way
Parliament might put this, the outcome of your decision might
have major implications for the way in which this Bill should
be drafted. Would you accept that?
Mr Rees: I am pretty sure if a
Bill is introduced, there will be amendments to either change
or strengthen section 37. So yes, I think it is very important
that we come out with a clear view, and the constitutional position
is that the Executive will advise the Commission, who will advise
Ministers.
Q533 Chairman: In terms of your overall
view as an organisation, irrespective of the rights and wrongs
of it, there is a body of evidence that has been put to us that
says it is an illusion to think that you can in one piece of legislation
incorporate both corporate liability and individual liability.
Given your experience, where so little of your activity ends up
in individual liability at director level, so much of it at corporate
responsibility, do you think that is actually true and are we
better just to concentrate on the corporate offence?
Mr Callaghan: If I could express
a view, I have been in this job now for just about six years,
and one of the first things I did was to reply to a Home Office
consultation paper on this very topic. I think we have been waiting
for the legislation for some time and my personal view is that
I would like to move ahead with the Bill as drafted. I cannot
see any reason that the absence of individual liability would
make it more difficult to prosecute companies for manslaughter,
and that is the big gap in the present legislation which I think
everyone recognises. So that is the immediate issue. I think the
issue then is what should then be the responsibilities of individual
directors more broadly in health and safety law? That is something
which the Commission will be discussing. I think it is fair to
say that all of the Commission are agreed that directors ought
to be taking health and safety more seriously and we have made
some considerable progress in promulgating our guidance for directors,
and evidence suggests that more companies are considering health
and safety at board level. Whether we should go one step further,
either by changing section 37 or recommending changes to other
pieces of legislation, I cannot anticipate the outcome. I think
one thing I should also say is that the Commission do think that
it would be wrong, thinking about the law of unintended consequences,
to come up with a system whereby individuals effectively become
scapegoated or that the responsibility could be "subcontracted"
from a senior manager to someone else. So we have to make sure
that we do not run into those laws of unintended consequences.
Q534 Chairman: You heard our discussion
earlier about unincorporated bodies. You are able to prosecute
unincorporated bodies. Do you in practice see any reason why they
should not be included in this legislation?
Mr Callaghan: Our view is that
the net should be cast as wide as possible. As I say, I am not
such an expert as Sir Igor in looking at these issues, but I think
it should be cast as wide as possible.
Q535 Chairman: Do you know how many
unincorporated bodies you have successfully prosecuted?
Mr Rees: No, we do not. We asked
for that information and we do not keep it in that form.
Q536 Chairman: You are not aware
of significant problems in that area?
Mr Rees: No. Obviously, the majority
of prosecutions will tend to be in the more traditional manufacturing
area. Unincorporated companies, even large ones, will tend to
be in the services area, which do have significant problems, but
we do not record the information in that way.
Q537 Mr Clappison: You have already
made some comments about the status of health and safety legislation.
Of course, you have had the opportunity of hearing Sir Igor Judge's
comments on it, but perhaps I can give you an opportunity to comment
on what some respondents to our inquiry have said, because they
have raised concerns about the requirements in the draft Bill
that jurors consider whether or not a company has complied with
health and safety legislation and guidance when determining whether
there has been a gross breach of a duty of care. They argue that
health and safety legislation is not comprehensive and was not
designed for this purpose. Do you have any view on that?
Mr Callaghan: I share Sir Igor's
view. I would distinguish between the regulatory offences under
the Health and Safety at Work Act from a matter which is clearly
criminal, which is manslaughter.
Mr Rees: I agree.
Q538 Mr Rooney: Are you concerned
about the exemptions in the Bill for exclusively public functions
and public policy decisions?
Mr Callaghan: I am glad that the
document says that corporate manslaughter should in general apply
to the Crown, and obviously there are some exemptions in the draft
Bill—I was going to say limited exemptions. I have to say,
Chairman, there is a danger that these could prove to be wide-ranging.
If I could just elaborate concerns on this, section 10 deals with
the armed forces, so if I could take that first, we fully recognise
the need for our armed forces to be combat-ready but the combination
of clause 10(1)(a) and 3(b) seems to be quite wide-ranging, because
if you read 10(1)(a) and 3(b), they could be covering almost any
activity, it might be argued. So I would want that to be looked
at. Turning to the matters which are raised in clause 4, I recognise
the argument for public policy and also "exclusively public
functions" but I have to say that there would be concern
amongst all of my Commission colleagues if the interpretation
of this were to lead to widespread exceptions. I have to say that
would come from the employer members, those employers who are
bidding for work in the public sector who would feel that competition
was not fair, and from my trade union colleagues who would draw
attention to differing standards of protection. So I do not see
any reason why the vast bulk of public sector employment should
not be covered by the provisions. You have to recognise there
is a need for some limited exceptions. Perhaps one last point
on this, Chairman, if I may. Crown immunity in general is one
of the issues that has held up this matter for so long, and I
would hope, first of all, that Parliament would take the opportunity
to remove Crown immunity for Health and Safety at Work Act offences,
but having established that this Bill does in general apply to
the Crown, my personal view is I would not want to spend another
five years debating the details of Crown immunity; I would rather
get on with it, I have to say.
Q539 Mr Rooney: Can I just pursue
this slightly? You have mentioned this in relation to employees
but of course, in all the big disasters, it is actually the public
that has suffered, not employees. I am not picking on any particular
bit, say the Food Standards Agency, but perhaps there is some
outbreak, E. coli, salmonella, whatever, and somebody is grossly
negligent in the advice that is given and there are numbers of
public deaths. At the moment they could not be prosecuted because
they are not in the schedule, so they are excluded under public
function. Am I right in thinking you are not happy with the limited
numbers of people that are in the schedule? You think it should
be as wide as possible? What I am more interested in is who you
think should be exempt. You are in favour of abolishing Crown
immunity. You seem to want to extend it. Is there any part of
government that you think should be exempt?
Mr Callaghan: In terms of, as
the Bill explains, matters of public policy, I can understand
why that exception is there, that of people who are giving advice,
and those decisions, of course, can be challenged through other
means. In terms of public sector employment, and the activities
either of those bodies to employees or to members of the public,
I would not want to see widespread exceptions.
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