9 GROSS MANAGEMENT FAILURE
195. We have stated (para 169) that we believe that
the best way of capturing the essence of corporate culpability
is to employ the Law Commission's proposed concept of a "management
failure" which, following the Commission's proposals, should
be defined as "conduct falling far below what can reasonably
be expected of the corporation in the circumstances". Drawing
on the analogy of gross negligence manslaughter we believe that
such a failure is best described as a "gross management failure".
196. One of the criticisms of the Law Commission's
management failure test was that it was potentially too vague.
We agree with that criticism and, while rejecting the notion of
a duty of care (para 105) which is crucial in clause 3, we welcome
the proposed guidance in that clause aimed at aiding the jury
in their determination of whether there has been a gross breach.
If the concept of "duty of care" is removed from the
Bill this guidance will be relevant to determining whether there
has been a "gross management failure" rather than a
gross breach of a duty. Some of the criteria employed in clause
3 could be a useful starting point in providing assistance to
the jury.
197. In particular, and as discussed earlier (paras
181 to 187), we welcome the proposal in clause 3 of the Bill that
the jury be required to have regard to whether the organisation
has failed to comply with relevant health and safety legislation
and guidance or any other relevant legislation and that they consider
how serious was the failure to comply. This is an appropriate
mechanism for assisting the jury to determine whether there has
been a gross management failure. We believe, however, that the
jury should be given further assistance in measuring the seriousness
of the failure to comply and would recommend that they be required
to consider whether a corporate culture existed in the organisation
that directed, encouraged, tolerated or otherwise led to that
management failure. We believe that such a consideration is the
most appropriate way of assessing corporate culpability.
198. Such a provision might read as follows:
"3. Gross management failure
(1) A management failure is a "gross management
failure" if the failure in question constitutes conduct falling
far below what can reasonably be expected of the organisation
in the circumstances.
(2) In deciding that question the jury must consider
whether the evidence shows that the organisation failed to comply
with any health and safety legislation and related guidance and
any other relevant legislation and, if so, how serious was the
failure to comply.
(3) In assessing the seriousness of the failure
to comply, the jury may take account any of the following matters
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(4) In subsection (2) "health and safety
legislation" means any enactment dealing with health and
safety matters, including in particular the Health and Safety
at Work etc Act 1974 (c.37), or any legislation made under such
an enactment.
(5) In subsection (3) "corporate culture"
means an attitude, policy, rule, course of conduct or practice
existing within the corporation generally or in that part of the
corporation where the relevant conduct occurs".
199. We urge the Government to consider returning
to the Law Commission's original proposal as a starting point.
We acknowledge the argument that the Law Commission's "management
failure" test could cover failings within a company that
occur at too low a level to be fairly associated with the company
as a whole. Nevertheless, we recommend that the Home Office should
address this specific concern without abandoning the Law Commission's
general approach. We suggest that juries be assisted in their
task by being required to consider whether there has been a serious
breach of health and safety legislation and guidance or other
relevant legislation. In assessing this they could consider whether
a corporate culture existed in the organisation that encouraged,
tolerated or led to that management failure.
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