119. Memorandum submitted by Centrica
Plc
This response sets out the considered views
of Centrica plc and its subsidiary companies, including, but not
limited to, British Gas Services Limited, British Gas Trading
Limited and Hydrocarbon Resources Limited.
Centrica plc does not object, in principle,
to the introduction of a new statutory offence of corporate manslaughter.
We are pleased that the draft legislation does not seek to impose
individual liability on directors, company secretaries, and other
officers of the company. However, we do have concerns that, in
addition to a corporate manslaughter prosecution being brought
against a company, the existing manslaughter law could be used
to prosecute individual directors and officers. Further, in the
event of the failure of a corporate manslaughter charge, it would
be open to prosecuting authorities to bring charges against the
company and against individuals under the HSWA. Further, a successful
criminal prosecution of a company is likely to lead to civil claims
being brought against it. We presume that the Government's main
objective of the proposed legislation is to bring about improvements
in Health and Safety, and not to bring about multiple criminal
and civil remedies against companies. Please refer to our comments
in relation to page 7 paragraph 6 below with regard to prosecution
policy.
PAGE 7 PARAGRAPH
6
The following statement is made: "The extra
deterrent effect of a possible corporate manslaughter conviction
for organisations who consistently fail to meet proper standards
of health and safety will also provide a further driver for ensuring
safer working practices". We do not believe that strong evidence
exists to support this statement. We believe that passive legislation
which is used only in the aftermath of an accident is unlikely
to act as a deterrent or to actively drive safety improvements.
Further, the document states "The UK has a very strong H&S
record, but there remain unacceptably high levels of work related
deaths each year". This statement is, on the face of it,
contradictory. In any event, work related deaths have reduced
substantially in recent years without the existence of corporate
manslaughter legislation. We believe that further reductions will
be brought about by improved working practices and engagement
with organisations such as the Health and Safety Executive (HSE).
It is important that any new offence is not aimed at those companies
that consistently try to meet proper standards of health and safety.
In practice, we believe that the prosecuting
authorities are likely to prosecute, where they are unsure as
to whether the conduct in question is grave enough to do so. We
believe that prosecutions should be undertaken by the CPS, who
are less close to these issues than the HSE, and are therefore
more likely to take an objective view. We also believe that the
CPS needs to be provided with support and guidance on when and
how to prosecute this offence having regard to the public interest
test.
PAGE 9 PARAGRAPH
14
Reference is made to "management failings
by an organisation's senior managers". We are concerned that
it is unclear as to who is to be classed as a senior manager.
Such uncertainty is likely to lead to uncertainty and costly litigation.
We do not believe that the Government should rely on the courts
to determine this definition, rather that the statute should offer
certainty. A clear definition would also be more likely to push
health and safety matters higher up corporate agendas.
Reference is also made to an approach that focuses
on the arrangements and practices for carrying out an organisation's
work, rather than any immediate negligent act. We believe that
there will be pressure on companies to move towards formally certified
Health and Safety Management systems, potentially resulting in
unnecessary additional costs for businesses. Such processes would
not, by themselves, prevent poor performance, and we believe that
certification bodies would struggle to find resources of the right
calibre. Further, however good the certification process was,
there would be a danger of it becoming automatic rather than focusing
on individual risks in a dynamic way.
PAGE 9 PARAGRAPH
15
Reference is made to the management failure
amounting to "a gross breach of the duty to take reasonable
care". We support the Government's intention to provide offences
that are "clear and effective". It therefore follows
that there should be total clarity as to what constitutes a gross
breach of duty of care. Without such clarity, we believe that
there would be extensive reliance on expert testimony, leading
to lengthy and complex trials. We believe that the criminal threshold
should be higher than the civil one, and that the prosecution
should be compelled to prove that the organisation exhibited an
intent to commit a gross breach of its duty of care. An appropriate
mental element should be specifically included in the draft legislation.
PAGE 10 PARAGRAPHS
18 ONWARDS
We are concerned about the applicability of
the proposed legislation to public bodies, which, we believe,
will lead to inequality of treatment. Whilst we accept that it
would be inappropriate for the legislation to apply to certain
public bodies, such as the armed forces, we do not believe it
to be in the public interest for certain Government bodies to
be exempt. This would cause anomalies in cases where services
are jointly provided by public bodies and private organisation,
for example in relation to prison management and prisoner transportation.
The result would be to create inequality in areas in which public
bodies and private companies compete, burdening private companies
with liabilities from which such public organisations are exempt.
PAGE 12 PARAGRAPHS
26 TO 30
The document refers to senior managers having
a "significant role" or "substantial responsibility"
in an organisation. Reference is also made to the scale of physical
or practical operations. This does not appear to recognise the
fact that in corporate decision making, those with "substantial
influence" may reside in other disciplines, for example Finance
or Information Systems. Furthermore, we believe that use of these
definitions may push liability further down the organisation than
the Government intended. There is a strong case for these definitions
to be amended and tightened up.
PAGE 13 PARAGRAPH
32
Reference is made to "conduct that falls
far below what can be expected in the circumstances". Generally,
we would expect such conduct to be judged against an established
or recognised standard of good practice such as an Approved Code
of Practice. We are concerned, however, about the use of the words
"in the circumstances". This suggests that larger companies,
with substantial resources, could be judged differently from smaller
ones. Page 36 paragraph18 refers to compliance with "relevant
health and safety legislation and guidance". Whilst this
is clearly defined, it causes us concerns, as our experience is
that some Health and Safety guidance aims for impractical standards
and has been produced without consultation with organisations.
This is included in the draft Bill—section 3 (3) (b).
We must stress that it is vital that what is
assessed and measured by the prosecuting authorities and the courts
is the breach itself and not the consequences of the breach. This
is particularly important in relation to businesses such as ours,
where a single and isolated minor breach can lead to a fatality.
We believe that what should be measured is the degree of departure
from accepted standards.
PAGE 14 PARAGRAPHS
36 AND 37
Under these proposals, parent companies would
be liable if their "own management failures were a cause
of the death concerned". We do not believe this definition
is clear enough, and we therefore believe that parent companies
are as likely to be prosecuted as operating subsidiaries. However,
in large Groups, it is often the case that the main operating
subsidiaries have responsibility for health and safety, with the
parent company setting a framework for compliance. This framework
is often tailored to meet the subsidiary's specific requirements.
It is unclear as to whether the setting of such parameters would,
by virtue of the proposed legislation, impose a duty of care on
the parent company. We therefore believe that the proposed legislation
should better define the circumstances in which parent companies
may be liable. Otherwise, parent companies may decide to simply
delegate such responsibilities, in their entirety, to operating
subsidiaries.
We are also concerned that these proposals could
result, in effect, to a lifting of the corporate veil. We therefore
believe that these sections should be carefully re-examined.
PAGE 18 PARAGRAPH
54
We are very concerned that under these proposals,
courts could impose remedial orders on organisations. Such orders
might be imposed without any proper risk assessments and could
affect the whole Group—not just address the particular issue
which had contributed to the death. Further, such remedies may
also cut across enforcement measures taken by bodies such as the
HSE.
OTHER MATTERS
We would like specific clarification that Road
Traffic accidents are excluded from the ambit of the proposed
legislation.
We also believe that it would be helpful for
guidance to be produced on the range of financial penalties to
be imposed by the courts.
16 June 2005
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