|
UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 540-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE HOME AFFAIRS AND WORK AND PENSIONS COMmittees (DRAFT CORPORATE MANSLAUGHTER BILL sub-committees)
DRAFT CORPORATE MANSLAUGHTER BILL
Monday 24 October 2005 MS PAMELA DIX, MS SOPHIE TARASSENKO and MS ANNE JONES MR MIKE GRIFFITHS, MR HUGH ROBERTSON and MR BARRY CAMFIELD MR DAVID BERGMAN and MR STEVE TOMBS Evidence heard in Public Questions 1 - 69
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Home Affairs and Work and Pensions Committees (Draft Corporate Manslaughter Bill Sub-Committees) on Monday 24 October 2005 Members present Mr John Denham, in the Chair Colin Burgon Mr James Clappison Harry Cohen Mr Philip Dunne Mrs Natascha Engel Justine Greening Gwyn Prosser ________________ Memorandum submitted by Disaster Action and Simon Jones Memorial Campaign
Examination of Witnesses
Witnesses: Ms Pamela Dix, Operations Manager, Ms Stophie Tarassenko, Legal Adviser, Disaster Action and Ms Anne Jones, mother of Simon Jones, Simon Jones Memorial Campaign, examined. Q1 Chairman: Good afternoon. Thank you very much indeed for coming to give evidence to us this afternoon. As you will know, this is the first of the public hearings that the Committee has held, as part of our scrutiny of the draft Corporate Manslaughter Bill, and we are very grateful to you for coming. Perhaps if you could start, Ms Dix, and explain your organisation and its aims and then Anne Jones I will come to you for the same? Ms Dix: Thank you. We are very glad to have the opportunity to come to present our views to you this afternoon, so thank you very much for this opportunity. Disaster Action, as you will know, is a group of survivors and bereaved people from a series of major disasters. We came together first in the late 1980s as a result of eight disasters which happened over a period of three years. There were in addition two disasters 20 years ago, in 1985, and the people affected by those events have also joined our organisation. The main point is that all of the disasters have very specific, common features: the survivors and the bereaved and the public asking questions about why something happened, how it was allowed to happen and what should be done about the fact that it had happened. Our main raison d'être is to help create a climate of safety in which disasters are simply less likely to occur and to encourage a corporate culture that understands the importance and the sanctity of human life. I would like to read something from our original document, just a couple of lines long, which will encapsulate these views. "Disaster Action wants to encourage responsible corporate behaviour but where organisations fail in their duty of care and are grossly negligent or indifferent to safety they should be subject to a workable process of law which imposes appropriate penalties on guilty parties." Thank you. Q2 Chairman: Thank you very much indeed. Anne Jones? Ms Jones: I would reiterate Pamela's thanks to you for allowing me to come to put forward our views. The Simon Jones Memorial Campaign was set up initially by Simon's friends. Simon was my son. He was a 24 year old university student taking a year out, and to finance himself before he went back to take finals he had signed on at an employment agency to get work. One morning, without prior knowledge of where he was being sent, he was put in a taxi and sent to Shoreham Docks. Within two hours of his arrival there he was dead. The Campaign was set up initially to get justice for Simon. As Pamela has said, people were saying, "How could this happen? Didn't these people have a duty of care to him? Shouldn't they have ensured adequate communication? Shouldn't there have been enough workers, shouldn't there have been enough trained workers? Where was the supervisor? Why should anyone be so indifferent to human life?" Simon was killed in 1998. To this day, I have never had so much as two lines from the company that killed him. So, first to get justice for Simon, but as we delved into the problems we wanted to raise awareness of the law's failure to protect workers in general and agency workers in particular from death or serious injury. We wanted to campaign against poorly-paid, untrained workers being used to replace properly-trained, experienced workers. Most importantly, we wanted to persuade the Government to honour its pledges to improve the law by making companies more accountable for their actions and omissions and, in particular, their promise, in Revitalising Health and Safety in 2000, to hold the decision-makers of employing organisations to account. Q3 Chairman: Thank you very much indeed. Both of you have spoken both about particular people responsible for particular incidents but about the need also to change corporate culture. Can I ask you to say what role exactly you think being able to get successful criminal prosecutions would play in doing that? This Bill is all about being able to prosecute people and it is important for us to understand how the ability to prosecute fits into that broader agenda, in addition to meeting your understandable feelings about your loved ones. Anne Jones, would you like to answer first? Ms Jones: The first thing we feel is that a successful prosecution brings into the public domain all the failings that led to a preventable death and, very importantly, it shows that this country values all human life and is prepared to punish those who are negligent or indifferent to the lives of workers. It would make people with the real power in an organisation accept responsibility for what they have done. Most importantly, it allows lessons to be learned from mistakes and acts as a spur to other employers to rectify similar problems. Also, it gives the only consolation available to the bereaved family, that their son, daughter, husband or wife has not died in vain but that by their loss the annual carnage involved in work-related incidents in Britain will cease. Q4 Chairman: Pamela Dix, is there anything you would like to add to that? Ms Dix: One thing I would like to say is that there will be instances when both Sophie and I would like to answer a particular question, so we will not be interjecting in order to add for the sake of it but to add something of substance. We sit here in representation of many people and I think the point I would like to make, before handing over to Sophie, in terms of a successful prosecution, is to go back to the words of one of our founder members whose son died on the rather extraordinarily named Herald of Free Enterprise. Peter Spooner said in 1990, which, I would like you all really to bear in mind, is 15 years ago: "Corporate responsibility is not a question of conforming with the minimum standards imposed by increasingly hesitant legislators, it is also a question of sharing moral leadership and of developing truly responsible codes of corporate conduct." That man is now too old to be here and say this for himself to you but, in terms of specifically trying to get a prosecution, he was one of those who were trying. Perhaps I could hand over to Sophie, just to finish our answer to this question. Q5 Chairman: Perhaps, in doing that, I could ask you to move on to cover what was going to be my next question, which is, without going through every individual case, can you distil, if you like, the essence of your experience in trying to get successful prosecutions? Ms Tarassenko: My own experience comes from the King's Cross fire, in which my brother was killed. In that instance we did not get to stage one, because although we had advice that we may have a case for a private prosecution it is prohibited, basically, to do that, so there were no criminal proceedings, there were no health and safety breaches that were prosecuted either, there was no civil liability admitted and there was an inquest verdict of accidental death. Actually there was no recognition at law by any body of what came out in the Fennell Report, which was a fairly negligent culture which existed in the Underground at the time; that was the difficulty for us. Since then, of course, our members were in the Herald of Free Enterprise, which failed after a few days, and at Southall we also have members basically who did not get ahead on day one. It is very frustrating, to say the least. There does not seem to be a forum whereby accountability is recognised. The importance of a deterrent I would emphasise again. I know that lots of corporations will say, "Well, having an offence is never going to make a corporation behave better, that's not the way corporations work." That may be true but I always like to think of comparing it with the legislation which came in on the wearing of seat-belts. You will get a body of people that wear seat-belts anyway, you will get a body of people that will never wear seat-belts, whether there is a law against it or not, and there is a substantial body of people who will start wearing seat-belts because the law has been passed. I think corporations do not behave entirely differently from that. Chairman: Thank you very much. Q6 Gwyn Prosser: Mrs Jones, as you know, in the current state of the draft Bill, no criminal sanctions can be taken against individuals, even if those individuals are senior directors in a company which is proved to be grossly negligent. That being the case, do you think this Bill is worth having? Ms Jones: Unfortunately, that being the case, I do not think that really it will be any easier to prosecute this Bill than the old Bill of Corporate Manslaughter, because we have this big problem about the definition of a senior manager and woven into the offence that the organiser of the breach has got to have involved a senior manager. The definition of a senior manager is so narrow that to try to show that he was involved is going to be no easier than the old 'controlling mind' legislation. The other thing is that, even if you can identify a senior manager, because there are no statutory duties placed on him to ensure that his organisation is complying with health and safety legislation and the management of Health and Safety at Work regulations, we are back with the situation that we ended up with in court, with Martell's defence arguing successfully that, even though he had designed the hazardous system of work and, on his own evidence, insisted that it was used unless he said they could do otherwise, he was not there that morning. He was not supervising and therefore he could not possibly be expected to know exactly how it was being used and that he had no duty to know. Q7 Gwyn Prosser: You are identifying what you consider to be a very clear flaw in the Draft Bill but, that being the case, is it a Bill worth having? Ms Jones: Not without considerable amendment. That is the main thing. There are good things about it, for instance, including at least some Crown bodies, and so on, but it seriously needs amending to make it effective and operational. Q8 Gwyn Prosser: May I ask Pamela Dix the same question. In your submission you did not actually go into these issues of holding individuals culpable. What is your view? Ms Dix: I will hand over to Sophie to answer that. Ms Tarassenko: Our view is that, of course, at the highest level, for the reasons pointed out, directors must be held to be accountable, but I think it is a different issue, because here, in this Bill, and Anne is right, basically we are going back to what the law is. All in all, there is not a vast amount of difference between a current 'directing mind' issue and the way this Bill is worded, so it is barely different at all, which is why we did not address this issue particularly. What we looked at in the Bill was and what we would like to argue is that you cannot have this liability requirement on senior managers. We have argued that the law needs to look at - and that is where I use the Australian Code as an example - the existence of a corporate culture, because in almost every single public inquiry report the words "culture of safety" or "the existence of a culture" were found to have been at least one of the causes of the deaths, if not the cause of the deaths, certainly as a background. The cause of death normally will be the act of a very junior employee, someone who did not shut the door, or whatever it was, and behind that lies corporate culture. If you have just 'senior manager' and if you have to find a link between just a senior manager and a death it is never going to be found. Therefore, this whole idea for us is completely unworkable. Q9 Gwyn Prosser: You mentioned the Australian model. Some people argue that defining the culture of a company, or the corporate body, is far too vague and that it will be difficult for juries to get a grip of, especially if their understanding of the company corporate is lacking. What is your comment on that? Ms Tarassenko: The Australian Code actually provides a definition of what they mean by 'corporate culture'. It is an attitude, a policy, a set of rules, a course of conduct or practice existing within the body corporate generally. However, the Australian legislation also provides a defence of a kind of counter-defence of 'due diligence' in terms of showing that their attitudes, policies and rules were not sloppy or negligent, so there is that balance. I think the jury, in being asked to prosecute an offence under the Bill with the way it is worded presently, would have immense difficulty in linking any senior manager with the cause of death; it is going to be impossible, in my view, for almost any jury, given any reasonable defence lawyer. Q10 Mr Clappison: You have made certain observations about what you see as being the difficulty of proving that a senior manager is responsible for what has taken place. Perhaps I could start with Anne Jones on this. Putting that to one side, assuming that the case has been made out and there has been a finding of guilt against the company concerned, do you believe that there should be individual liability for directors of those companies, that they should face individual punishment? Ms Jones: I think that this is going to be almost essential, because many companies, to avoid the suggested fine, will go into liquidation. It is very, very, difficult, therefore, to have a sanction against the company or anyone involved in it if it goes into liquidation. However, if you do insist, as in the consultation document that was put out in 2000, that there should be an associative crime of contributing to, conniving at or assisting in corporate manslaughter, aimed at senior management or directors, then you would have some way of still putting the sanction on the decision-makers in the company. This is the real problem. I can see the point entirely in targeting the entire company because everybody within that company is benefiting, effectively, from the shortcuts that were taken that caused the tragedy, but it is not the company that makes the decision. It is not the organisation that makes the decision and unless you target decision-makers in some way then they are not going to change their behaviour. A company cannot change its behaviour, the decision-makers can change the way a company behaves. Therefore, unless you have got some way of targeting those decision-makers I do not think it is going to work. Having said that, assuming that we had got a sort of wonderful world where this would work then we do have to look at how you sanction the company. As I say, non-payment of fine is a very common problem. This happened in the Ramsgate walkway collapse. I do not think the fine was ever paid and you do have to have some method of targeting individuals. Even if you say, "Right, we're not going to imprison this director for this but clearly he isn't worthy of having such a senior post in a company, any company, and he should be disqualified from holding any post for a minimum of ten years," there is a precedent in company law for unlawful trading within this sort of thing, then you would have some sort of hope because the company might have to reorganise itself totally if enough of its board of directors have been disqualified from acting. The only other way I can see round it, with this at it stands, is if you accept that to take shortcuts that cause loss of life is criminal negligence and therefore that any company which effectively is gaining assets by criminal activity can have its assets frozen during an investigation and a prosecution. You say, "Right, this is a criminal investigation. We believe you have been benefiting from criminal activity." That is about the only way I can see it. Chairman: Mrs Jones, we are going to pick up that point at a later stage in the inquiry. Q11 Mr Clappison: Thank you for that. To Disaster Action, have you got anything to add to that; either Pam or Sophie? Ms Tarassenko: We recognise that this is probably one of the biggest sticking points, because certainly the Institute of Directors and those responders have professed the most hostility towards this, so we recognise this as a major issue in this Bill. There are other ways of getting directors to behave better. We think it should be in there but if it were not to be in there, if we are talking only corporate responsibility as opposed to individual directors' responsibility, we think there should be parallel legislation imposing safety duties on directors, in the same way that they have financial duties under the Companies Act imposed on them, that there should be actual legal obligations. We think this would improve matters considerably. We would have liked to have the offence of aiding and abetting a company to commit manslaughter, but if that is going to be a sticking point and it is never going to be accepted we would have the Corporate Manslaughter Bill with accompanying legislation for directors but within another forum, if you like. Q12 Mr Clappison: Could I ask you about one other issue, with regard to establishing liability in the first place, and that is the somewhat technical issue of causation. You are probably aware that the Law Commission's 1996 proposals suggested the legislation should contain a special provision on causation which would clarify that "the management failure may be a cause of the death even if the immediate cause is the act or omission of an individual." The Home Office, in its proposals, has left that out. I think you believe the Home Office is wrong to do that. Could you say why you think it is wrong? Ms Tarassenko: My understanding is that the Home Office may have left it out because of a couple of cases that have intervened, the Empress Car case and the Finlay case, that have sort of clarified this area. I have two things to say about that. First of all, the Empress Car is a specific pollution case and it is notorious that the law has said, "Oh, well," like in the Meridian case, "we will accept this and that in terms of this type of offence but not manslaughter." It may always be argued that the Empress Car way of thinking is not applicable to manslaughter, it was applied in Finlay but Finlay was individual manslaughter, not corporate manslaughter. I can see ways in which a defence would easily find holes through that particular reason for leaving it out. Secondly, a new piece of legislation is an ideal opportunity to clarify what is an incredibly difficult area of law, which of course has been wrestling with causation for years and why not take that opportunity to make it absolutely clear. Q13 Mr Clappison: You believe that there would be clarity and that it would be preferable to have it dealt with by statute rather than through arguments over previous case law? Ms Tarassenko: Absolutely. Q14 Mr Rooney: Can I address this to Anne. In your opinion, does the draft Bill clarify enough the different types of relationships in employment and if not what would you suggest should be there, where an employment agency did something like this? Ms Jones: I think this is one of its really big problems. It is not just agency workers. Everyone knows that on a big construction site, like Wembley, for instance, there are enormous numbers of contractors and sub-contractors and sub-contractors that are taking on agency workers and even agencies that have borrowed workers from other agencies. There was one case, I think it was two years ago, of an Eastern European who had been killed on a construction site and there were enormous problems with identifying who was employing him, because each layer was passing the buck, saying, "He's not our employee." There is a big, big problem with agencies, even though they are executing a PAYE system, dictating where the person works and when a person works, what their rate of pay is, what their hours of work are, then turning round and trying to say, "But they're self-employed." Unless we can tighten that up, in the first place, this has got a real problem on its hands. If only we could insist on saying to an agency, which effectively is a sub-contractor supplying labour, "Right, you are the principal employer, health and safety law says that you are responsible," and this is quite correct, the agency is actually responsible for that person's health and safety at work and for their training but the host employer is responsible for the safe systems of work. As agencies just about never visit the host employer to assess whether a safe system of work is operating there, it seems odd that it is very rare for an agency to be targeted with the corporate manslaughter law, because, in my view, they are as guilty if they have failed in their duty to establish that the company they sent the person to was operating a safe system of work. It is not only my son, in this case, I have had so many other people contact me. A more recent case, showing the terrible involvement, was another university student, Michael Mungovan. He was sent by MacGinley's recruitment agency to work doing rail maintenance for Balfour Beatty, who had been sub-contracted by Railtrack, to do a particular job. MacGinley's, just like Personnel Selection, had no idea what job he was going to be doing, they simply sent him there. He had never done that particular type of work before. Within two hours of being there he was dead, he had been hit by a train. The inquest returned a verdict of unlawful killing. It was horrendous, the errors of communication and everything else that had taken place, but the CPS did not prosecute, and I could quite understand their point. Although you could see the company was definitely guilty of that young man's death, it was very difficult to follow the paper trail to see exactly who should shoulder the total responsibility. It is happening on construction sites and in docks all over the country, and until we tighten up this, placing a responsibility plainly on the people sending out the workers, then all that will happen is that the host employer will argue, "This isn't my duty of care, this isn't my responsibility," and they will walk free. Q15 Mr Rooney: Thank you for that. Why do you think it is important that the bereaved are given the right to bring private prosecutions without prior approval of DPP? Ms Jones: As far as I understand it, the reasoning for requiring the approval of the DPP is to prevent spurious prosecutions. I think the idea of that happening is remote. First, the financial hurdles are absolutely enormous. You have not only to find the money to bring your private prosecution but you have also got to fund it sufficiently should you lose the case and have to pay the other side's costs, so that is an enormous financial hurdle. Second, if you do manage to bring the private prosecution it will have a preliminary hearing at a magistrates' court and the magistrate can examine the case, decide whether you have a valid case to continue or throw it out at that stage. If it goes on to the Crown Court, the judge at the pre-trial hearing can also look at it and decide whether or not you have a valid case and throw it out, so I think the chances of a spurious prosecution are very, very low indeed. However, it is often the case that the DPP have not necessarily got all the information. In our own case, I was raising points right up to two months before the trial, people who had not even been interviewed, and I was saying, "Look, he was supposed to be doing that, where was he, why wasn't he doing it?" "Oh, who's that?" they would say. It is often that the bereaved family, because they have spoken to so many people and because they are very, very focused, have actually got more information than the DPP and they may have a very valid case for bringing a private prosecution. As I said, I cannot see any bereaved family doing this on a spurious case, they would have to be a very, very, very wealthy bereaved family, and the idea of, say, Richard Branson's son being in the position of my son is laughable, it would not happen. Ms Tarassenko: I very much go along with that, in all its points. Sometimes relatives have actually got the staying power that the DPP does not have, so they may actually get there, but certainly we were quoted about a quarter of a million to get to the first magistrates hearing, so nobody has the money. It is never going to happen. It is a sacrosanct right which has existed for hundreds of years, there is no reason to get rid of it at all. Q16 Harry Cohen: The draft Bill proposes sanctions of unlimited fines and/or a remedial order for those found guilty of corporate manslaughter. I understand that you are not satisfied that is sufficient. Leaving aside the individual directors, what more would you argue for as being amongst the sanctions that should be there? Ms Dix: If I can deal briefly with the issue of fines in themselves, we think basically, on a philosophical basis, that they are meaningless. There is no connection between the number of people killed, the kind of event, the kind of incident and the nature of a fine imposed. There is no way in which it has ever been done on a basis that we can all sit here and agree had some logical sense, so that situation is likely to continue into the future should this Bill be enacted. I would also say that when a fine is exacted there are these questions about what happens to the money. The money goes into the Treasury, it is not ring-fenced in any way in relation to the use to which it might be put, the money just disappears into a big pot. What is the point, except for a headline in a newspaper that might suggest that fining a company over £13 million is meaningful; we would argue that it is not particularly meaningful either as punishment or as deterrence. You might be interested in the situation which pertains in the United States whereby the product of corporate fines often goes into a pot for the office for victims of crime, whereby the money is put to some use in relation to activities for the victims of crime, including corporate crime. That is not proposed here. I know that Sophie has something she would like to add to that. Ms Tarassenko: Going along the same lines, there could be criminal compensation which could be a form of punitive compensation, which would make more philosophical sense in terms of the bereaved families, certainly as a bereaved person, in terms of doing the maths. A death is very cheap if the person is over 18 and has no dependants and that is a glaring flaw in any system for us. In the past, Disaster Action has also proposed corporate probation to avoid slippage because companies tend to do things right for a year or two and then start slipping back and a long probation order would prevent slippage. Finally, equity fines may also be valuable. I think probably what corporations fear most is the diminution of their equity value, so that could be a very strong disincentive as well as what I have mentioned previously, disqualification of directors who may have been involved in the criminal context. Q17 Chairman: For my benefit, can you explain how an equity fine will work? Ms Tarassenko: My understanding of an equity fine, and I think CCA might have a detailed explanation later on, is that I think some equity fines work in that the Government actually takes a holding of the company and reduces the company's holding, or there is a reduction in value of the shares, which of course would bring about a shareholder revolt, which is the other thing that companies fear most of all. That would be a strong disincentive. I do not know exactly how equity fines work, to be honest. Ms Jones: Could I contribute on fines. At present, we have the ability to impose an unlimited fine for health and safety offences. We are not distinguishing between a health and safety offence and a corporate manslaughter offence, in that case. I think one of the reasons why fines do not have a deterrent is because they are not big enough and the only way you can do it is to make fines so large that it would bring about corporate death. The reason it does not have a deterrent is based in company law, about the only duty placed on directors being that they act in the best interests of the company, and that has been interpreted by the courts to imply that they must act to maximise profit. Effectively, if they reduce profit to increase safety they are actually disobeying company law. The only way then you could make a fine on corporate manslaughter tie in with it is to make it so big that the company would fall if it had to pay this fine for corporate manslaughter, in which case then to act in the best interest of the company they would have to put safety in place. We are talking of fines that would have to be more than ten per cent of annual turnover to have any effect on them. On its own, I do not think that will work. Remedial orders sound great but the Health and Safety Executive can already do that. I was very worried about the draft Bill saying that people could apply for an extension on it and then it says and they could apply for a second extension, and there does not seem to be any limit placed on how many extensions a company can ask for, for how long it is going to take them to put in this remedial work. I cannot see why, if the judge says, "You have got to put everything right that causes death, you've got to increase staffing, improve training, improve communications, get the right machinery in place," and so on, "and you have got three months to do it," if the company fails to do that then the directors are not in court on a 'contempt of court' charge, for which there is a custodial sentence. That might focus their minds on correcting the errors and omissions which caused the death in the first place. Q18 Harry Cohen: I want to ask this of Anne Jones, because I understand that your organisation have mooted the possibility of freezing company assets in certain circumstances. I am not sure what those circumstances are. Is it justified to freeze a company's assets and put it out of business and all the other workers in that company, to put their jobs in jeopardy? Ms Jones: They are not necessarily out of business if their assets are frozen, if you put in, for instance, a receiver to act for them during the investigation and judicial process. You would only do it, let us be honest, if you were pretty certain that they had negligently or recklessly caused a death. Obviously, one of the big problems in this area has always been the lack of police numbers and police training to investigate this. I understand, from reading, I think it was, the Police Federation's response that one of their big problems is knowing where to look. I have been to the National Police Training Centre and asked about training for investigating work-related deaths. They have no course for it. I contacted the Home Office and said "Can we have a course set up for the police so that they know how to investigate work-related deaths?" I was told the training providers think that the training they provide is adequate. I do not know who audited the work but it is not showing up by an improved prosecution rate, or anything like it. Q19 Harry Cohen: Can I come back to this point about freezing of a company's assets directly, because I can see the argument of the fear that a company goes into liquidation and I think that is the way they avoid fines or penalties. Are you arguing that they should not be allowed to go into liquidation, that their assets should be frozen ahead of it? Is that the point you are making? Ms Jones: Yes. This happens, for instance, in, say, serious fraud cases, they can freeze their assets. Why cannot you do it if it is killing somebody, if you can do it in other cases? If they have been seen to be profiting from criminal activity their assets can be frozen, so if it can happen in other cases is not this a crime? Are we getting away from the idea that this is a crime? This is criminal activity. Should not the same things apply if you are killing people as if you are taking their money? Q20 Harry Cohen: A minister made a recent speech on this area and said that really we should focus on the consensus, what we can agree on in this Bill, and not re‑open disagreements. Would you go along with that way of thinking, or do you think that leaves it just too weak? What is your feeling about that? Ms Dix: Can I say that consensus is likely to create the lowest common denominator. What would be the point? Q21 Harry Cohen: If these other issues are still raised then the danger is that the Bill could be delayed? Ms Dix: We have thought long and hard about this issue and actually there is no easy answer, because we have spent many years, as we have already rehearsed today, trying to get to a point at which there is a workable Bill. I would emphasise our words from 1990, that is "a workable process of law." We were talking about this just before we came in through the door and we do not have a categorical answer. We are tempted to say that this would be worse than no Bill, particularly if there are no substantial amendments made to it. Harry Cohen: That is interesting. Chairman: Thank you very much indeed. It is a very difficult question and thank you for answering it as you have done. That was all too brief, I am afraid, but we need to move on to our next witnesses. Can we thank the three of you for your answers and your helpfulness. Thank you very much indeed. Memoranda submitted by Amicus, TUC and Transport & General Workers' Union Examination of Witnesses
Witnesses: Mr Mike Griffiths, National Political Officer, Amicus; Mr Hugh Robertson, Senior Policy Officer, TUC; and Mr Barry Camfield, Assistant General Secretary, Transport & General Workers' Union; examined. Q22 Chairman: Good afternoon and welcome. Thank you very much indeed for coming. The Committee knows which organisations you are from. Can I open up really with where the questioning of the representatives of victims left off. It would be unfair to overstate what we were just told, but perhaps the suggestion was, from Disaster Action, that if the Bill went through in its current form, unamended, it might not be worth having at this time. Can I ask each of you, if the Bill were to go through in the form that it is in now, without some of the amendments you might like to see, is it worth enacting? Mr Robertson: We feel that if the Bill were to go through in its present form what it would do would be to help remove the loophole, since the P&O case, Zeebrugge, about the 'directing mind'. That would be a positive thing. However, really it would be just clarifying and tightening up the law. Also, to a certain extent, in some cases, it would help give a sense of justice to the relatives of victims, who have lost a relative as a result of a fatality, where the alternative is a health and safety fine, basically. However, there are major limitations, which I think all three organisations here have put in their submissions, around, in particular, the fact that it is not companies that make decisions, it is individuals that make decisions, and the only penalty for a company is an unlimited fine, which effectively is exactly the same as the Health and Safety at Work Act. With these caveats, we are certainly not saying the Bill is worthless; it is something that the trade union movement has been calling for for the last ten years. What we believe is that it could be far more effective. Q23 Chairman: Thank you very much. Mr Griffiths and Mr Camfield, broadly do you share that assessment? Mr Camfield: We think the fact that we clarify some of the issues around the Crown bodies, and there would be a slight easing of the burden of the single director mind, the idea that there may be five additional prosecutions, has got to be worth it itself but we think would be a massively missed opportunity, because the reality is probably that is all we would get, in terms of this part of the legislative process, for a foreseeable term. We think that would be a tragedy and really a missed opportunity. Mr Griffiths: It is broadly in line with my colleagues. It would be a tragedy if this Bill did not eventually become realised as an Act of Parliament, but in its current form I have to give great emphasis to what I see and my organisation sees are major deficiencies, which we would hope, with the assistance of this Committee, would be corrected before it appeared in its final form. Q24 Chairman: Mr Robertson, can I ask you about the overall position. Does the TUC have an estimate of how many preventable worker deaths occur each year and, whatever assessment you are able to make, how many of those ought to lead to prosecutions for corporate manslaughter? Mr Robertson: The deaths that this would relate to would be almost exclusively the accidents, if you like, the immediate deaths, as opposed to the 10,000, 15,000 other work-related deaths. Of those, among workers, there are about 220 a year, 250, total. The Health and Safety Executive recognises that at least 70 per cent of these are the result of management failures. Management failures are responsible for somewhere between 150 to 200 of these deaths every year. However, we think it is highly unlikely that in all of these cases a conviction for corporate manslaughter would be attempted or would be successful. As you will know, the Regulatory Impact Assessment seems to put the figure at roughly five a year. Q25 Mr Dunne: Following on, Mr Robertson, from what you have said, both in that context, it is very clearly a relatively modest number of incidents where this legislation would apply, and what you were saying about the Health and Safety at Work regulations, do you think that, the culture which has been introduced as a result of Health and Safety at Work, with corporate governance coming in at a much increased level, this Bill would impose greater burdens on business to reduce risk-taking and are those burdens worth it? Mr Robertson: Certainly we do not see corporate responsibility as being a burden. We think it is to the benefit of the organisation itself at all levels, from boardroom down, to be socially and corporately responsible. Hopefully, this Bill will increase the level of responsibility. Certainly I do not see it in any way as being something that good employers should have any fear of whatsoever. Primarily, this Bill will be aimed at larger employers. At the moment it is relatively easy to prosecute a small company. It will be in primarily the large organisations and the public sector where I think we should be doing a lot more to encourage corporate governance and responsibility on occupational health and safety issues. There is the issue which is intertwined with this, which is of the duties of directors and directors' duties, which is something which we think cannot really be seen in isolation from the issue of corporate manslaughter, and they are just two sides of the same coin. I think to see this as a burden really misunderstands the way that a responsible business will see this. Q26 Mr Dunne: Could I ask your colleagues whether the scope of this Bill should be increased to cover serious injury, not just fatality? Mr Camfield: I think it should. We are talking about 150,000 plus injuries a year that are recorded, over 150,000 in the recent period, and part of our concern about this is that it is about the health and safety culture. If we address this seriously, so that companies know that the obligation is a very serious one, it is on them at the highest level through the business, it is not just about preventing the most tragic and publicly notable deaths but the scale of injury that goes on day in and day out. We are recording cases and representing members on a very regular basis. It picks up the issue that we are all so concerned about, which is those occasions of the 200 odd deaths which occur. Underneath that there is that tragedy of human misery which we think has to be addressed more seriously, and that companies need to be liable not just for compensation to individuals but ought to be prosecutable under legislation. Q27 Mr Dunne: Would it be a similar proportion that would be susceptible to negligence? You referred to 200 deaths out of 20,000, I think was roughly the proportion that would apply. Do you have any figures as to how serious accidents would fit in things? Mr Griffiths: I certainly do not have those precise figures, if we were to broaden it to serious accidents, and whether the TUC would have that information or would be able to research it for the Committee if they felt it was important. I start from the premise that the vast majority of deaths and, by similar definition, serious injuries are preventable. They are preventable if only the proper duty of care was exercised by the company. It seems to me wholly appropriate that the Bill's scope should be increased to cover serious injuries, not just because, in many cases, we can all appreciate the dramatic effect it can have on dependants and their families, the type of life-changing experiences there very well may be as a result of a major and serious injury, but simply because of the first point I made, that if there were a better deterrent then many of these injuries would be avoidable. The actual penalty in different cases is likely to be different but, nevertheless, the scope of the Bill should be extended to cover that. Q28 Justine Greening: In many respects, we have already covered the next question I had to pose to you. Mr Robertson, obviously, the courts can impose large fines on companies when they are found to be guilty. In the case of Network Rail and Balfour Beatty, Balfour Beatty, for instance, was fined £10 million, so the courts do seem to show a greater willingness to impose very high fines envisaged under health and safety legislation. Do you think this means that a separate offence of corporate manslaughter therefore is less needed perhaps than it was before these sorts of fines have been imposed by the courts? Mr Robertson: No. I think the fines do recognise society's concerns over health and safety, but also perhaps, to some extent, the frustration of the existing failures of the law, the fact that we cannot at the moment, or find it very difficult to, prosecute for corporate killing. Fines are low and are not going to change the culture within boardrooms. We do have to look at more innovative penalties, and there is a problem with not only corporate killing but generally. Our submission and the submissions of the other unions have looked at some of the possibilities of how we can look at other penalties, such as corporate probation, so that a company is assisted with their health and safety culture for a period, as well as a fine. That is one example that has been given; there are a number of others as well. It is also the fact that we have to look at the individual directors of an organisation as well, either within this Bill or certainly parallel to this Bill. Certainly at the same time we have to look at the issue of directors as well to make sure that they change their behaviour rather than just seeing it as something for a company which may or may not get fined, which will be picked up by either the shareholders, in the case of a corporate body, or in the case of a Crown body it will be just recycling money, to be quite honest. I think it is because of the Crown issue that we have to look very closely at the issue of penalties. A fine only being available for corporate killing offences by a Crown body just does not make sense. Q29 Justine Greening: Thank you. Mr Griffiths and Mr Camfield, do you have anything that you would like to add to that? Mr Griffiths: There is just one thing I would like to say about that particular instance, because obviously we have looked at it since we submitted evidence, and I am sure a number of the committee will be only too well aware of Mr Justice McKay's remarks. He said, in summing up, that this was one of the worst examples of sustained industrial negligence that he had come across. There was a large fine and that has been welcomed by a great many. I suspect it was the public interest that brought about such a fine. You also have to make some comparison of the size of the fine with that particular company's turnover. It is not quite so large when you put it into that sort of proportion. I think the central point though is that here is the Justice, in this particular case, describing it as one of the worst examples of sustained industrial negligence, yet no individual is liable. Mr Camfield: The campaign that we have been involved in started 40 years ago when a construction worker fell to his death in the River Wye when the bridge he was working on collapsed. The case caused so much outrage at the time that a corporate manslaughter case was taken but failed to be proved because of the narrowness of the particular point in law. Since then, 32,000 workers have died over that period. Coming back to the Balfour Beatty case, it seems clear to us that these things will hit the public at the level of what might be called a disaster, in other words, it affects the public. The individual disaster that is not seen, a worker tragically may be killed in appalling circumstances, will not attract that kind of publicity. Maybe the pressure then associated with it will be less, so I agree very much with this point about a broad range of options and our central point about directors' duties is one that we would press very strongly. Q30 Justine Greening: Just to be clear, going back to my original question around fines, do you think that fines in the workplace, rather than in a very public disaster, like the one associated with Balfour Beatty, are less likely to be quite so severe, for the reasons you have explained? Mr Camfield: The evidence is, the average fines are £18,000, £20,000, of that order. We are not arguing that the fines should not be part of the armoury of the judiciary in dealing with these issues, but just on their own we do not think that, in terms of the culture of health and safety across Britain, it is really going to make the difference. Q31 Justine Greening: Thank you. Moving on then, in terms of which organisations are covered by this Bill, obviously the Bill itself has a definition of organisations which actually does not cover partnerships, sole traders and other unincorporated bodies. To your mind, how many people do you think therefore are not covered by the legislation as it stands, in terms of the definitions of organisations at the moment? Mr Robertson: Part of the problem with this is, I think, when the people were drafting the consultation they themselves did not know, and I think it is because it is very difficult to find out, the vast majority of the organisations which will not be covered. You are quite right, in terms of unincorporated bodies and partnerships they are ones which are very small and where therefore there is not really a problem. They were the main organisations we were talking about, in terms of the large employers and the very, very big partnerships, large accounting and law companies, which may or may not be covered, depending on the final definition. We would like to see as broad a definition as possible but we do recognise the difficulties in drafting legislation that covers every single opportunity. I would not like to place a guess on it, to be quite honest, but what I would say is I would hope that, rather than making sure that every single individual, two-person, one-person, organisation is covered, the focus is to ensure that all large employers, which are the ones where the problem is, are covered, broadly, I think, where we recognise the problem is primarily large, unincorporated bodies. Q32 Justine Greening: To your mind, the smaller, very small, partnerships would be covered by individual manslaughter cases, for example? Mr Robertson: They are the ones where there has been no real difficulty in getting convictions in the past few years. They have all been small ones. Mr Griffiths: I think it is a complicated area, I accept that, in terms of the Committee's thinking; in fact, we have said that in our own submission. If I can take some licence with the question and just broaden my answer, specifically we would want an assurance that offshore oil rigs and offshore British interests would be covered by the scope of the Bill. We have seen the Government recently covering a loophole there in their area and we certainly would not want to have to ask retrospectively for that to be applied in the case of this particular Act. Of course, we also have a view that where UK companies are the controlling mind of a UK worker, even if they are working abroad, they should also be covered in the scope of this Act. Chairman: We will pick that up for attention in a few moments' time, Mr Griffiths. Thank you. Q33 Mrs Engel: I understand that all of the unions want to have an additional offence of unlawful killing which is aimed specifically at company directors and senior managers. You will be aware that under current manslaughter legislation a lot of this is covered already. There is a specific offence, if somebody acts grossly negligently and through that behaviour causes death, that is covered already. How will an additional offence under this new legislation actually make any real difference? Mr Robertson: We have been asking for a specific duty for directors. The problem is that the current duty under the Health and Safety at Work Act is one which, if they take it on, if they breach it they can be prosecuted, is not actually a positive duty on directors. I think that is what we have been asking for, so that it changes the focus round to a specific responsibility for directors under the Health and Safety at Work Act or the Companies Act. There was a private Member's bill put in by Mr Hepburn, I think, at the beginning of this year which would have achieved that, and that is what the TUC submission concentrates on. We recognise that there are already-existing penalties for individuals under manslaughter legislation and under the Health and Safety at Work Act, and this is primarily, obviously, about manslaughter cases and is about corporate bodies. However, you cannot separate the corporate body from the individuals who make the decisions, and that is, I think, what we are trying to get at. The problem with this Bill is perhaps it does and until you match the two up the effectiveness will be less effective. Mr Camfield: We think, in the T&G, that we will not make a significant impact on health and safety in this country, and that includes corporate killing and workplace accidents generally, until there is a specific and general duty on company directors at the most senior level of companies, because it will put it on their radar. I know directly that, yes, there are some boards of companies where health and safety would feature, but I think most of the research we have available shows something like two-thirds would never discuss it. They are looking at other questions involving the company's financial future, its expansion activities, dealing with crises, and so on, not the health and safety that is in place. It would put it on their radar and we think what would follow would be a reduction in accidents, in deaths at work and a reduction in the need for prosecutions and the legal process that would come with that. I have seen there is a straightforward way, that we have got an army of safety reps in workplaces, battling for improved safety conditions, working with managers. We have got the Health and Safety Commission, the Health and Safety Executive with their particular responsibility for developing a health and safety culture. We have got the Health and Safety at Work Act and the courts, and so on, but at the board of directors, at that central level, the responsibility is devolved, as it were, to individual acts and not to this notion of a more general mind of the company. We firmly believe that until and unless that is addressed, and we have no desire to see attacks on directors, and so on, but once we have got people focusing on this issue then the culture of a company we think will change pretty rapidly, in terms of the way this is addressed. We see this, again, as part of the armoury, not the sole response, there will be corporate fines, individual liability and the other things going on, but for the first time British companies will be at the centre of the strategic tackling of health and safety. Q34 Mrs Engel: If I can ask Amicus, I understand that your memorandum proposes this additional offence. The way that is worded in your memorandum specifically, how might that relate to secondary offences of aiding, abetting, counselling or procuring an offence of corporate manslaughter? Mr Griffiths: I think the quick answer would be, I do not know. I dare say, the courts, if you were to include it as we have suggested, may themselves have some difficulties there. We are absolutely clear on exactly what we mean by the additional offence and there is an agreement between all three parties here, but in Amicus' case there is a slight difference of emphasis. We believe that, as well as the corporate responsibility that senior directors will have, there is a responsibility on an individual who is seen to be grossly in breach and responsible for the breach of that corporate responsibility. We believe that can only be addressed by an additional offence, as we have said, of unlawful killing, where we could see the individual being prosecuted for exactly that offence as a result of the breach of the corporate responsibility. On the aiding and abetting one, I will come back to my original answer and pass, if you do not mind. Q35 Mrs Engel: Going back to the Chair's original question to you really, it is the fact that a lot of the stuff which is being proposed in this legislation could be dealt with in other pieces of legislation. How will having this piece of legislation improve things, and might not our dealing with it through other ways and means actually speed it up and, from your perspective, that should be a bit more helpful? Mr Griffiths: From Amicus' point of view, we are strongly recommending that it be dealt with in this legislation. We are concerned about the delay. We are conscious that there are parallel examinations of directors' duties and if there were some sort of an assurance that the concerns, particularly around the requirement for imprisonment for corporate manslaughter, would be covered there then we might be satisfied. What we are concerned about is that we do not think that will get picked up in quite the same way and that is a specific Amicus view. Q36 Chairman: Can I pursue that one. We are due to report in December, as a Committee, the Health and Safety Commission's review of directors' responsibilities is due to report in December, so maybe after the report, we do not know. If the Health and Safety Commission review came out in favour of directors' responsibilities, in the way that you have advocated, or in Mr Hepburn's Bill earlier this year, then would you be saying to us, "Well, actually, we're not so bothered about whether we've got individual liability in the Corporate Manslaughter Bill"? Mr Robertson: We would hope that the two things would be married up, not necessarily through the same legislation, as opposed to specifically. We recognise this is a Bill about corporate manslaughter and I think that is a very important distinction. However, to make it effective we need the two. What we would say, from TUC, and we say in our submission, is that we believe we need directors' duties in parallel to this, either as part of this Bill or at roughly the same time. You are quite right, a decision may be made by the Health and Safety Commission in December, although, on the other hand, it may not, but then it goes to ministers. The HSE is a tripartite body and whether or not they will be able to get agreement on a matter like this we will have to wait and see. Chairman: Thank you very much indeed. Q37 Colin Burgon: Mr Robertson, the word "culture" has been mentioned by all three of you, and the culture you want to emphasise is the health and safety culture, implementing and instituting it in the workforce. There is another culture which it clashes with and we all operate in a political context and that is the flexible labour market. How do those two cultures sit together, can they be reconciled, or has there got to be a primacy of one or the other? Mr Robertson: I am not sure, in terms of this particular draft Bill, whether or not you are talking about, in particular, contracting, whether you are talking about agency staff, whether you are talking generally about the large number of self-employed. Q38 Colin Burgon: Generally, about agency staff? Mr Robertson: Just people who are not immediately employed. I think the important thing about this is it does not have to be necessarily the employer who is covered, it is the people, the senior manager, controlling the operation. You will find in a lot of organisations, particularly when there is a big chain of contracting, which I think is very important by the Bill to much more than the building industry perhaps, which is a major problem, technically the people who are responsible for most of the policies are not employing the people who are carrying them out. I think we need to be sure that the Bill actually covers that. That is why it is important that it is not just the employer who is covered but it is the organisation which is responsible for making the decisions that have led to that death which is responsible. If we can get it that broad, which I think is the intention, then it will cover the very different labour market we have got now from the one we had 30 years ago. Mr Camfield: It seems to me that the culture of health and safety needs to override issues around flexibility, if you are putting it as bluntly as that, that there are minimum standards that we have set ourselves. The problem with some of the tendencies around globalisation and flexibility are that companies, in the rush to compete, can undermine the health and safety and conditions of their workforce and we are aware of this as a concern. It does seem to me that we are talking here about minimum standards. I would not see that a flexible company and a modern company need fear decent minimum safeguards, in terms of people's lives and their safety and health at work. I would not see these things as being in conflict, although I could see it being posed that way: "If we were to operate globally, wouldn't this undermine our ability to compete?" We do not want, thank you very much, what happened to Chinese workers who died, burned to death, when they were locked in, in a company, and could not escape because of the circumstances they were in. I think a modern, flexible company which adopts a proper culture of health and safety, and particularly if there is a level playing-field and it is put in the boardrooms everywhere, will compete on what is best and not a race to the bottom. Q39 Colin Burgon: The draft Bill proposed to remove Crown immunity for the statutory offence of corporate manslaughter and you are arguing that perhaps the Bill should go further and that Crown immunity should be removed for all health and safety offences. What do you see as the strength of that argument? Do you think that Government ministers, effectively, will be like turkeys waiting for Christmas? Do you agree with that? Mr Robertson: The Government has committed itself already to that. It is simply a question of getting a vehicle to do it. In Revitalising Health and Safety in 2000, it was then the DTLR, I think it was called, who committed themselves to removing Crown immunity for health and safety offences at the earliest opportunity. Q40 Colin Burgon: Without wishing to encourage any splits here, the TUC and T&G take a slightly different line on this senior management test from that of Amicus. Is that a fair view? How do you respond to Amicus' view that the focus of the Bill would be undermined if the offence were extended to cover the activities of those below the position of senior manager? Mr Robertson: I do not think there is any disagreement, in terms of the application of the Bill, in terms of corporate manslaughter and senior manager. I do not think there is any disagreement on that at all. The problem for all organisations is that the existing wording in Section 2 relates to "the whole or a substantial part" and our concern is that where there is an organisation which has got a large number of subsidiary companies, which may be small in terms of the overall size but are still pretty large, a senior manager in charge of that factory could be exempted because of the wording "a substantial part". Generally, we do not want it knocked down the chain as far as possible, we do think it should be the senior manager, in terms of the ones that make decisions, which is what the Bill recommends. On that, I do not think there is any major disagreement between us, Chairman. Mr Griffiths: No. If I may, on behalf of Amicus, I gave some emphasis earlier to a slight difference between the submissions of the three representatives here. There is no problem, in Amicus' view, with the definition that you have in the Bill at present. We are concerned to make sure that definition captures, to use the phrase, the controlling mind and we can see, in a large organisation, as has been suggested, with possibly as many as a thousand workers on site, the person responsible on that site would be a senior manager and not necessarily a director and that person clearly should have the responsibility for the health and safety on that site. Where there is a specific difference is that we go on to say, with our reference to unlawful killing, that should also allow for imprisonment and not just a fine of a corporate nature. There is no difference in the definition and defining a senior manager, as well as the director, as being responsible for the corporate responsibility. What we say is, that individual, with serious breaches, could possibly be subject to imprisonment, if clearly they were the responsible person. Q41 Gwyn Prosser: Mr Griffiths, you started to tell us earlier on that you thought another deficiency in the Bill was the fact that it does not cover UK workers outside of England and Wales and indeed non-UK workers outside of England and Wales. Do you want to argue that point to us now? Mr Griffiths: My apologies, if I decided to answer a question I had not quite been asked but I was keen to make sure that this came in. Without dwelling on the repeat, we do see that it is possible for UK workers to fall outside the scope of this Act and therefore to be vulnerable and possibly to be subject to abuse, simply because of the vulnerability and the fact that they are not covered within the scope. We would want there to be a clear acceptance that UK workers working abroad could be covered in the circumstances where the parent company, once again, was the controlling influence of the health and safety requirements. Q42 Gwyn Prosser: What about non-UK workers working for that British company? Mr Griffiths: In exactly the same case, the employer having the responsibility for his employees, it is not necessarily a definition of nationality here, it is a definition of the company's responsibilities to all of its workforce. Q43 Gwyn Prosser: What is the view of the T&G, Mr Camfield? Mr Camfield: Our view is that if individuals who commit murder abroad can be prosecuted in the UK there should be no reason why a company that commits corporate manslaughter abroad should not be prosecutable in the UK. We think that this would affect only companies registered in the UK. Again, we think this is an important tool, if we are really serious about creating a culture of health and safety and not saying that British companies based here or registered here can operate with impunity abroad, because this is exactly the argument we get played back to us from certain Third World countries, which say that they can operate with impunity, whether it is on asbestos, no‑one can deal with that. We should be setting an example that where British companies are operating abroad, for offences of corporate manslaughter, as a minimum, they should be prosecuted under UK law. Q44 Harry Cohen: Some questions about the gross breach, as it is defined in the draft Bill. It includes a 'profit from failure' test. Is it relevant whether or not an organisation has profited from non-compliance with health and safety law or guidance? Mr Griffiths: There are two aspects of gross breach, I will answer that particular one but would want to come back on an extra point that we have made in our submission. In terms of the question, is it relevant if they have profited, we think that the definition and the use of the term 'profit' is wrong anyway, we think the proper and correct term should be 'benefit'. An individual company may not be making a specific profit but they could have a clear benefit from a major breach in health and safety. I think the examples are obvious but I can give some if the Committee wishes. I hope that answers, in a roundabout way, the point you make. The other thing is, while we are on gross breaches, we think that the current way in which the Bill is framed suggests, in, is it, 3(2)(b) of the Act, that there is a requirement to meet all and every single one of those breaches, and we would imagine you mean that it is any one of those and we would certainly want that correction made. Q45 Harry Cohen: To Mr Camfield, the T&G said in its evidence it would be impossible to establish that a senior manager knew or ought to have known of a breach of health and safety law. Why do you say that? Why do you say that would be impossible? Mr Camfield: We say that is the likely consequence of the way the Bill is presented, because of the definitions around what a senior manager is. We would prefer the term about a management failure, which then would enable us to determine whether in corporate liability, and here we are talking about fines, a company would be likely to be exposed to the judicial process. The problem that we have got with the senior manager test again is, because of the qualifications, you can be in the construction industry a senior manager running maybe a major project but not a senior manager within the terms of the law, because in terms of the whole structure of the company that may be just one of many projects that you are managing. Therefore, a senior manager who commits some cardinal sin based on that site might not then expose the company to a prosecution because they will not meet the test of a senior manager. Indeed, some companies might want to reorganise their structure to redefine who has what powers so that the actions of managers of particular plants, or indeed wider areas, are not seen as strategic, they are not regarded as senior managers. We think the test is too narrow. Q46 Harry Cohen: The last point on this gross breach aspect is that a court would have to look at compliance, or not, with health and safety legislation and I think you have argued that it should also be health and safety guidance. Some have argued that might be too broad. Why do you say that is relevant? Mr Robertson: At the moment legislation or guidance, I think, is what it actually says. Our concern was that it refers specifically to the Health and Safety at Work Act, but in actual fact we think there are certain other pieces of legislation, particularly the Working Time Directive, which should also be taken into account. Certainly, statutory guidance under the Health and Safety at Work Act or an improved Code of Practice, I think, under the existing wording would be covered, it does say specifically it is not just legislation, which we welcome. However, we just wanted to make clear that we do not want just legislation covered by the Health and Safety at Work Act but there is other primary legislation which relates to health and safety matters which should also be covered. Q47 Mr Rooney: To the TUC. Why do you think it is necessary for more work to be done on penalties? I know this has been kicking around for long enough. Who do you think should do that work? Mr Robertson: I think probably that is for the Government to decide. Why do we think there needs to be more done? The reality is that we know there are still 220,000 people injured every year here, so the current system of fines, the average fine still being under £10,000 a year, just is not working for health and safety offences. There is no reason to believe that it is going to work any better for the very rare corporate manslaughter offences you are likely to get under this current Bill. What we need to do is say what is actually going to work, what is going to change the culture. We would rather there were no convictions under this, because we would rather there were not any offences being committed, that no‑one was actually killing. The most useful thing about this is if it can be used to change the culture. It is not just about revenge, it is actually about prevention, that is the reason we are all here, and the current fines clearly are not working. Even the £30 million, the fact we have had them, I think honestly, that is really a sense of frustration by the judiciary that they cannot do more. We have got to say what is going to be effective. We have made some suggestions. The only other thing in this is going to be to be able to ask them to correct the mistake that they made. Despite the fact we can get serial criminals in the boardroom who have got dozens of Health and Safety at Work offences, lots of enforcement notices against them, at what stage do you say enough is enough, at what stage do we look at disqualification of directors, at what stage do we start looking to say, "Yes, we have to put them on probation, we have to look at other alternatives"? I think this is the clearest example of where we definitely need more penalties, that fines alone are not going to work, I am afraid. Q48 Mr Rooney: Amicus, you also floated the idea of the equity fine. How would you see that working? Mr Griffiths: I think we make clear reference in our submission to equity fine. I think, just a general point is that, as my colleague has just said, here is a real opportunity to bring in some alternative penalties, other than the two that are often talked about, the fines which are clearly there and that which we are asking for, imprisonment, here is an opportunity to bring in some real deterrence. The equity fine is one which we think should be given serious consideration. Not only is there a financial burden and a passing of compensation to the dependants in this particular instance, but actually it is a penalty against the shareholders, which we think will be quite useful in deterring those that have the responsibility to the shareholders maintaining their responsibility to their workforce. We think the chemistry between the management of the company, the investors represented by the shareholders and the workers in the company, to which management have a responsibility, is quite interestingly mixed by the application of an equity fine, as we have suggested. Chairman: Thank you very much indeed, gentlemen. Again, a lot of ground covered in a short space of time and a very useful complement to our first session. Thank you very much indeed. Memorandum submitted by Centre for Corporate Accountability Examination of Witnesses
Witnesses: Mr David Bergman, Executive Director, and Mr Steve Tombs, Chair, Board of Directors, Centre for Corporate Accountability, examined. Q49 Chairman: Mr Bergman, can you introduce yourself briefly and your organisation and also introduce Mr 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 to five, it added five a year, 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 it 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 we hope will 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. Mr 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 into 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 a "regulatory burden". There is actually no evidence that I know of, and I have been looking at this area for some 25 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, and creating equal conditions of competition amongst all companies so that the companies are complying with the law and are not carrying an unfair burden in terms of cost of compliance, and 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 anything that technically could be difficult or create difficulties for business as suggested by Government, or suggested by other than the Government, it is typical for that sort of language to be used, it is not in any way specific 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 as an incorporated body, so, in our view, in principle, any new offence should apply to them. The Government accepts that there are no technical problems. 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 that is required. We do not see any particular obstacles that should prevent the offence applying to unincorporated bodies. We are 50 years in the debate here. 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. Mr 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, where possible, this offence needs to be as inclusive as possible. Otherwise we will be in the same situation four, five, ten or 15 years down the line, whereby 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 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 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, whilst 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 why it might have been inappropriate is because it would have allowed an organisation to be prosecuted simply perhaps on the basis of failures at a supervisory level. If they 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 was 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 whether very serious management failures were lower down in the organisation or 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 on behalf of safety at work legislation are statutory duties. In our view, it would be much more appropriate, either instead of or in addition to, to ground the offence in relationship to those statutory duties. They 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? Q60 Justine Greening: In terms of those additional duties, they may be developed obviously over the course of time by fresh legal cases coming. Do you not think perhaps that leaves things slightly too vague, given how serious this offence would be, if somebody is found guilty? Mr Bergman: Not really, because it seems to me appropriate that you have got the ground, the key structure of legislation is the Health and Safety at Work legislation and, effectively, when they fail to comply with a duty, companies can be prosecuted in relationship to those. It would seem to me much more logical and appropriate then to ground manslaughter in relationship to those existing duties for which companies get prosecuted. Companies do not get prosecuted for breaches of duties of care, generally, so in our view it makes much more sense for statutory legislation which is broader and is also much better understood than civil law duties of care. Mr Tombs: Just to go back to the first point that was made, in terms of imposing additional burdens upon companies, this does not impose additional burdens because the knowledge is, or should be, existing within companies as to what those statutory duties are, under Section 6, and how they can be discharged. Mr Bergman: One other point is the 2004 decision of the Court of Appeal in the case of (Rattle ?), which looked at duty of care, which also raised this issue about the inappropriateness of using civil law duties of care blindly in relationship to a manslaughter case. Q61 Justine Greening: I think another point that you pick up on is that the duty of care is in the context of, for example, supply by an organisation of goods and services, and specifically it says supply rather than the provision. I think that is something which in your submission you picked out as being possibly a weakness. Can you give us an example of an activity that you think might fall under the term being a provision of services rather than a supply and therefore would not be captured by this legislation? Mr Bergman: I have to thank the Home Office for clarifying this particular position with me. When I was discussing with them how the offence might apply in different circumstances, it was their view that, certain services that are provided by public bodies, they are providers of a service but they are not suppliers of a service and they gave examples of the Police or the Prison Service or law enforcement bodies, inspection agencies. Effectively, that particular line would exclude the following deaths: deaths of members of the public from police conduct, deaths of the public in a government prison, deaths from failure by social services and deaths from government inspection regimes. There may or may not be, obviously there are deaths in one of those examples more than another, however, clearly, that particular exemption is quite a powerful one and, we would avert, can be dealt with easily by simply adding the words "or provision" to allow those deaths technically to come within the application of the offence. Q62 Mrs Engel: You have answered the first question I was going to ask you, when you went into quite a lot of detail about the exemptions and the exclusively public function and the public policy decisions of public authorities. I do not think I will go into more detail on that. One of the other problems with this Bill is that it gives legal protection to the right to life. My question really is how can there be a breach of the right to life and any other Articles in the European Convention on Human Rights? It is moving on quite far but I think it is a very important question. Mr Bergman: That was the subject of an appendix to our response, which was advice from two human rights lawyers. I am not a human rights legal expert. The key issue is that the right to life imposes certain positive obligations upon states, and that has been defined in Strasbourg law and in domestic law such that it is appropriate, in certain circumstances, for there to be criminal law remedies. The core concern of our legal advisers was that where the death resulted from certain state activities there would be exemptions, and the exemptions are often based on arbitrary distinctions, whether or not a death resulted from a public policy decision-making process, for example. That was their key reason why they thought that potentially the legislation as it is now, because of the high level of exemptions, potentially can be in breach of the positive obligations imposed from the state in relationship to the right to life. Q63 Mrs Engel: Do you think really that courts are qualified to make judgments on public policy decisions made by public authorities? Mr Bergman: I think they do. I think this comes to the issue that you were going to ask us but did not, which was about the exemption relating to public policy decision-making, which is one of the key exemptions used by the Government to restrict the application of this Bill. In our view, it would be inappropriate to give a blanket exemption to deaths which result from the public policy decision-making of public bodies, however negligent that process of public policy decision-making may have been. We accept that probably it is going to be in very few cases where such a case will be appropriate to prosecute. Indeed, there may be limited cases where investigations would be required. Simply to give a blanket exemption, in the way that they do, in our view is entirely inappropriate because those decisions can cause death. It is important, if you are going to make an historic decision, which the Government has made, by removing Crown immunity through this Bill, if you are going to give that life, you cannot then simply exempt those activities that cause death from those public bodies in the same document. Mr Tombs: To be clear, it is easier for me, I think, to see this, as a non-lawyer, because I do not understand the technicalities around it, but it seems to me that those issues upon which the courts are adjudicating are not the outcomes of public policy decisions, they are public policy, per se, from mechanisms by which those decisions are reached, to ensure that those decisions made by a senior manager or managers have met certain basic standards and are not negligent, for example. It is the processes rather than the outcomes that is a challenge to them. Q64 Mr Dunne: You talk about the exemption from Crown immunity but one of the specific points of evidence that you picked up was the question of military activities. Do you accept that certain military activities should be exempted from the law and, if so, which should be included and which should be excluded? Mr Bergman: We are not experts, as an organisation, in this particular area, death resulting from military activities. What we are concerned about is the breadth of exemption that exists in the current draft, such that preparation for simulation activity, or military activities, death that results from that could be exempt. Q65 Mr Dunne: Do you mean training? Mr Bergman: In support of training, it is not just training, it is not just an exemption of training for military activities but it is support activities for training for military activities as such. The MoD has to comply currently with health and safety law. They should be abiding by it. In the course of undertaking training, which under the current rules of jurisdiction that have been set up by the Home Office would be in this country, if death takes place then that is a result of gross failure on the part of senior management. I cannot understand how you can justify that exemption. It seems to be clear that sort of offence should apply to them. Currently they have to comply with existing health and safety law; they cannot be prosecuted for it because they are a Crown body, but they have to comply with it. Mr Dunne: We could go on with this at some length but really I do not want to, but I think you could get in some definition about who is a senior manager in the context of the Ministry of Defence, for example, as well, the different sort of structure from a company. I should add, Chairman, I have disclosed my interest to the Work & Pensions Committee but I have not specifically to this Committee. I am a director of companies and some of the things that have been said today make me feel a little uneasy that I have not made that clear to the Committee. Chairman: Only for that reason or for other reasons? Q66 Mr Dunne: I do not think I have got any risk. Moving on to my last question, which has been raised with other witnesses today, and that is to do with territoriality, the Government has argued that it would not be possible to apply the offence to UK companies conducting business overseas and causing deaths abroad. How do you react to that? Mr Bergman: The current jurisdiction principles that the Home Office is proposing are that. If a death takes place in Britain it does not matter where the management failure took place. It could take place in Britain or it could take place outside Britain, the British courts would have jurisdiction. In principle, in an ideal world, you would argue that where British companies operated abroad and they caused death that offence should apply, but we accept that health and safety law does not apply outside this country so there is no point really arguing that particular position. What we do argue is this, that it would be appropriate to allow British courts to have jurisdiction over the following category of death, which is, where the death takes place outside Britain as a result of gross negligence which takes place in Britain, so the management failure, the serious management failure, took place in Britain but the death took place outside Britain. The bizarre thing about this is that would be a much easier offence to investigate than the scenario of the management failure outside Britain with the death in Britain. It would be very difficult to investigate companies which were operating abroad; it is much easier to investigate them in Britain. We believe that the jurisdiction should extend in that way. I think it is important just to give a context to this, and what we are saying is not in any way radical, that under existing manslaughter law a British citizen can be prosecuted even if they commit a death abroad and their conduct is abroad and that can be brought home to the British courts. In our view, a British company, or companies operating in Britain, should have the same sorts of limitations to their activities. There is a good public policy reason for that. The British Government should not want British companies to export hazards, to use Britain as a base for exporting hazardous activities, as such. In our view, that would be an appropriate change. Mr Tombs: Again, to speak as a non-lawyer, the proposal seems counter-intuitive, to me. As an employee of a university, if my university asked me to go to work in South Africa or the Middle East, which is done, to do some consultancy work, I would expect my university to carry out some form of risk assessment which gave me some kind of duty of care, as an employee. I do not think that ends simply because I go to work for three months or three weeks in a different jurisdiction. Certainly, if my university sets up a subsidiary company in Malaysia, which it has done, and asks me or colleagues to go to work, again, I do not understand, it seems to me entirely counter-intuitive that one would not expect decisions made in Liverpool, which is the base of my university, not to be judged according to this law, no matter where the death may take place. Q67 Chairman: Can I ask a question about the interaction of this with public policy decisions and it might help to clarify our understanding of this. There was a case, a week or so ago, of government ministers losing, effectively, a High Court case regarding the deportation of a Zimbabwean asylum-seeker. In circumstances where, for example, a minister had agreed the deportation of a failed asylum-seeker and that asylum-seeker then died in the country to which they had been returned, is it your view that under those circumstances the minister would be open not only to having their decision challenged, as they might well be at the moment, either under ECHR or, historically, as happens, through judicial review, but also might be open to criminal prosecution; in which case, under what circumstances? Mr Bergman: First of all, it is important to note there is often a misunderstanding, not that you have it, in relationship to Crown immunity, which is that civil servants and ministers technically can be prosecuted for criminal offences now. They do not have Crown immunity. It is the departments of government, the bodies, which have Crown immunity, principally. Currently there could be circumstances in which civil servants could be prosecuted for manslaughter if their conduct was subject to investigation. In relationship to that particular issue, clearly that brings together two tricky issues: number one, the jurisdiction issue and, number two, the public policy issue. We would say that any activity which was grossly negligent, which effectively complied with the senior management test in Britain, within an organisation, that is quite a tough test, not an easy test, whether it is our view of what the test should be or the Home Office's test of what it should be, falling far below what could reasonably be expected, and a death takes place directly as a result of that and you can prove the chain of causation, then clearly an investigation should take place and if the evidence is proved then a prosecution should take place and conviction should follow. In relationship to the examination of the public policy decision-making, that may not be a straightforward process, we accept, but clearly the process should be gone into. For example, if the minister or a group of ministers, civil servants or senior managers within the Home Office all knew, in fact, that there was a serious threat to this particular person and, despite that, despite having clear awareness of that, they decided not to prevent him from being deported then clearly that would be an appropriate set of decisions to be examined under an offence like this. Q68 Mr Rooney: You said in your memorandum that it is reasonable to assume that courts will continue to impose fines less than the FSA, for instance, despite the more serious offence. Have you changed your mind on that since the Balfour Beatty/Network Rail judgment, or do you think that still stands? Mr Bergman: I will make an introductory comment about sentences. If the Government can be criticised for one thing, for which there is absolutely no excuse, it is the way it has dealt with sentences. It has had years to consider alternative ways of sentencing organisations and companies. Canadian provinces and Australian states have produced report after report after report detailing alternative forms of sentences that can be imposed upon organisations. They are out there, they are used, there are options available, and the fact that the British Government has not been able to do the sort of work that one small Canadian province or Australian state has been able to do in the last ten or 15 years is extraordinary. I just want to put that on the record. I think it is important to note that the fines are large but often they are not as large when you look at the profits and turnover of these companies. Balfour Beatty is a very large company; we are talking about profits and turnover of hundreds of millions of pounds. That is one point. The second point is, if Balfour Beatty had been convicted of manslaughter how large would the fine have been, it would have been much, much larger. It was fined for a health and safety offence. Maybe the judge also had in his mind that the law is unfair so he needed to impose a fine that was higher perhaps than one makes for a usual health and safety offence, but what it indicates is that a fine for manslaughter would be much, much higher, maybe half of the profits of Balfour Beatty, the whole year's profits of Balfour Beatty may have been threatened. I do not think the fact that the courts are suddenly imposing large fines is an argument against the offence of corporate manslaughter and the need to consider what levels of fines courts can impose in relationship to manslaughter. If you look at the FSA and you look at the sorts of fines, these are administrative fines, these are not fines which are imposed by the court, these are fines imposed administratively, they are much, much larger than the sorts of fines that are imposed by the courts in relationship to health and safety offences. Q69 Mr Rooney: Just on the possible alternatives, a whole year's profits, well, smart accountants can soon make profits disappear. Small businesses would not be able to afford those smart accountants so they would be more at risk, proportionately, and similarly on the percentage of turnover, ten per cent of Balfour Beatty's turnover, great, ten per cent of a corner shop makes a life worth £5,000. There has to be some sort of minimum. I do not think this is as easy as you appear to be saying. Accepting that you cannot restitute a life that has been taken, you cannot put a monetary value on it, it is more of a penalty thing. Do you not think perhaps you have been, dare I say, glib? Mr Bergman: When you think about sentencing organisations, or indeed any form of defendant, I suppose, you have got to look at the seriousness of the offence and the wealth of that particular defendant and so both of those need to be taken into account. You have picked up very astutely on the problem about a lot of the discussion about fines and sentences, because what may appear to be a relatively small fine may be to a small company a devastating fine. What may appear to be a very large fine, to a large company may be just a drop in the ocean. It is important to look at the relationship of the fine to the profits and turnover of an organisation, if that is what you are doing, if you are imposing a cash fine. What was useful about the way the FSA had this ten per cent turnover is that it seemed to encourage large fines, and that has had an impact in terms of the sorts of offences that the FSA are looking at. For years and years and years the fines for health and safety offences have been relatively low, they are now increasing. I cannot explain why that is the case but clearly that is important, but I do not think that is a reason to totally get rid of fines in relationship to possible sanctions in relationship to manslaughter. Mr Tombs: Can I add just a couple of points to that. I think that you are right, it is not easy, these questions are not easy. That takes us back, I think, to David's very first point, which is that fines are a very blunt instrument and there is a whole series of proposals out there which should have been actively considered for this legislation, and indeed more generally for health and safety offences, which will take us beyond monetary fines. Fines are very blunt and very crude and there is a whole series of problems with them. A second point I would make is this. There will be inequities but we do have to think in terms of percentages, because if we allow discretion for judges and rely upon judges to push up the fines for the bigger companies, actually beyond a certain level probably they will not do that. The evidence in the United States in the nineties, in fact, indicates that beyond a certain level judges simply will not go because the fines look absolutely outrageous, even though they may be a very small percentage of turnover. I think, despite associating inequities, if we are going to use fines we do need to look at some kind of unit or percentage system, probably. Chairman: Thank you very much indeed, gentlemen. It was a very good first session. |