Corporate Manslaughter and Corporate Homicide Bill

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The Chairman: With this it will be convenient to discuss the following amendments: No. 100, in page 2, line 4, leave out ‘a fine’ and insert ‘one of the following penalties:
(a) a fine;
(b) a corporate community service order; or
(c) any sanction set out in an order laid by the Secretary of State, subject to the affirmative resolution procedure.’.
No. 32, in page 2, line 4, at end insert—
‘(b) an admonition; or
(c) a compensation order.’.
No. 33, in page 2, line 6, at end insert—
‘(7) Any penalty imposed under subsection (5) shall be notified by the court to the Registrar of Companies and the Registrar of Companies in Scotland.’.
Ann McKechin: Good morning, Mr. Gale. Three of the amendments in this group are in my name andthe other is in the name of the hon. Member for Kingston and Surbiton. They are intended to testthe Government on the range of punishments for the offence, which is clearly intended to be seen by the public as having a particular degree of gravity.
The report of the Joint Committee report stated, and I agree, that there should be a range of punishments to allow the widest consideration to be given to appropriate punishment of the offence in individual circumstances. Amendment No. 32 refers to compensation orders, which were the subject of a specific recommendation by the Joint Committee. There was some argument about the point, but in general the feeling was that compensation orders, or the possibility of making them, were appropriate. An example provided to the Joint Committee was that of people over the age of 18 who do not have dependants, whose deaths were said to be cheap. That is a glaring flaw in the system.
A compensation order is appropriate in cases of particular severity, in which there has been drastic loss to victims and their families. It is appropriate also that, because the offence will be rare—the Government have estimated that the number of prosecutions will be fewer than 10—a specific entry be made in the register of companies. That entry should be public and open to anyone intending to invest in or deal with the company, so that such people are aware of the company’s history and can check whether the company is a proper one with which they wish to have a relationship.
The amendments are testing amendments, but I hope that when the Minister responds he will say whetherthe Government have further considered the recommendations of the Joint Committee report, and whether they are prepared to consider a wider range of penalties, so that the courts can fulfil their role and penalise appropriately.
Mr. Davey: I welcome the amendments proposedby the hon. Member for Glasgow, North (Ann McKechin), Together with amendment No. 100, which stands in my name and that of my hon. Friend the Member for East Dunbartonshire (Jo Swinson), they give the Minister a chance to explain the thinking not just on the sanctions in the clause, but on development of those sanctions. On Second Reading, the Minister indicated that when Professor Macrory has finished his review of directors’ duties, and how they apply to the wider aspects of corporate legislation, the Government may wish to return to the matter, so it is particularly germane to have this debate now.
Amendment No. 100 offers a method by which the Government could, through the affirmative procedure, create another sanction through secondary legislation without waiting for space in the busy parliamentary timetable. Hon. Members might feel, quite rightly, that that is not the appropriate way to proceed, because adding sanctions needs primary legislation. My view is not hard and fast, but I wanted to give the Minister a chance to explain how the Government intend to proceed, particularly once the professor has made his recommendations and the Government have had a chance to consider them. Does the Minister intend to ask the Sentencing Guidelines Council to discuss the type and size of fines as well as any alternative penalties?
The amendments tabled by the hon. Member for Glasgow, North have a lot to commend them. We look forward to the Minister’s response to them, because a compensation order has a degree of attraction. In amendment No. 100, the Liberal Democrats suggest a corporate community service order to tease out the type of innovation that the Government are looking for. We have not spelled out in the amendment exactly what a corporate community service order might be, and I am sure that we could have some fun thinking about it, but hon. Members will understand the thinking behind the amendment. We need to consider the matter afresh in light of the innovations respecting sanctions that we have seen in other aspects of the law. I hope that Professor Macrory’s review will be wide ranging and innovative, and that the Government will seriously consider such new ways of imposing sanctions.
James Brokenshire: This is a helpful debate about the sanctions and powers available in relation to the Bill, although the comments of the hon. Member for Glasgow, North and the hon. Member for Kingston and Surbiton demonstrate that perhaps it should take place in the context of a more wide-ranging review of the approach to using criminal sanctions to deal with corporations. It is a welcome opportunity to raise the issue.
The concept of restitution is interesting, given that one of the reasons why we are promoting the Bill is to give some sense of justice to families who have suffered the loss of a loved one. Not only do they want justice and to see someone held accountable and responsible for the actions that led to the death of their loved one, but they want a sense that things have been put right. A fine certainly provides a punishment. If set at the right levels, we hope that it would suitably penalise the company concerned and bring an element of retribution into the punishment, as well as ensure that conduct and behaviour change so that such terrible accidents and events do not occur in future.
How can we make a company make amends—restitution—for the harm that it has caused? I have a great deal of sympathy with the approach that incorporates restitution. The reason why the matter should be part of a wide-ranging review is the difficulty of doing so in practice. Ultimately, for a corporation, one is not saying that somebody will personally and individually carry out the actions; the corporate entity is found guilty and it is therefore the corporate entity that must make amends. That is why issues of the practicalities make it slightly more difficult.
Ian Stewart (Eccles) (Lab): I welcome the hon. Gentleman to his position on the Opposition Front Bench. He speaks of the complex distinctions to be drawn between the individual and the corporate body, but does he not accept that an individual can be responsible on behalf of the corporate body—for instance, on matters of finance or the environment? Is there not a problem for all who are trying to resolve the difficulty—it is almost a conundrum—of whether a named individual can represent the corporate body?
James Brokenshire: The hon. Gentleman will appreciate that that is the reason why the Bill was introduced, and it was part and parcel of our debates last week about the nexus of the acts of individuals or groups of individuals and the acts of the corporate body. We are talking about different legal personalities; the corporate body is a separate legal person, even though its actions are directed by its board of management, other employees and senior officers. The hon. Gentleman will know that a charge of manslaughter could still lie against an individual as a consequence of his default in certain circumstances if it can be shown that he had acted in a highly inappropriate way. That is the present law, and it should certainly be respected.
It is an interesting concept—I hope we will have the opportunity to debate it in greater detail—that a corporate body could provide restitution or to put things right. The amendments would advance that debate and allow us to consider other ways—a community award, a sum of money or some other activity—of making amends or seeking to make particular changes. That is why I welcome the debate, albeit that the subject probably needs to be fleshed out and considered in the wider context rather than concentrating on the one specific offence. It could have wider application, which is why a more wide-ranging review would be beneficial; it could come up with suitable approaches to deal with such issues.
The hon. Member for Kingston and Surbiton suggests specifying other punishments in the new subsection (5)(c) proposed in amendment No. 100, but it would not be appropriate to do that through a statutory instrument. It is better done through primary legislation. I note that the hon. Gentleman said that he was not wedded to the approach suggested in the amendment, but that he wished to advance the debate to encompass creating flexibility and taking a different look at the way in which corporate bodies could be held accountable for their actions.
It is difficult at this stage to consider the matter in isolation, saying that we should take the approach suggested by the amendments. However, it is worth considering the wider aspects of the liability of corporate bodies. We should explore whether a more direct approach could be taken to providing restitution for individuals and families who have suffered as a consequence of the acts of corporate bodies—that not only should corporations be fined but that some more general restitution should apply. However, that is a wider debate than the one before us today.
Michael Fabricant (Lichfield) (Con): Does my hon. Friend consider that there should be an opportunity to take civil action against the body corporate? If such an opportunity is not readily available, might one be made available by amending the Bill?
James Brokenshire: My hon. Friend raises an interesting point about the civil remedies that might apply to a particular action or event. If somebody is killed as a consequence of a company’s default, not only could action be taken under criminal law, as we are debating this morning, but a more general civil action make be taken and a claim of negligence be laid against an individual using the civil process and leading to damages or some other award.
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Clearly, if a corporation has been found guilty of a criminal offence, the higher standard and burden of proof will apply—beyond all reasonable doubt, or whatever the modern phraseology is. That test is a higher standard to meet than the balance of probabilities test that would apply in a civil action. Therefore, one would suggest—this is usually how it happens in cases where there is a criminal and a civil line of approach—that the criminal action should take place first. If the court finds against the defendant, a civil action will usually follow. It will hopefully be easier then for the individual to prove their case in the civil action.
The Chairman: Order. Before we go too far down this road, it is an interesting discussion, but it is slightly outside the scope of the Bill.
James Brokenshire: I will be guided by your chairmanship, Mr. Gale. I respect your point and the latitude that you have kindly granted us thus far in this debate. I draw my comments on that point to a close.
The debate has been interesting. I am sure that hon. Members will be interested to hear what the Minister will say about any further review undertaken by the Government to ensure that corporations are seen to be held to account appropriately.
Ian Stewart: Before the hon. Gentleman sits down, will he answer a question? Some of us in the Government have raised the issue of corporate probation and have alluded to the Canadian experience in connection with the problem that we addressed earlier of whether an individual can be identified in a corporate case. Has he looked at that experience, and has he anything to tell the Committee about it?
James Brokenshire: I am grateful to the hon. Gentleman for his intervention in relation to other experiences. The corporate probation issue is interesting. I must confess to the Committee that I have not examined it in detail.
We need to examine approaches taken elsewhere to see what works. Ultimately, we want something enforceable and effective. When I look at sanctions such as the community punishment or service awards mentioned in the amendment, I question whether they will actually operate in practice. How would we ensure that they were complied with? Who would ensure it? We would be dealing with a corporate body rather than an individual, which would make it much less easy to identify whether somebody was in default and whether further action needed to be taken against them for that failure.
We must consider best practice to see what would be effective in providing a sense of justice and retribution as well as a sense of restitution, so that we get a rounded judgment. A fine is a particular way of doing that. It is a penalty against the company and might cause the company and its shareholders pain in the sense of financial loss, but that pales into insignificance next to the emotional loss suffered by the individuals and families who have lost a loved one in terrible circumstances.
It is quite helpful to have had this debate, although the matter is much more wide-ranging. It touches on so many issues. Should we allow registration of criminal judgments against companies at Companies House, as the hon. Member for Glasgow, North suggested, so that we can see the history of a company and its standards? They are interesting issues, but they must be viewed in a joined-up way. What should apply for less serious offences and what should apply for more serious ones? Should there be distinctions between the two? That debate is needed in its broader perspective and then, perhaps, we can return to how the specific punishments would apply in the context of individual criminal offences and what would apply in this case, compared with any other cases.
Tony Lloyd (Manchester, Central) (Lab): I should like to make a few brief remarks in support of my hon. Friend the Member for Glasgow, North—and, in general terms, of the hon. Member for Kingston and Surbiton—who has sought to open up the wider debate about what are the fit and proper mechanisms to change the safety culture, particularly in respect of the most serious events leading to the deaths of employees or members of the public.
This is an important debate. It is interesting that no hon. Member who has spoken so far has been opposed to the overall thrust of the measure. I have a slight problem with the last point that the hon. Member for Hornchurch made about looking at the issue in the round. Of course, he is right; we do need to see things in the round, but doing so is a recipe for having years going by while learned people in the legal profession deliberate.
Mr. Sutcliffe: Does not that make the point about why it is important to have a corporate manslaughter Bill, rather than amend the Health and Safety at Work, etc. Act 1974? This is why the Bill is necessary.
Tony Lloyd: My hon. Friend the Minister does the job he has to do; but he is right. I know that he will not agree to the amendments, which take a slightly wider view, and nor would I, were I he.
The hon. Member for Hornchurch says that it would not be acceptable for us to create sanctions by the affirmative resolution procedure. It would be frightening to leave in the hands of the Secretary of State the power to create new penalties, the bases of which have not even been discussed in this Committee in general terms, never mind specifically.
I accept that the amendments need much more consideration, but the overall basis of the debate is important. As hon. Members have already said, if we are considering how to change cultures, it is important that we are aware of a consistent failing in our criminal justice system in respect of the recognition of the victims’ needs. Obviously, in this case the victims are the deceased, but the families of the deceased are often victims too. Most Members of Parliament have met people who have lost their loved ones in such tragic circumstances. People often tell me that they do not want financial compensation. That may sometimes be appropriate, but it is not always what motivates people. The families of those who have been killed in such circumstances are motivated by what they see as the total failure of the criminal justice system to recognise that something terrible has happened and that there was a responsibility on individuals or corporate bodies. The system seems to allow things to drift on for years. In that context, it is important that we consider a range of options that can bring the law to bear on those who allow such tragic circumstances to take place.
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