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.
11
am 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. Like my hon.
Friend the Member for Eccles (Ian Stewart), I shall continue to
advocate the need for individual responsibility and therefore for
penalties against individuals. However, as the hon. Member for
Hornchurch said, there is a strong analogy in regarding the
compensation process as something that can be
built into the criminal justice system, rather than being part of a
separate process between the criminal and the civil law. I am not
aware, because I am not a lawyer—hon. Members from Opposition
parties have far more legal background than I do on which to base
comment—whether this situation exists anywhere else in the law
at the moment. But I cannot see, as a point of principle, why we would
want to turn against that. This harks back to an old principle in
English law and law still operating in different parts of the
world—the rather difficultly named “blood
money”—whereby compensation can be a way of expunging
guilt. That may be appropriate in some cases. I want the full weight of
the law to bear down on a guilty company. However, one of the problems
that I have with a system consisting only of fines is that, if a
company is in a parlous economic position, no wider social purpose is
served by inflicting a large fine on that company if the fine puts in
jeopardy the livelihoods of people who work for it—people who in
some communities may include family members of those who have lost
their
lives. | 
