Corporate Manslaughter and Corporate Homicide Bill

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Jeremy Wright: I rise to deal with the hon. Gentleman’s point on whether this type of provision is available elsewhere. It is. Under the criminal law, courts are invariably invited to consider a compensation order alongside other penalties, though on the facts of individual cases that is rarely relevant because defendants usually cannot make compensation payments. That is not the case here and I agree with what the hon. Gentleman said about the necessity of compensation: it would be appropriate in the case of corporate institutions.
Tony Lloyd: It seems to me that there is a widespread recognition that that could be a sensible way forward. My hon. Friend the Member for Eccles invited the hon. Member for Hornchurch to consider probation orders. Those orders are a little different from admonition orders—I understand from my hon. Friend the Member for Glasgow, North that admonition orders would impact on the corporate body specifically. As an extension, I wondered whether corporate tagging and such like would be possible, but maybe that is a flight of fancy. Admonition orders could have a real impact on corporate behaviour, in the sense that if a large national company had been the subject of corporate manslaughter legislation, that would be well known. We saw that with Transco, which still holds the record for a fine on a corporate body in this country for breach of health and safety laws. For large companies it would be obvious that they had behaved in such a way, and investors and others wanting to deal with the company would know it. For medium-sized and small companies, having something on the record could well serve as a disincentive, such that it could change corporate behaviour.
Mr. Jim McGovern (Dundee, West) (Lab): Last week, I quickly realised that I was in a room full of lawyers, so if I get things wrong I am sure that I will be corrected. My understanding of an admonition is that it is a legal term for a slap on the wrist. Does my hon. Friend think that that is appropriate in the case of loss of life?
Tony Lloyd: I am not sure whether, as my hon. Friend the Member for Eccles muttered, my hon. Friend the Member for Dundee, West (Mr. McGovern) said “lawyers” or “liars.” That would be a matter for you to determine, Mr. Gale, and I shall not pursue it any further. My hon. Friend’s point is important, but I can think of circumstances in which different levels of penalty may be appropriate. I make no bones about my belief that in the most serious cases of corporate manslaughter individuals should bear responsibility, and if responsibility is clear and proven, should pay the same sort of penalty as would be expected in the case of serious motoring offences, such as reckless driving. Individual directors or employees would end up in prison, and that would be absolutely right—it would recognise the serious nature of recklessly causing death. An admonition order, or other penalties, may be appropriate as something that would stay on the record and would indicate that a company had behaved in a certain way, so that people dealing with the company in future would be aware that the company was a reckless one. Long after the headlines had disappeared from the local newspapers, that would still be there on the record.
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Ian Stewart: I was pleased to hear my hon. Friend’s explanation and expansion of what we are attempting to do in Committee. We are addressing a range of sanctions to fit the key issue which, I am sure my hon. Friend the Member for Manchester, Central (Tony Lloyd) will agree, is for families to see justice done. The hon. Member for Hornchurch has mentioned that on several occasions. I therefore make no apology for pressing the issue to the boundaries, so that we can examine the range of available sanctions, including the potential for identifying a named person who represents the corporate body. It is important that we do not leave out what could be considered by families to be justice.
Tony Lloyd: My hon. Friend knows well that I sympathise with the case that he is putting forward. I therefore refer to the concept of probation orders. They are similar to admonition orders. Used in the Canadian context, they impact on individual directors. In some circumstances, I would regard a probation order as being a ridiculously trivial consequence for a director, but there are times when it would plug a gap in the existing levels and range of penalties. I suggest admonition orders for corporate bodies, and probation orders for individuals and named directors. A director against whom a probation order was on the record would find it difficult to move from one company to another. Few companies would want a person with a probation record to chair their board.
Ann McKechin: Does my hon. Friend agree that a probation order would be appropriate when, for example, a company had little money with which to pay a fine, as a result of which the fine imposed by a court would be severely limited? Yet the court would want to ensure that the future practices of the company, particularly if it became more profitable, still did not escape an appropriate form of punishment.
Tony Lloyd: My hon. Friend is right. In specific circumstances, individual servants of the company could be guilty of manslaughter even under existing law, whether or not we are discussing corporate manslaughter and individual liability. However, it could still be considered that the company and individual directors had general responsibility—not enough for individual liability against those particular people, but enough to carry the test of corporate manslaughter. As my hon. Friend said, in some circumstances it would be appropriate for admonition and probation to be kept on the record. For the company to expunge the admonition or probation, it would be important for it to demonstrate that it had put its house properly in order and had changed its ways and corporate culture. That would serve as part of the armoury in driving through the change in health and safety culture that we want to achieve under the Bill.
I do not seriously expect my hon. Friend the Minister to accept the amendments today. However, I hope that he will not pour scorn on the concept and accept that there is merit in further examination of such proposals. As the hon. Member for Rugby and Kenilworth said, perhaps we can consider the non-used compensation powers under existing criminal law. He educates me. As I confessed last week, I come here for my legal education. Courts could decide whether to use that concept, admonition or probation in individual cases, particularly as a way in which to change culture and behaviour. Furthermore, an important part of what we want to achieve is a system that gives comfort to the bereaved and ensures them that they are being taken seriously by our judicial process.
James Duddridge: This has been a useful discussion. I am sure that the Minister will want to reflect on what has been said and bring forward Government amendments. I was particularly impressed with the elegant nature of amendment No. 31—with its simplicity but wide-ranging effect—from the hon. Member for Glasgow, North. The hon. Member for Manchester, Central said that it might be withdrawn or that the Minister might not accept it if it were pressed to a Division. If it were pressed, I would be minded to vote for it on the basis that it would be a clear indication from this Committee that it was serious about asking the Minister to fill in the detail.
If the Minister were minded to consider amendment No.100, I would suggest a few amendments. It refers to
“one of the following penalties.”
There is potential merit in referring to “one or more” of those penalties—that is to say, a fine in combination with another element.
I was also concerned about corporate community service orders. I think I understand what that means—in terms of restorative justice—and am supportive of it. However, if the Minister were to add more detail, we would have a closer definition of exactly what that entails.
In relation to paragraph (c), there might be benefit in putting more details under the potential sanctions. One of the greatest sanctions on a corporate is to damage its brand, perhaps more so than a financial penalty. For example, if a soft drinks company were prosecuted and forced, for one year, to print on every soft drink can that was produced that it had been convicted, that would be both a strong sanction and a preventive measure.
I did not fully understand why the hon. Memberfor Glasgow, North had not combined amendments Nos. 31 and 32. However, that might be my inexperience of this place or an indication that the hon. Lady was hoping that if both amendments were not passed, amendment No. 31 might be.
Mr. Sutcliffe: I add my congratulations to hon. Members for their contribution to what are, as has been said, probing amendments that test the Government’s view on sanctions. I am happy to consider many of the points that hon. Members have made this morning in the spirit of what we are trying to achieve, namely to change the corporate culture.
As this group of amendments suggests, it is vital that the new offences of corporate manslaughter and corporate homicide are accompanied by appropriate sanctions. We cannot imprison a company, so it is vital that the penalties for the new offence properly punish the convicted organisation and sufficiently deter them from future offending.
It is even more important, as my hon. Friend the Member for Eccles says, that the families involved see that justice is being done. My hon. Friends the Members for Manchester, Central and for Eccles are consistent in their views about the issues affecting individuals and I am sure that we will return to those as we go through the other clauses.
As these amendments make clear, there is some concern that fines are not enough. However, the courts are showing increasing willingness to hand down severe penalties in serious cases of health and safety breaches. Last year saw the highest ever fines against a railway company in relation to Hatfield when Network Rail was fined £3.5 million and Balfour Beatty, in another area of the industry, was fined £7.5 million, and, as has been said, Transco was fined £15 million for health and safety breaches.
Fines for the new offence will vary enormously according to the circumstances—they will need to reflect the seriousness of the incident and the size of the company concerned. However, we expect the courts to take the new offence very seriously. The hon. Member for Kingston and Surbiton is right that the Sentencing Guidelines Council will be issuing guidelines for the new offence.
However, the fine is not the only sanction that will arise out of the new offence; it will be coupled with the censure of a very serious criminal conviction. The Bill’s purpose is to make it easier to prosecute complex organisations when their gross negligence causes someone to die, so the seriousness of the conviction will mirror the gravity of the offence, which has not been the case for complex organisations prosecuted under current law. That is the driving force behind the Bill, and it is why we differ from the Opposition on amending the 1974 Act.
Nevertheless, we recognise the concern that financial penalties alone might not always be enough to change undesirable business behaviour. For that reason, the Government have commissioned a comprehensive review, led by Professor Richard Macrory, of existing penalty systems for corporate offences. The review team is consulting on a range of proposals for more innovative penalties for regulatory offences. It is also considering the use of a wider range of sanctions in the criminal courts.
Amendment No. 100 proposes corporate community service orders, which I was interested to hear about. A similar approach, in the form of corporate rehabilitation orders, is under consideration in the Macrory review. The sort of order that Professor Macrory has been considering would enable the court to require an organisation to undertake specific activities. A company might be obliged to provide extra personnel training in health and safety matters or to undertake some reparative activity within the community. In the consultation paper he published in May, he suggested that compliance with the order would be monitored and the company would be returned to court if it failed to observe the terms of the order.
The alternative sanctions under review offer some interesting avenues for the future, and the Government are looking forward to the publication of Professor Macrory’s findings this autumn, but further work and consultation will be needed on the practicalities of any recommendations made by the review. It is not simply a case of granting courts new powers. For example, detailed work would be needed to give courts frameworks for setting rehabilitation orders and to decide how compliance would be monitored. Clearly, the issues go wider than corporate manslaughter. The Government will consider sentencing for corporate offences in the light of the Macrory review findings.
Jeremy Wright: The Minister has rightly identified the need to make a full assessment of how the orders would be enforced, but would he also say that it is important to look at the cost implications of monitoring and enforcing the orders? In criminal law, we have seen the extra pressure placed on the probation service when extra orders are introduced. It would be unfortunate if such cost implications were not considered in this context also.
Mr. Sutcliffe: I am thankful for the hon. Gentleman’s intervention. That is the very nature of what needs to be considered. It will come as no surprise to him that the Home Secretary is keen to ensure that we consider the cost aspects of implementation. It is a fair point across the criminal justice system. He makes it well, and I thank him for it.
Mr. Davey: Would not one solution be to ensure that any fine that accompanied one of the new, innovative orders was sufficient to meet the Government’s monitoring costs?
Mr. Sutcliffe: That is one possible solution. Clearly, we would have to consider the implications. I think that that is why the hon. Member for Rugby and Kenilworth said that we need to look right across the piece to ensure that we are not creating another problem by solving one problem in a particular way.
The other proposal put forward in amendmentNo. 100—that the Bill should provide for sanctions to be identified and introduced by affirmative order—is an interesting one. However, I do not think that it is wise to delegate such a wide power in that way. As I have said, the Government will consider carefully how to take forward the proposals made in the Macrory review. Any changes to sanctions for corporate manslaughter will be made in that wider context. It is not necessary to provide for it in the Bill.
I turn to admonitions. As my hon. Friend the Member for Glasgow, North said, they are dispositions in Scotland only. It is difficult to envisage circumstances in which the conduct of an organisation would be grave enough to merit a conviction for homicide but the appropriate sanction would effectively be a formal reprimand. Nevertheless, if there are such circumstances, it is already possible under section 246 of the Criminal Procedure (Scotland)Act 1995 for a court to dismiss with an admonition any person convicted by the court of any offence, and that would include organisations convicted of the new offence of corporate homicide. Clause 1(5) will not prevent use of the disposal, and there is therefore no need to make special provision in the Bill.
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I agree that the courts should be able to make compensation orders in appropriate circumstances. I am satisfied that the courts in England and Wales already have that power. Under the Powers of Criminal Courts (Sentencing) Act 2000, the criminal courts can award compensation orders against a convicted defendant for any personal injury, loss or damage resulting from an offence. It applies to corporate defendants in the same way as it does to individuals. There is therefore no need to make specific provision for that in the Bill.
However, we do not expect that compensation orders will often be made in corporate manslaughter cases. The orders are designed for straightforward cases in which the amount of compensation can be readily and easily ascertained. Where someone loses their life, assessing the appropriate level for the compensation order would be relatively complicated. In practice, it might be more appropriate for compensation to be considered in the civil courts, which have the expertise to assess the extent of damages.
I am aware that in Scotland the position is different. Under section 249(4) of the Criminal Procedure (Scotland) Act 1995,
“No compensation order shall be made in respect of...loss suffered in consequence of the death of any person”.
However, I understand that the Scottish Executive are currently considering a report from the Sentencing Commission for Scotland on financial penalties, including compensation orders. As part of thatwork, the Executive will be looking at the effect of section 249. I will draw the comments made during this debate to the attention of the Minister for Justice.
The issue of corporate probation has been raised, particularly the position in Canada. I am very interested in those proposals, and will be considering during debate what lessons can be learned from them and what can be done. I will consider the innovative sanctions to which hon. Members have referred.
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