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That is perhaps a very germane point. If the focus is to be on individual responsibility, we need to be careful about shifting the finger of blame from the organisation to the front-line position.

The report continues:

There were therefore demonstrably a number of serious failings in the way in which the company set about managing the sailing of its ships. But these were not just failures on board. The Sheen report picks up the story:

than the master, the chief officer, the assistant bosun and the senior master. The report continues:

However, in the same circumstances, the judge directed the jury that, as a matter of law, there was no evidence on which they could properly convict the individuals concerned of manslaughter.

Tony Lloyd: There are two points to make. One can be made quite quickly, but it is worth dwelling on. The people who came in for the most blame were, in corporate terms, relatively junior, although the bosun
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and the master are not so junior. They were operating a system that was enshrined by customer practice. It happened to be astonishingly dangerous but, nevertheless, it was enshrined by customer practice, because there was no higher safety case. The other thing that came out in the report was the pressure—one could say for profit, but, in any case, to manage corporate objectives and turn the ships round with no loss of time—was so intense that the safety case was not able to be made relative to those other objectives. That was what went wrong and that was why there was not the safety culture. Those other cultures drove the safety culture out.

Mr. Sutcliffe: I am grateful to my hon. Friend and I agree with what he is saying, but I am trying to explain the accumulation of issues.

Tony Lloyd: I am agreeing.

Mr. Sutcliffe: I am grateful for that. It is good of my hon. Friend to agree with me.

It is important to emphasise the Government’s thoughts in terms of the corporate nature of the offence. A similar situation arose in the Hatfield case. Again, the trial judge, Mr. Justice Mackay, ruled that there was insufficient evidence for prosecutions to be pursued against individuals. However, in sentencing Balfour Beatty for breaches of health and safety legislation, he commented:

Those two examples make a compelling case for saying that it is not enough to rely on individual liability to address corporate failures. There is a need for some wider form of liability for holding companies to account. The Bill addresses that problem by shifting the focus—

Mr. Alistair Carmichael (Orkney and Shetland) (LD): This is a Second Reading speech.

Mr. Sutcliffe: It goes to the heart of what we are trying to achieve. The hon. Gentleman did not have the benefit of being in Committee. It is important to put on the record the driving force behind what we are trying to achieve. The Bill is about shifting the focus of corporate liability away from the acts and omissions of individuals and basing it instead on gross failures in the management and organisation of activities. In future, juries will be able to consider the overall picture of how an organisation’s activities were managed or organised, instead of focusing on the actions of one individual.

Mr. Dismore: I think that my hon. Friend is suggesting that if a case such as the Herald of Free Enterprise were to happen now, a successful prosecution might be more likely. I do not wish to pre-empt a later debate, but has he considered the thrust of my amendment No. 11 on jurisdiction? If the vessel in question was foreign flagged, which is frequently the case, such a prosecution would still not be possible under the Bill.

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6.30 pm

Mr. Sutcliffe: I am grateful to my hon. Friend. If we get the opportunity to discuss amendment No. 11, I shall give him my response.

I am trying to make the important point, albeit laboriously, that the Government’s motivation is to ensure that this is not just about holding individuals to account. Individual criminal liability must rest on the individual conduct or omissions of that person. As the law stands, individuals can be convicted of gross negligence manslaughter, which has a maximum sentence of life imprisonment, if, by their own acts or omissions, they cause a person’s death. The new offence does not alter that. Individuals can also be convicted of a range of health and safety offences, which also carry the possibility of imprisonment for certain offences in very serious cases.

We are interested in widening the range of offences under health and safety legislation for which imprisonment is available, and would offer our support to any hon. Member who was successful in the private Member’s ballot and wished to take that forward. The Department for Work and Pensions has declared its intention to support an opportunity to make section 37 amendments. I hope that the discussions that my hon. Friends the Members for Manchester, Central and for—

Mr. Grieve rose—

Mr. Sutcliffe: I shall give way while I try to remember the constituency of my other hon. Friend.

Mr. Grieve: I want to press the Minister on an important point. It would clearly be possible to prosecute a company for corporate manslaughter and at the same time for breaches of the 1974 Act, and to have a director in the dock for a breach of section 37. However, would the jury be required to deliver separate verdicts? As he will be aware, unless there is a conviction for a breach of the 1974 Act, there cannot be a breach of section 37.

This is a more than academic issue, because in the event of a conviction for corporate manslaughter the judge would not normally ask for a verdict against the company for breaches of the 1974 Act. The matter might require attention. I might be wrong, but I flag it up to the Minister.

Mr. Sutcliffe: I am grateful for that intervention. I was trying to remember the constituency of my hon. Friend the Member for Eccles (Ian Stewart).

The hon. Member for Beaconsfield (Mr. Grieve) makes a pertinent point about taking the offences at the same time. I have some sympathy with it and do not see a problem with what he suggests. He is right on the procedural point. I hope that the House acknowledges my commitment to look at this further to see what we could do procedurally to improve the situation so that we do not get into confusion. I see no problem with things being taken alongside each other.

Ian Stewart: As my hon. Friend was in pre-emptory mode earlier, does he have anything further to say about the list of issues raised by both himself and me?
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Mr. Sutcliffe: I will, I hope, assist my hon. Friend towards the end of my contribution by rounding off my view on each of the new clauses and amendments by stating what we will try to do.

The aim of the group of amendments is to redefine the circumstances in which individuals will be guilty of an offence in the first place, or will be liable to some sanction. In our view, new clause 1 would lower the threshold for convicting a person of an offence of homicide by a very substantial degree, as has been mentioned. Under the proposal an individual could be convicted of corporate manslaughter and sent to prison for a term of up to a life sentence on the grounds of a mere contribution to the corporate offence. The new offence is intended to be set at the high threshold of gross negligence to ensure that it is positioned as a very serious offence. It would be counter to that aim if convictions were available for very low-level offending. It would be odd generally to make it possible for another person to be convicted of the same offence at such a different and lower threshold.

The measure would mean that a person could be guilty of manslaughter on the basis of not gross negligence—or even negligence—but any contribution made. It is hard to see how a senior manager could have failed to have contributed in some way to a serious failure in the way in which his organisation was being run. The proposal runs the risk of creating guilt by association.

New clause 1 would also represent a significant extension of criminal law to allow for imprisonment in such wide circumstances. The House and the other place considered at some length during the passage of the recent Road Safety Act 2006 the proposition that the law should provide for imprisonment on the basis of negligence. We considered that such a measure would be right in those circumstances, but this proposal would go substantially beyond that.

New clause 6 appears to anticipate that objection by providing for a threshold of gross breach and a maximum penalty of six months’ imprisonment. I recognise the genuine efforts of my hon. Friend the Member for Eccles to find ways of extending the law in ways that the Government might be prepared to accept, but a person can already be convicted of manslaughter for the gross breach of their duty of care, and, again, could be liable to a penalty of life imprisonment. I am not convinced that the way in which the new clause is drafted would assist in bringing any new prosecutions.

New clause 4 is an attempt to tackle the problem in a different way by making provision for disqualification. This is an area in which the Government have considered the possibility of further proposals. The law already provides for a director to be disqualified when they are convicted as an individual of certain offences, including health and safety offences.

It is true that there have been relatively few disqualifications linked to health and safety convictions. The Health and Safety Executive has recognised that more could be done to remind courts of their disqualification powers. As I have said, revised guidance was issued to the executive’s inspectors in May, stating:

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Ann McKechin: Will the Minister say what discussions his Department has had with the Scottish Executive on sentencing, particularly in relation to potential individual liability for directors? I mentioned that there is quite a distinction in Scots law and that there is a much different test on the common law offence. Have there been any discussions on that point?

Mr. Sutcliffe: I assure my hon. Friend that discussions have taken place with the Scottish Executive. Indeed, I met the Scottish Minister for Justice to discuss the Bill last week. Discussions are taking place about the likely impact in Scotland, given its different legislation.

Ian Stewart: My hon. Friend will remember that on Second Reading and in Committee we pressed him to do further thinking on disqualifications, for the reasons that he has just stated. Has that further thinking taken place? Has any progress been made?

Mr. Sutcliffe: Thinking always continues, and I hope that further progress will be made. I shall refer to that as I move on in my speech.

Mr. Denham: My hon. Friend has referred to the guidance that was issued earlier this year. Will he clarify something? In order for a director to be disqualified in the way that he has highlighted, would the individual director have to be convicted of an offence, and if so, which offence would that be? Secondly, if the company was being considered, would it fall under health and safety legislation or corporate manslaughter legislation? Does he accept that for many of the relatives of victims the fact that somebody is disqualified as a consequence of the company being convicted of corporate manslaughter is key to illustrating that justice is being done? It might be possible to find a roundabout, back-door route that would lead to disqualification, but that would not be the same.

Mr. Sutcliffe: I accept what my right hon. Friend is saying, and hope to touch on that point. The thinking is being developed. I had an opportunity in my previous role in the Department of Trade and Industry to examine the Company Law Reform Bill, as was. We could have put a view about directors’ responsibilities and reasonableness, and of what is expected of a director, in that Bill—the health and safety connection could have been made. My right hon. Friend will know that the route through the DTI is one whereby directors are disqualified on a regular basis for breaches of appropriateness in their operation of individual companies.

On 13 October at Croydon Crown court, Christopher O’Mahoney was disqualified from being a director of a limited company for two years under the Company Directors Disqualification Act 1986, following a conviction for gas health and safety offences. An offence must occur before a disqualification kicks in, but to respond
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to the point raised by my hon. Friend the Member for Eccles, who is not in his place at the moment, we continue to consider issues relating to disqualification, which is a subject that I want to pursue during the lifetime of the Bill.

As I have tried to explain, the scope for disqualification exists, and it is based on a test of individual liability, but we have identified no practical options for new proposals in the context of corporate manslaughter. We certainly do not think that it would be possible to disqualify an individual in the way proposed under the new clause. Under the new offence, a prosecution would be brought against the relevant company, and not specific individuals. In those circumstances, it would not be legitimate or practical for the sanctions to include disqualification, as the individuals concerned would not be party to the proceedings, and so would not have had the opportunity to defend themselves.

My hon. Friend the Member for Glasgow, North (Ann McKechin), quoted the often repeated argument that it is not organisations, but people, who do things. I understand that point, but it does not follow that organisational failure can be pinned on senior individuals. If that were true, there would be no need for the Bill, as the existing law on corporate manslaughter would work. The reason why it does not work, as the Health and Safety Executive told the scrutiny Committees, is that the majority of incidents dealt with by the HSE arise from systemic failures, rather than the actions of individuals. The new offence reflects that reality.

For similar reasons, we do not accept that there should be secondary liability under the new offence, as is proposed in the amendments. As I argued in Committee, and as the Law Commission suggested in its original report, if a person satisfies the tests for secondary liability, it is likely that an individual charge of manslaughter would be possible. The Law Commission said:

Tony Lloyd: I am trying to give my hon. Friend a cheerful hearing, but he puzzles me a little. Earlier, he very sensibly read on to the record a description of what happened in the case of the Herald of Free Enterprise. I accept that, in that case, there is the issue of extra-territoriality to consider, as my hon. Friend the Member for Hendon (Mr. Dismore) said, but let us go beyond that. Under the Bill, the company would almost certainly have been brought before the courts, but there is almost no case for thinking that any individual would have been, even though the controlling minds failed to establish the health and safety regime that we wanted. Arguably, the Bill would not have been enough to enable us to say to those controlling minds, “Get on with it, and make sure that a health and safety regime is put in place.” That, for many of us, is really the dilemma posed in what the Minister says.

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