| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Cutting through to the commonsense approach suggested the other day by the noble Lord, Lord James, we are saying to company directors that they have to assess the concept of a relevant duty of care that has been built up over centuries, and they will have to get out Salmond’s Law of Torts to study what those relevant duties of care should be. The simple question of why a gross breach of a statutory duty
15 Jan 2007 : Column GC177
4 pm
A noble Lord: The noble Lord cannot speak.
The Deputy Chairman of Committees: We are in Committee and Members of the Committee can speak until the amendment is withdrawn. I have not yet sought the leave of the Committee to have it withdrawn, so if the noble Lord wishes to add something, he is entitled to do so.
Lord James of Blackheath: I was going to say that the Minister made a passing reference to a very important point raised by the noble Lord, Lord Wedderburn, on the first day of Committee last week, which he cast like a fly over the water but no fish bit. It was a very important point that should be borne in mind. Both the Minister today and the noble Lord, Lord Wedderburn, made reference to the fiduciary responsibility within a board, but, if I heard them correctly, they presented it as though it were a means by which there should be a duty of care in respect of fiduciary responsibility.
I should like to reverse the point for Members of the Committee. I believe that in this case, and many others, fiduciary responsibility will be fielded by boards as a mitigation and justification for committing manslaughter. Perhaps I may put a real case to the Committee—it is case C among my examples. We were diving in the Torres Strait between Port Darwin and Papua New Guinea and the wind was so bad that we could not complete a contract by midnight, without which a £3 million penalty would be imposed on me, which I could not pay. I had a fiduciary responsibility to my shareholders not to incur a £3 million penalty, so I dived on and killed a diver. My justification for that would be that I could not bankrupt the company for £3 million and so I had to carry on diving and hope that the risk did not materialise. It did.
That is the reverse of the point that I think was raised by the noble Lord, Lord Wedderburn, and the Minister. By the way, I am not pleading guilty to murder because there were other justifications in that case which would cause an unnecessary complication at the moment. However, I think that the issue of fiduciary responsibility will be hugely important as a potential mitigating factor in many boards’ defence, and it needs to be borne in mind as we go forward.
Lord Wedderburn of Charlton: I think that the noble Lord’s request to withdraw the amendment should be accepted by the Committee.
15 Jan 2007 : Column GC178
The Deputy Chairman of Committees: Does the noble Lord wish to withdraw the amendment?
Lord Razzall: With regret, yes, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees: In calling the next amendment, I draw the Committee’s attention to the fact that, if it were agreed, I would not be able to call Amendments Nos. 24 to 27 because of pre-emption.
Lord Razzall moved Amendment No. 23:
Clause 2, page 2, leave out lines 17 to 29 and insert “duties owed by it under the law of negligence to any person”
The noble Lord said: This is a straightforward amendment for which I am grateful for the advice given to me by the Association of Personal Injury Lawyers. The substance of the amendment is that the “relevant duty of care” provision—and again we come back to that concept as enshrined in common law over the centuries—as specified in Clause 2(1) is too narrow and will inevitably lead to some deaths caused by negligence being exempted from the scope of the proposals. Therefore, the substance of the amendment is that a company should owe a general duty of care to anyone whom it kills negligently, regardless of whether they are in one of the groups specified in the Bill. The listing of various categories of duties in paragraph (c) will inevitably prove limiting, as it is not possible to create an all-encompassing list. As drafted, it will automatically exclude other categories of death, which would lead inevitably to some victims’ families being denied justice. The amendment is straightforward and would widen the extent of the relevant duty of care simply to any of the duties owed by the company under the law of negligence to any person. I beg to move.
Lord Hunt of Wirral: One theme that has run through the contributions that have been made in Committee is the importance of getting the balance right in this legislation, so that it is even-handed and so that the measures are seen to be fair and just, as well as simple and easy to understand. I hope that the Minister will be able to reassure us on this. I would be grateful if, in doing so, he could bear in mind the case that was raised by my noble friend Lord James, which he did not have the opportunity to answer in the previous debate. It is as relevant in this debate, so I hope that the Minister can respond to that point about practical circumstances, as it is in everybody’s interest that we get not only a fair and just law but one that everybody can understand in its application right across the board. We shall debate later the need for even-handedness between the public and private sectors, but the noble Lord, Lord Razzall, has done us all a service by simplifying everything and removing all these different examples to insert the words,
We will shortly debate the question of members of the public, but in the mean time it would be helpful to have the Minister’s response.
15 Jan 2007 : Column GC179
Lord Bassam of Brighton: If the Committee will indulge us, we will give some further thought to the points raised by the noble Lord, Lord James.
I shall respond to the amendment moved by the noble Lord, Lord Razzall. The previous group dealt with the requirement that a relevant duty of care for the new offence be owed in the law of negligence. Amendment No. 23 in essence goes to the requirement that the duty of care falls into one of a number of categories of duty. It might be useful if I explained why we have chosen to provide categories of duty in the first place.
We would expect the question of whether an organisation owed a duty of care or not generally to be straightforward. For example, it will take little to establish that an individual was employed by a company and therefore was owed a duty of care; similarly, there is no argument that rail passengers are owed a duty of care by rail companies. So those relationships should be fairly straightforward. The duty of care in the law of negligence proceeds on the basis of established circumstances in which a duty of care applies, with general tests being applied if a case does not involve a relationship where a duty is already clearly established. These tests are based on the proximity of the relationship between the parties, the foreseeability of damage and considerations of whether it is just, fair and reasonable to impose a duty. We accept that the duty of care is a developing area of the law, especially in relation to the liability of bodies carrying out public functions. This affects not just Crown bodies, but all bodies in the wider public sector.
Given the seriousness of the offence, we think that there is merit in setting out more clearly where the offence will apply by marking out the types of activities that the offence is intended to cover. That will give certainty to organisations and the public about which situations are covered by the offence and will be of great benefit to investigators, as, in some cases, it will allow decisions to be taken early without considering detailed questions about the duty of care.
The categories cover three types of duty: duties owed to those working in or for an organisation or company; duties owed in respect of the workplace; and duties owed in respect of a company’s activities. Categories relating to those working in or for an organisation and relating to the state of premises occupied by an organisation are largely straightforward and deal with a key aspect of the scope of the offence, which is the employer’s duty to ensure the health and safety of employees and the safe condition of work premises. In some jurisdictions, that is the extent of industrial manslaughter laws. However, we consider it right to go further and to cover duties owed to members of the public. The third category, covered by Clause 2(1)(c), is thus intended to cover other circumstances where organisations commonly owe duties to members of the public.
I shall not explore that category in depth at this stage because amendments have been tabled that will allow us to consider it in more detail. However, I make the point that the primary purpose of these categories is not to make substantive exclusions to the Bill. It is undoubtedly right that there will be certain activities
15 Jan 2007 : Column GC180
The principle that lies behind providing a list of categories is to provide a more readily accessible offence, the application of which can be resolved in many circumstances without detailed resort to the law of negligence. We think that that is a sensible aim. I hope that, having heard that explanation, the noble Lord will feel able to withdraw his amendment.
The noble Lord, Lord Hunt, asked me to make some observations on the comments made by the noble Lord, Lord James, on the earlier amendment. Those working in an organisation will have a range of duties, some of which may overlap or appear to conflict, but we do not accept that a duty to maximise returns for a company and its shareholders provides a basis for not operating safely. That is an absolute duty, and an organisation can be convicted of a criminal offence, for example, in respect of breach of health and safety obligations. That provides an overriding framework within which other duties, such as the fiduciary obligations of directors, operate. I think that that answers the noble Lord’s point, but the point itself is important and a key consideration for the company involved.
4.15 pm
Lord James of Blackheath: The Minister has answered the point with such clarity that I can only ask that a similar clarity be conveyed in the Bill so that all may understand it equally.
Lord Bassam of Brighton: There is clarity in the Bill.
Lord Lyell of Markyate: I think that we are getting there; the Minister will probably tell me that he is going to give us a fuller answer when we debate a later amendment. We are still trying to tease out why, if public authorities engage in all the activities that are mentioned in Clause 2(1)(c), they will not be liable where all other bodies will be. That is an important gap; if the Minister would like to answer the point now, it would be delightful, but if he tells me that he will answer it soon, that will be adequate.
Lord Bassam of Brighton: We will come to that range of issues.
Lord Razzall: I, too, will read with interest what the Minister has said. The noble Lord, Lord James, is trying, quite effectively, to articulate what noble
15 Jan 2007 : Column GC181
Amendment, by leave, withdrawn.
Lord Hunt of Wirral moved Amendment No. 24:
“(aa) a duty to members of the public who may be affected by the way in which the persons referred to in paragraph (a) perform their duties;”The noble Lord said: In view of those latter comments, I once again remind the Committee that I am a practising solicitor—
Lord Razzall: I included you in the magnificent six.
Lord Hunt of Wirral: I am also a partner in Beachcroft LLP and am as committed as the noble Lord, Lord Razzall, is to preventing this Bill being a lawyers’ paradise.
Amendment No. 24 would widen the application of the duty of care to apply to members of the public. The noble Lord, Lord Wedderburn, referred to this earlier in our deliberations today. Amendment No. 25 would insert the words “or provision” so that the duties of care owed under the law of negligence would apply when an organisation is supplying or providing the services. The two amendments are tied; Amendment No. 24 would ensure a direct application of the duty of care to members of the public, while Amendment No. 25 would ensure that where public authorities have contact with members of the public—for example, but not exclusively, in providing public services—they would have a duty of care towards the public.
As I understand it, Ministers and the Home Office have so far deliberately omitted the word “provision” from the Bill. The Minister in another place said,
- “the term ‘providing’ covers a potentially wider range of activity and could include many situations in which no duty of care is owed. For example, it would extend to circumstances in which a service was provided to the public at large, such as when local authorities were working to cut crime. No duty of care is owed in that respect, nor is the activity being supplied.—[Official Report, Commons Standing Committee B, 24/10/06; col. 96.]
That sounds a reasonable argument, but my point is much more general. I see no reason why the duty should not apply to the public at large. It is surprising that the Government would argue that public authorities have anything other than a full duty of care towards the public. I know that many outside this place feel that this is just another example of how
15 Jan 2007 : Column GC182
I am particularly concerned about the way in which Clause 2 acts—my noble and learned friend, Lord Lyell, has been probing this—indirectly as a wide-ranging exemption from liability. If it is decided that exemptions are appropriate, these should be clearly stated in the Bill, just as they are in Clauses 4 to 7, on which we shall be deliberating later. They should not be hidden away in obscure and legalistic questions of whether the words “provision” and “supply” appear in a definition of “relevant duty of care”. I agree with the noble Lord, Lord Razzall, in that respect.
I hope that the Minister will give us a fuller explanation of why we have differing levels of exemption. If we want a simple and even-handed law, this is moving in the wrong direction, unless the noble Lord can persuade us otherwise. I beg to move.
Lord Lyell of Markyate: I think that we are getting there, and I am looking forward to hearing the answer. It is clear that the reason why Clause 2(1) of the Bill is divided into paragraphs (a), (b) and (c) is so you can fill out everything except (a) and (b) as far as public authorities are concerned, but the Minister will no doubt explain that. He will appreciate that many of us in the Committee are not happy about it.
Lord Bassam of Brighton: In our previous debate, we considered the general proposal to set out certain categories of relevant duty of care, and I explained that the intention was primarily to provide a way of establishing whether a particular set of circumstances was within the scope of the offence without detailed recourse to the law of negligence.
Amendment No. 24 proposes an additional category of relevant duty—duties owed to members of the public who might be affected by the way in which employees or others working for an organisation perform their duties. The language used here reflects the way in which general statutory health and safety duties are drafted. Section 3 of the Health and Safety at Work etc. Act, for example, imposes a duty on employers to take all reasonable steps to ensure the health and safety of those not in his employment who may be affected by the conduct of his undertaking. I set out in an earlier debate why we did not think it suitable to base the offence on those duties as such. I appreciate that this amendment also probes the extent to which public authorities are covered by the offence in respect of duties that they owe to members of the public. Amendment No. 25 probes the difference between the “supply” and “provision” of a service.
Perhaps I can start with the question of the public sector. Concern has been raised in our debates that Clause 2 might not be adequate to extend the offence to duties owed by public authorities to members of
15 Jan 2007 : Column GC183
I can offer reassurance that the term certainly does not provide blanket cover for the activities of the public sector. In the first instance, the exemption covers activities that are carried out under the prerogative. That includes activities that are at the heart of state responsibility such as concluding treaties, conducting diplomacy and deploying troops overseas, or maintaining the peace in the United Kingdom. The exemption extends also to activities that by their nature require statutory authority. This does not exclude an activity simply because it is carried out on a statutory basis. The nature of the activity must mean that it can be carried out only with such authority. For example, the NHS provides medical services under a statutory framework, but medical treatment is not an exclusively public function. There is nothing intrinsic about medical treatment that requires statutory powers, and private organisations offer medical treatment independently. Examples of functions that are by their nature exclusively public would be the licensing of drugs, the issuing of driving licences and, at a local level, the granting of planning permissions.
This exemption does not cover an activity simply because performing it requires a licence. Selling alcohol requires a licence, but that does not make it an exclusively public function, because the nature of the activity—selling—does not require statutory powers. The phrase “by its nature” is intended to focus the test on the core part of the activity which is the public function. To put the test another way, can a private individual engage in this sort of activity without the use of statutory powers? Moreover, the exemption does not extend to activities that are ancillary to that function. While the keeping of people in custody is an intrinsically public function, secondary activities such as prison catering functions are not exclusively public functions and so would be within scope for the offence whenever duties of care arose.
How might the amendments alter the scope of the categories of duty? To understand why we prefer the categories as they stand, it might be helpful to explain what they are intended to cover. The Bill’s intention is to list circumstances in which duties of care will commonly arise. Thus, the categories cover the supply of goods and services, construction and maintenance operations, commercial activities and the use of vehicles, plant and equipment. The term “supply” is used deliberately. It is intended to cover the relationship between companies and their customers or those receiving their services. For example, train companies supply a transport service to their
15 Jan 2007 : Column GC184
The effect of the amendments would not be to underpin the offence with wider duties per se. The requirement would remain that a duty be owed in the law of negligence. The effect rather would be to capture a wider group of members of the public who are owed a common-law duty where that duty is not covered by one of the existing categories.
However, new categories would cover a potentially wider range of activity and could include many situations where no duty of care is owed. The noble Lord, Lord Hunt, made reference to one example, but they could also extend to the work of local authority staff in cutting crime. Other examples might be the way in which the police respond to a 999 call, or statutory inspectors enforce a regulation. However, it is highly unlikely that duties of care would be owed in these sorts of circumstances—a point that, to judge from his earlier comments, the noble Lord, Lord Hunt, would accept.
| Next Section | Back to Table of Contents | Lords Hansard Home Page |