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Corporate responsibility for industrial incidents This item contains selected online content. It is for use alongside, not as a replacement for the module website, which is the primary study format and contains activities and resources that cannot be replicated in the printed versions.
About this free course This free course is an adapted extract from the Open University course W822 Business, human rights law and corporate social responsibility: www.open.ac.uk/postgraduate/modules/w822. This version of the content may include video, images and interactive content that may not be optimised for your device. You can experience this free course as it was originally designed on OpenLearn, the home of free learning from The Open University – www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-sec- tion-0 There you’ll also be able to track your progress via your activity record, which you can use to demonstrate your learning. Copyright © 2018 The Open University Intellectual property Unless otherwise stated, this resource is released under the terms of the Creative Commons Licence v4.0 http://creativecommons.org/licenses/by-nc-sa/4.0/deed.en_GB. Within that The Open University interprets this licence in the following way: www.open.edu/openlearn/about-openlearn/frequently-asked-questions-on-openlearn. Copyright and rights falling outside the terms of the Creative Commons Licence are retained or controlled by The Open University. Please read the full text before using any of the content. We believe the primary barrier to accessing high-quality educational experiences is cost, which is why we aim to publish as much free content as possible under an open licence. If it proves difficult to release content under our preferred Creative Commons licence (e.g. because we can’t afford or gain the clearances or find suitable alternatives), we will still release the materials for free under a personal end- user licence. This is because the learning experience will always be the same high quality offering and that should always be seen as positive – even if at times the licensing is different to Creative Commons. When using the content you must attribute us (The Open University) (the OU) and any identified author in accordance with the terms of the Creative Commons Licence. The Acknowledgements section is used to list, amongst other things, third party (Proprietary), licensed content which is not subject to Creative Commons licensing. Proprietary content must be used (retained) intact and in context to the content at all times. The Acknowledgements section is also used to bring to your attention any other Special Restrictions which may apply to the content. For example there may be times when the Creative Commons Non- Commercial Sharealike licence does not apply to any of the content even if owned by us (The Open University). In these instances, unless stated otherwise, the content may be used for personal and non- commercial use. We have also identified as Proprietary other material included in the content which is not subject to Creative Commons Licence. These are OU logos, trading names and may extend to certain photographic and video images and sound recordings and any other material as may be brought to your attention. Unauthorised use of any of the content may constitute a breach of the terms and conditions and/or intellectual property laws. We reserve the right to alter, amend or bring to an end any terms and conditions provided here without notice. All rights falling outside the terms of the Creative Commons licence are retained or controlled by The Open University. Head of Intellectual Property, The Open University 2 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
Contents
Introduction 4
Learning Outcomes 5
1 Workplace incidents in the UK 6
2 A historical perspective: The development of business accountability
from the nineteenth century 8
2.1 Economic and political doctrine of laissez-faire 8
2.2 Development of employment law and employers' liability 9
2.3 Development of employers' duty of care 11
2.4 Imposition of vicarious liability 11
2.5 Statutory health and safety regime – a summary 12
3 Corporate manslaughter 14
3.1 Common law gross negligence manslaughter 14
3.2 The history of corporate manslaughter prosecutions in the UK 16
3.3 Corporate Manslaughter and Corporate Homicide Act 2007 18
4 Corporate responsibility in an international context 21
4.1 Comparative examples of legislating to prevent corporate killings 21
4.2 The impact of globalisation on corporate accountability for industrial
incidents 22
4.3 The application of international law and human rights principles to industrial
incidents 22
4.4 The role of CSR in this context 23
5 Case Study: Bhopal 25
5.1 Background to Bhopal 25
5.2 The incident and its consequences 26
5.3 Safety issues at the plant 28
5.4 The people affected by the Bhopal incident 29
5.5 Environmental damage from the Bhopal plant 31
5.6 Corporate responsibility for the Bhopal plant 32
5.7 The immediate responses to the gas leak at Bhopal 33
5.8 Legal accountability for the Bhopal gas leak 34
5.9 Liability for the contamination at Bhopal 37
5.10 What is there to prevent another Bhopal? 38
Conclusion 40
References 40
Acknowledgements 41
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Introduction Introduction Commercial activity has the potential to cause harm to those involved in the production and delivery process. Ensuring the health and safety of the workforce is an intrinsic part of responsible business practice and is an area that has long been subject to legal regulation in developed countries. At present, the issue of corporate responsibility for industrial incidents is a matter which is almost exclusively dealt with at the national level and so the legal protections available can vary greatly from country to country. International controls are few, although there is a growing impetus to ensure that the regulatory net is cast more widely at the international level. (An example is the 1992 Convention on the Transboundary Effects of Industrial Accidents, which was designed to protect people and the environment from the effects of industrial accidents.) Section 1 of this course will consider workplace incidents in the United Kingdom. Section 2 of this course will outline the development of civil liability for workplace incidents in the UK. In Section 3 you will focus on the efforts to pursue criminal accountability for industrial deaths in the UK in the form of the offence of ‘corporate manslaughter’. Such an Anglo- centric focus is of value, as the UK was the first nation to become industrialised and so was first faced with these issues some 150 years ago. The UK’s history reveals the evolution of legal accountability (both civil and criminal) for industrial incidents and highlights issues commonly encountered in imposing legal liability in this area. Many of the principles developed have subsequently been adopted and improved upon by other nations around the world. However, corporate accountability for workplace incidents still remains undeveloped and ignored in some developing nations, making them attractive for commercial exploitation by multinational enterprises (MNEs). The UK’s experience provides a good starting point with which to benchmark the nature and adequacy of the legal protections offered in other nations. In Section 4 the focus will broaden to encompass the international context. You will consider the interrelationship of the development of legal controls on business with international and human rights principles and with emerging corporate social responsi- bility (CSR) policies. Section 5 then uses the Bhopal case study to shed light on a more global view of the issue of legal accountability for industrial incidents. This OpenLearn course is an adapted extract from the Open University course W822 Business, human rights law and corporate social responsibility. 4 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
Learning Outcomes
After studying this course, you should be able to:
● explain the development of civil liability for the physical harm caused to workers by business activity and outline
the health and safety regime in the UK
● explain the basics of legal accountability in the English legal system, as achieved by way of prosecutions using
the Corporate Manslaughter and Corporate Homicide Act 2007 (‘the 2007 Act’) and give a reasoned view as to
whether the 2007 Act is likely to significantly improve the CSR of businesses across industry sectors with UK-
based management
● distinguish between the approaches taken to corporate manslaughter in different jurisdictions
● undertake independent learning and research to evaluate and interrogate a case study
● explain the development of principles of international and human rights law that have relevance to safe working
practices and the role of CSR policies in this context.1 Workplace incidents in the UK
1 Workplace incidents in the UK
In his essay, 'Violent corporate crime, corporate social responsibility and human rights',
Slapper (2011) outlines some of the causes and effects of ‘industrial accidents’. He
explores the spectrum of the human cost of injuries inflicted at work. They include
temporary and permanent disabilities, maiming or death. The ramifications of ‘industrial
accidents’ that result in the death of employees or other workers reach beyond the
anonymity of workplace accident statistics. Each fatality caused by an ‘industrial accident’
reflects the end of a life:
Every year more than 200 employees are killed in work-related incidents. The
loss of a breadwinner, a mum, a dad, a spouse or a much-loved brother or
sister can have a devastating emotional and financial impact.
(Eagle, cited by the Ministry of Justice, 2008)
Activity 1
In the UK, the Health and Safety Executive (HSE) produces statistics for the types and
numbers of workplace-related injuries and fatalities in each year. Go to
the HSE's website and find this year’s HSE statistics report. Those of you who are
studying from another country may also wish to look for the health and safety data for
your country as well.
When considering these statistics, you need to look at the range of workplace injuries
that are covered and note down how many fatal injuries occurred in the year of the
report that you have accessed.
Comment
Hopefully you found the HSE’s report helped to inform you about the nature and extent
of the issue in the UK. In terms of fatalities you will see that a distinction is made
between deaths caused by work-related diseases and those that have occurred
through some catastrophic accident. In the case of the former, those caused by effects
of exposure to asbestos are highlighted. In the case of the latter, the 2009–10 statistics
record 152 deaths, representing 0.5 fatalities per 100,000 workers. It also records that
80 of these deaths were in the construction and agricultural sectors.
Those of you studying from another country may find it interesting to compare these
figures with those of your own country.
The traditional term ‘industrial accident’ can be misleading, as it implies that it is an
unavoidable and inherent part of industrial activity, and it fails to distinguish those
incidents that could have been avoided by better working practices. For this reason, it is
now common policy among police and investigative teams to refer to an event in which
damage has resulted, but the cause of which is not yet known, as an ‘incident’ or
‘occurrence’, as this provides a neutral, non-judgmental description of the event. (The
Department for Transport hosts a number of policy documents on use of language in such
instances.)
6 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 20211 Workplace incidents in the UK Activity 2 Read Reading 1: extracts from Slapper (2000), ‘Blood in the bank: social and legal aspects of death at work’. Then outline how common social perceptions have affected the way in which deaths in the workplace are treated. Click here to access Reading 1 Comment The issue of deaths at work reveals the ambivalent attitude of society to corporate criminality more generally. The fact that they have been labelled as ‘accidents’ by those responsible for investigating them reflects the assumption made by society at large that criminality is not involved in workplace processes. The author points to the commonly held view that as commercial activity has a social value the risk taken by a business organisation is likely to be justifiable and so should not be labelled as ‘criminal’, a term more traditionally given to gratuitously anti-social behaviour. 7 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
2 A historical perspective: The development of business accountability from the nineteenth century
2 A historical perspective: The
development of business accountability
from the nineteenth century
The nineteenth century is a good starting point for studying into the development of
business accountability. The industrial revolution was at its height, during which time
hundreds of thousands of people died in incidents in mines, mills and on the railways.
Businesses tended not to value the safety of their workers. In her novel The Mill on the
Floss, George Eliot captured how extensively industrial production pervaded Victorian
community life:
good society, floated on gossamer wings of light irony, is of very expensive
production; requiring nothing less than a wide and arduous national life
condensed in unfragrant, deafening factories, cramping itself in mines,
sweating at furnaces, grinding, hammering, weaving under more or less
oppression of carbonic acid.
(Eliot, 2008 [1860])
Figure 1 A typical English mill town
This vivid portrait Eliot depicts of ‘deafening factories’, ‘cramped’ mines and ‘oppressive’
fumes needs to be placed in the context of life at that time: infant mortality was high and
life expectancy was short. It was still generally assumed that life for the working classes
would be what the seventeenth-century moral philosopher Thomas Hobbes described as
‘nasty, brutish and short’. There were notable exceptions to this rule and some
industrialists such as the Cadbury brothers went to great lengths to improve conditions for
their workers.
2.1 Economic and political doctrine of laissez-faire
The economic and political doctrine of laissez-faire prevailed and characterised the
popular rhetoric in government and among other institutions in the UK. ‘Laissez faire’
8 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 20212 A historical perspective: The development of business accountability from the nineteenth century originates from the French and translates literally as ‘allow to do’. However, it has since taken on particular meanings. In the first sense, the Oxford English Dictionary (2009) defines ‘laissez-faire’ as meaning ‘the policy of leaving things to take their own course; without interfering’. In the second dictionary sense, it has a meaning germane to economics: ‘abstention by governments from interfering in the workings of the free market’. The legal legacy of the laissez-faire doctrine can still be seen in the development of English contract law, in particular, in the contractual doctrine of caveat emptor (let the buyer beware) and also the assumption that contractual parties have equal bargaining power. 2.2 Development of employment law and employers' liability The rigor and potential harshness of laissez-faire can be seen in the early development of employment law, with its emphasis on the obedience of the ‘servant’ to the orders of the ‘master’ and the absence of job security for the servant. The assumption is that the worker can choose to leave and find another job if he or she wishes. 2.2.1 Doctrine of common employment The influence of laissez-faire can also be seen in the way in which legal responsibility for workplace incidents developed during the course of the nineteenth century. The much reviled doctrine of ‘common employment’, deriving from the judgment of Lord Abinger in Priestley v Fowler [1837] 3 M & W, ensured that employers were not liable for the personal injuries of their workers when caused by the negligence of another worker. In Priestley v Fowler a coachman employed by the defendant overloaded a carriage making deliveries, causing it to overturn and injure the claimant, another employee who was riding on the carriage. In this case, the employer had no means of knowing about his worker’s negligent actions. The judicial fear was that the imposition of liability on employers in such circumstances would lead to a proliferation of similar claims, a resultant loss of control by employers and an increased cost of production, which would, in turn, adversely affect economic growth. Implicit in the doctrine of common employment was the assumption that when workers contract to work they know, or ought to know, what risks they are exposing themselves to. This was taken to include the knowledge that the want of care on the part of a fellow worker may be injurious or fatal and an acceptance that it is a risk which an employer cannot be expected to offer protection from (Alderson, B. in Hutchinson v York, Newcastle and Berwick RY [1850]). This judicial approach was reflected in the fact that up until the late nineteenth century employers could raise the defence of consent (known as volenti non fit injuria – a person who consents to the risk of harm from an activity cannot then make a claim for compensation for personal injuries and damage that result from that activity) to claims brought by workers injured as a result of negligence in the workplace. In addition, workers who were found to be contributory negligent in failing to have sufficient regard to their own safety even in a small way were denied any compensation from their employer. There was little or no recognition of the economic reality that in most cases workers have no practical alternative but to continue to work and to subject themselves to the risk of unsafe workplace practices. Thus, employers were effectively immune from 9 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
2 A historical perspective: The development of business accountability from the nineteenth century
liability for industrial incidents and there was little or no incentive for employers to develop
safe industrial practices.
2.2.2 Nineteenth century reforms
The issue of working conditions for the new industrial populations was eventually brought
to public attention by a number of nineteenth-century philanthropists and socially active
novelists such as George Eliot (1819–1880) and her contemporary, Elizabeth Gaskell
(1810–1865). Gaskell, the author of North and South (2003 [1855]), was a social
progressive and liberalist whose fiction was based on her own observations and social
investigations in her home community of Manchester. She recognised that the comforts of
middle-class existence depended on processes that routinely exposed the working
classes to maiming, deprivation and insecurity.
The mid to late nineteenth century saw a plethora of new legislation designed to improve
working conditions, such as the various Factory Acts and also Acts designed to regulate
working conditions in shops, offices and railway premises. Many of these provisions have
now been consolidated and updated into a comprehensive statutory framework under the
Health and Safety at Work etc. Act 1974 (HASAWA).
The protected position of employers was slowly eroded during the later part of the
nineteenth century as judicial opinion veered more in favour of the worker. The impact of
the doctrine of common employment was reduced by the Employer’s Liability Act of 1880
under which employers were held responsible for negligent acts of their managers,
superintendents and foremen that resulted in harm to their workers. In 1891, the House of
Lords determined that a worker’s consent could not be inferred from their awareness of
the risk of harm they may suffer as a result of their employer’s negligence.
Case Study: Smith v Baker & Sons [1891] AC 325
Mr Smith worked for Baker & Sons as a navvy on the railways. While
constructing a railway line through a cutting he worked on the ground while a
crane often jibbed heavy stones over his head. Both he and his employers were
aware of the risk of a stone falling, but no warning was given to him when the
crane jibbed. As Mr Smith’s job entailed breaking up the ground he had little
opportunity to look up himself in order to take evasive action. Eventually, a
stone fell from the crane and injured him. The House of Lords held that Mr
Smith’s awareness of the risk he was taking should not be regarded as consent
to his employer’s negligence.
In his judgment, Lord Herschell distinguished between two different situations.
The first is where a worker consents to undertake an inherently dangerous task
and all reasonable care has been taken to render it as safe as possible. The
example given was that of a sailor whose job is to climb the rigging of the ship.
He knows and appreciates that there is an unavoidable risk in the task he is
undertaking and if he is injured no liability arises as the employer has not been
negligent. The second situation differs, as an avoidable risk has been created
or enhanced by the negligence of the employer. Mr Smith’s case fell into this
category, as a warning could have been given to ensure that Mr Smith was not
at risk. In these types of cases, an employer cannot claim that the worker’s
continued employment implies his or her consent to that risk.
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Implicit in this judgment is the recognition that workers rarely have an equal bargaining
position with their employers. They are often forced by economic necessity to accept less
than ideal working conditions and it is wrong for employers to exploit that vulnerability.
This change of judicial attitude is reflected in the fact that during the same period the
courts were also developing and refining the principle that employers owe a duty of care
to their workers.
2.3 Development of employers' duty of care
Lord Wright stated in Wilsons and Clyde Coal Co v English [1938] AC 57 that an employer
was under a duty to take reasonable care for the safety of his men. It was convenient to
divide it up threefold, with the obligation to take reasonable care to provide:
● a competent staff
● adequate material
● a proper system and effective supervision.
Lord Wright stressed that these were ‘fundamental obligations of a contract of
employment ... for which employers are absolutely responsible’. As such, these duties are
not able to be delegated to others and so cannot be avoided by employers.
These duties have been developed and refined by subsequent case law. In particular, it
now also encompasses the duty to provide a safe place of work and has been extended
beyond protection from physical harm in the workplace to embrace the protection of the
employee’s mental well-being, too.
2.4 Imposition of vicarious liability
The protection provided was further enhanced by the development of the principle that
employers are liable for the negligent acts of their employees. The imposition of this form
of vicarious liability is significant, as the employer may not be aware of the employee’s
negligent act or omission, but will still be held legally responsible for the harm caused. In
effect, this imposes a form of strict or no-fault liability on employers.
There are several moral and practical rationales for the imposition of vicarious liability in
this context:
● Employees are engaged in the activities on behalf of their employers, who stand to
make a profit and so should take moral and legal responsibility for the consequences
of these activities.
● Negligent employees are unlikely to be financially able to meet the costs of
compensation. Employers are in a better position to insure for the loss (often referred
to as the ‘deep pocket’ justification). In the UK and in other developed countries
public liability insurance is compulsory, ensuring that victims are more likely to
receive compensation for their loss. The cost of insuring against liability can be
incorporated in the costs of production and so be redistributed among consumers of
the product or service.
● The imposition of liability encourages good working practices and ensures that
employers have a financial interest in encouraging health and safety in their working
practices.
11 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 20212 A historical perspective: The development of business accountability from the nineteenth century As vicarious liability is potentially onerous, its imposition has been well circumscribed by the courts. It applies only to employees who are employed under a contract of employment. This excludes independent contractors and – probably more significantly – it excludes liability for the acts of casual workers not employed under a contract of employment. In addition, proof that the employee was acting ‘in the course of employment’ is a vital element in attributing liability to the employer. This has been interpreted to include acts which although unauthorised are within the scope of the employee’s employment. So, for instance, a bus company will be vicariously liable for the physical harm caused when their employee bus driver crashes the bus while driving too fast, even if the bus company has imposed an express prohibition on speeding. The judicial view has traditionally been that the bus driver is undertaking the task that he or she was employed to do, even if they then carry it out in an unauthorised manner (Limpus v London General Omnibus Co [1862] Ex Ch). In recent years, this approach has been extended by the courts and employers have been held vicariously liable for the crimes committed by employees where they have a ‘close connection’ to the job undertaken by the employee (Lister v Hesley Hall Ltd [2001] UKHL 22). The Court of Appeal extended the approach in Lister in Mattis v Pollock (trading as Flamingos Nightclub) [2003] 1 WLR 2158. A nightclub owner was held vicariously liable for acts of violence by a doorman employee. The Court of Appeal held that a ‘broad’ approach was required in assessing whether the acts of an employee were sufficiently connected with the duties of his employment so as to justify imposing vicarious liability. A broad approach has also been adopted by employment tribunals to the issue of vicarious liability in cases of sexual and racial harassment in the workplace. As a consequence, employers have been found vicariously liable for the violent acts and racial and sexual abuse of employees committed while at work. You may find this difficult to justify, but arguably it serves to ensure that employers are careful to recruit employees who are trustworthy and that they have adequate systems of supervision and control in place. 2.5 Statutory health and safety regime – a summary Most developed nations now have statutory schemes which regulate health and safety in the workplace. As mentioned in Section 2.2.2, in the UK this takes the form of the HASAWA, which creates a comprehensive framework of controls. Figure 2 A health and safety sign A detailed knowledge of the scheme is beyond the scope of this course, but it is worth noting that the types of liability imposed on businesses take the form of both criminal and civil liability and that certain regulatory offences impose strict liability. The HASAWA imposes a statutory duty on employers to ensure that the workplace is safe. The duties are wide-ranging and they cover methods/systems of work, use of machinery and 12 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
2 A historical perspective: The development of business accountability from the nineteenth century equipment and the training and supervision of staff. There are also specific regulations for the provision of health and safety standards in different industrial sectors. Growing emphasis is placed on the development of safe working practices by businesses, the prevention of workplace incidents and the development of a safety-conscious culture. Organisations are increasingly encouraged to be proactive in their management of risk at work, to conduct health and safety audits, to carry out risk assessments of the impact of their activities and to formulate their own tailor-made health and safety policies. The HSE and local authorities are charged with enforcing the provisions of the Act. Inspectors are deployed to ensure that businesses comply with their statutory obligations and to provide a source of advice and guidance in the workplace. They have wide powers of enforcement to address any breaches that they find. The health and safety regime is overseen by the Health and Safety Commission, which has a strategic policy role. When you looked at the HSE’s annual statistics at the beginning of this course, you may have noticed that the statistics for the number of health and safety prosecutions are recorded. The figures for 2009/10 reveal that there were 737 convictions for health and safety offences, which represented total fines of £11.6 million (an average of £15,817 per breach). At the time of writing the largest fine ever imposed was £7.5 million on Balfour Beatty, the railway contractor which was found guilty of health and safety infringements in the Hatfield rail crash in 2000; Railtrack was also fined £3.5 million for its failure to supervise its contractor (Balfour Beatty). This crash was caused by the contractor’s failure to maintain the track adequately and resulted in four deaths and over one hundred people sustaining injuries. The size of the fines imposed on business organisations is widely regarded as being an insufficient incentive to encourage large MNEs to be more proactive in this area. Arguably, fines need to be large enough to raise the concern not just of the organisation’s management, but of its shareholders, too. However, the broader costs of systemic corporate failings should not be underestimated: for instance, the estimated costs of £722 million for repairs and compensation as a consequence of the Hatfield crash was directly responsible for the commercial failure of Railtrack. 13 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
3 Corporate manslaughter
3 Corporate manslaughter
Incidents such as the Hatfield rail crash are regarded by public opinion as so
reprehensible that the parties responsible should face the more serious criminal charge of
manslaughter. As you will have gathered from reading the previous section, the history of
prosecutions of commercial enterprises for relatively minor health and safety abuses in
the workplace is a successful one. However, in contrast, the record of prosecutions for
manslaughter for deaths occurring in the workplace is not. In the case of the Hatfield
crash, the prosecutions for manslaughter against Balfour Beatty, Network Rail (Railtrack’s
successor), a regional director, two managers and a rail engineer employed by Balfour
Beatty were all unsuccessful.
You will now look in more detail at the issues involved in holding business organisations
criminally accountable for deaths caused by their activities. You will then consider the
provisions of the Corporate Manslaughter and Corporate Homicide Act 2007 (‘the 2007
Act’), which represents a major statutory reform of the law in this area.
Since the mid-1990s a series of high-profile disasters caused by serious corporate
failings, but for which there were no corporate manslaughter convictions, have highlighted
the flaws in the existing legal system. They exposed the fact that there were particular
difficulties in satisfying the elements of the common law manslaughter offence when
applied to incorporated organisations.
The difficulty in securing convictions for corporate manslaughter was twofold. The first
issue was that business organisations prosecuted for workplace deaths were invariably
charged with the common law crime of ‘gross negligence manslaughter’.
3.1 Common law gross negligence manslaughter
Dating originally from the nineteenth century, this offence was crafted by the courts in a
series of cases which were designed to identify individual liability for death in cases where
the accused owed a duty of care for the victim. It was often used in cases involving
professional misconduct such as serious medical failures.
Box 1 Gross negligence manslaughter
The test to be applied to determine whether a person has committed gross negligence
manslaughter was articulated by Lord Woolf LCJ in R v Adomako [1994] UKHL 6, who set
out the five elements required:
1. a duty of care owed by the defendant to the victim
2. a breach of that duty
3. a risk that the defendant’s conduct could cause death
4. evidence that the breach of duty caused the victim’s death
5. the defendant’s conduct fell so far below the standards of a reasonable person in
that situation that they should be labelled grossly negligent and deserving of
criminal punishment.
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The fifth element of this test caused problems when applied to organisational failures.
Jurors have to determine whether the defendant’s conduct fell ‘so far below’ the standards
reasonably expected of an individual in the position of the defendant by judging whether
that conduct showed ‘such disregard for the life and safety of others’ as to amount to a
criminal breach of duty. This test is circular, as acknowledged by Lord Woolf in R v
Adomako. In an attempt to clarify the matter in R v Misra & Srivastava [2005] 1 Cr App R
328, paragraph 58, the Court of Appeal agreed that the term ‘reprehensible’ would be apt
to describe the nature of the conduct:
The essence of the matter which is supremely a jury question is whether,
having regard to the risk of death involved, the conduct of the defendant was so
bad in all the circumstances as to amount in their judgment to a criminal act or
omission.
(R v Misra & Srivastava [2005])
In practice, this proved to be a particularly difficult question to answer, in the case of the
prosecution of both individuals and companies.
The second issue in securing corporate manslaughter convictions derives from the fact
that a vital part of establishing guilt for gross negligence manslaughter is the need to
attribute individual culpability for that death. This requirement proved an insurmountable
difficulty for prosecutors in the case of corporate killing. The courts have insisted that
corporate culpability could be ascertained only and exclusively with reference to the
demonstrable mindset of a director or other controlling or directing mind (this is known as
the doctrine of identification). Slapper has pointed to how this level of prosecutorial
difficulty in affixing a criminally guilty corporate mind amounted to corporate impunity:
For the early part of its history, the company lay outside criminal law. ‘It had no
soul to damn, and no body to kick,’ said 18th-century Lord Chancellor Lord
Thurlow. The main difficulty in using the current [pre-2007 Act] law of
manslaughter to proceed against corporations is that the rules evolved to
reflect individuals. They are concerned with evaluating the ‘state of mind’ of the
defendant, and companies do not have easily identifiable ‘minds’.
(Slapper, 2002)
Lord Denning (in Bolton (Engineering) Co Ltd v Graham & Sons [1957] IQB 159)
attempted to address the issue by using an anthropomorphic metaphor when he
described the company as like a human body:
some of the people in the company are mere servants and agents who are
nothing more than hands to do the work and cannot be said to represent the
mind or will. Others are directors and managers who represent the directing
mind and will of the company, and control what it does. The state of mind of
these managers is the state of mind of the company and is treated by the law as
such.
This analogy is attractive and memorable, but resulted in corporate liability being
restricted to the acts of directors and a few high-level managers. It proved singularly
difficult to establish that an individual in such a position had the requisite guilty mind for
what is invariably a failing at a lower level in the workplace. In fact, it unduly favoured
larger corporations, which escaped criminal liability for the acts of employees who
15 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 20213 Corporate manslaughter managed the day-to-day activities of the corporations. It followed that a company with a diffuse and disordered system of management, hosting a poorly defined internal communications system, was less susceptible to a successful prosecution for a death caused by it than a well-structured, organised company in which clear lines of authority existed. This paradoxical gap in legal protection provided a perverse incentive for the system of management within a company not to adequately or clearly designate responsibility for health and safety concerns. Activity 3 Read Reading 2: an extract from Slapper (2011), 'Violent corporate crime, corporate social responsibility and human rights'. In this extract Slapper considers the ways in which this obstacle to attributing liability created a difficulty in terms of bringing prosecutions under the common law against corporations alleged to have committed the corporate manslaughter offence. Click here to access Reading 2 Comment Slapper makes the case for looking at the reality of the situation. After all, since the individuals behind a corporation enjoy the benefits of collective identity, they should also be exposed to determinations of blameworthiness. This is an argument that has been influenced by other European perspectives, but it remained a strictly academic one until the shift in direction in the approach of the 2007 Act. Gobert goes even further. He argues that a corporation’s failure to take precautions by way of implementing policies and training to avoid deaths derives from its corporate culture (Gobert, 1994a; Gobert, 1994b; also Geraghty, 2002, p. 327). As a consequence, he rejects the notion that corporations should be treated in the same way as natural persons (i.e. looking for a ‘guilty’ mind) and advocates that different legal concepts should underpin the liability of artificial persons. This view reflects the structures of modern corporations, which are more often decentralised and where crime is less to do with the misconduct by or incompetence of individuals and more to do with systems that fail to address problems of monitoring and controlling risk. 3.2 The history of corporate manslaughter prosecutions in the UK What follows is a historical summary of the corporate manslaughter offence in the UK. The corporate manslaughter ‘story’ began with the case of Glanville Evans (Slapper, 2011, p. 86). The next instalments of the corporate manslaughter story came over 20 years after his death when, in the 1980s and 1990s, there was a series of high-profile incidents of corporate failings but few convictions for corporate manslaughter. For instance, the prosecution in 1990 against P&O Ferries (Dover), after the Herald of Free Enterprise capsized with the deaths of 192 people, resulted in acquittals for manslaughter. This would appear to be because the jury could not be sure beyond reasonable doubt that the resulting deaths were due to ‘criminal’ breaches of duty as required by the test in Adomako. 16 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
3 Corporate manslaughter
In recent years there have been several rail disasters in the UK, such as those at
Clapham Junction in 1997, Hatfield in 2000 and Potters Bar in 2002. Inquiries into the
causes of these incidents reveal a variety of organisational failures including the failure to
install up-to-date safety equipment and to introduce new rolling stock, the inadequate
training of drivers, the failure to undertake track repairs and poor maintenance of the
points, the failure of safety systems and the lack of an appropriate safety culture, to name
but a few. Despite the evidence of corporate incompetence, complacency and cost-cutting
revealed by the inquiries into each disaster and a cumulative death total of nearly one
hundred people, prosecutions for manslaughter against the organisations concerned and
their officials were either not proceeded with for lack of evidence, or ultimately failed in
obtaining a conviction.
Case study: the Southall rail crash
The Southall crash occurred in September 1997 when the driver of a high-
speed passenger train run by Great Western Trains (GWT) ignored a red signal
while travelling at a speed of 125 miles per hour and collided with a freight train
crossing the main lines, killing seven people and injuring a further 151.
Approximately £10 million worth of damage was caused. Three inquiries were
launched, each focusing on whether the passenger train had passed a signal at
red or was mistakenly shown a green light. The Health and Safety Commission
report found that the primary cause of the accident was the driver’s failure to
respond to two signals warning of the freight train on the track ahead. He could
not account for why he had missed the signals, but the report said he may have
‘dozed off’.
There were two safety systems on the train that, if functioning and used
appropriately, could have prevented the tragedy. These were the basic
Automatic Warning System (AWS) and a trial version of the more advanced
Automatic Train Protection (ATP). However, the AWS was broken and the ATP
was switched off because the driver had not been trained how to use it. There
was no second driver in the cab. These were not isolated or individual
mistakes, but were commonly understood as part of a systemic failure of safety
management. A prosecution of GWT for manslaughter, relying on the common
law offence of gross negligence manslaughter, failed because there were
insurmountable difficulties in finding one senior person in the company who had
sufficient knowledge for grossly negligent culpability to be demonstrated.
The modest number of successful convictions for corporate manslaughter that occurred
invariably involved failures in a small company where it was possible to identify which
individuals were responsible for its health and safety obligations. In contrast with larger
organisations, the managing directors or equivalent in smaller organisations are generally
much more closely involved in the day-to-day running of the business. The reality is that it
is harder for the manager(s) in a smaller company to disavow knowledge of serious
irregularities in the adherence by the company to its health and safety policy, as there is a
much more limited pool of possible ‘controlling minds’.
Case study: the Lyme Bay canoeing disaster
In November 1994 the canoe hire company OLL Ltd and its managing director,
Peter Kite, were convicted of the manslaughter of four students who had died
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during a canoeing trip in Lyme Regis, Dorset, in March 1993. The school group
was accompanied by a school teacher and two unqualified instructors. Those
instructors had only basic proficiency skills in canoeing. The canoes capsized
frequently and the group was swept out to sea. The canoeing centre which OLL
Ltd ran had failed to provide distress flares and had not informed the
coastguard of the expedition. Two instructors from the centre had resigned a
year earlier in protest at poor safety conditions. The risks were serious and
obvious.
Only two people in the company had management responsibility, so the
‘controlling mind’ was easily identified.
Mr Kite was sentenced to three years’ imprisonment, in the event reduced to
two years on appeal. The company was fined £60,000.
3.3 Corporate Manslaughter and Corporate
Homicide Act 2007
Reform has now come in the form of the 2007 Act, which creates a statutory, specific
offence of ‘corporate manslaughter’. A corporation, be it a company, government
department or other Crown body, will be liable to face prosecution where a gross failing by
its senior managers to take reasonable care for the safety of their workers or other
individuals causes death.
This statutory offence is premised on a number of concepts previously established under
the common law, such as liability arising through the breach of a duty of care owed by the
organisation under the operation of the law of negligence. The offence of corporate
manslaughter is designed to complement, rather than replace, existing health and safety
offences, for which an organisation may still be prosecuted as an alternative to, or in
addition to, the new offence. Also, individuals within the organisation may still face
separate prosecutions for the common law crime of gross negligence manslaughter.
In this section you will consider the changes brought about by the 2007 Act in more detail.
Activity 4
This activity is intended to give you an insight into how the 2007 Act applies.
On a computer access the Corporate Manslaughter and Corporate Homicide Act
2007.
Once you have done this, read Case study 1 and answer the question set out below.
Case study 1: Stonebrick Ltd
Conran Smith, a junior surveyor employed by Stonebrick Ltd, a national firm
of property developers, was required to inspect the building work under-
taken on the conversion of an eighteenth-century mill house into
apartments. Unknown to him, the area manager, James Henry, had raised
concerns about the quality of the work undertaken, in particular the failure to
replace the rotten roof trusses. He had sent a report on the issue to Josef
Schmann, the managing director responsible for operations and site safety.
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However, Schmann was on long-term sick leave after a heart attack and the
three other managing directors of the company had not taken on his
responsibilities. As a consequence, James Henry’s report lay unread on
Schmann’s desk.
The foreman of the mill conversion, Winston Green, was aware of Henry’s
concerns and he had asked the building team to prevent access to the roof
space until the matter was resolved. However, Green did not check to
ensure that his instructions had been carried out. If he had, he would have
found that the barrier had not yet been constructed. Green was on his lunch
break at the time of Smith’s visit and so the latter was not made aware of the
potential danger. As a consequence, when Smith climbed into the roof
space to inspect the insulation, the roof trusses collapsed, causing him to
fall through to the next floor and to sustain fatal injuries.
Explain when an organisation such as Stonebrick Ltd will be guilty of an
offence of corporate manslaughter under the 2007 Act.
Comment
An organisation will be guilty of an offence under section 1(1) if the way in which its
activities are managed or organised causes a person’s death and amounts to a gross
breach of a relevant duty of care owed by the organisation to the deceased.
There are several aspects to this:
Section 1(3) stipulates that in order for an offence to be committed under
section 1(1) the way in which the senior management has managed or organised
the activities of the organisation must be a substantial element of the breach.
‘Senior management’ is defined in section 1(4)(c) as persons who play significant
roles in the making of decisions about how the whole or a substantial part of its
activities was to be managed or organised, or the actual managing or organising
of the whole or a substantial part of its activities.
The relevant duty of care is defined in section 2(1) and includes the duties owed
by organisations under the law of negligence, so it covers duties owed to
employees and people working for the organisation, the duties owed by occupiers
of premises and duties owed in connection with certain specific activities such as
construction and maintenance operations.
The breach of this duty must be ‘gross’ as defined in section 1(4)(b), which means
that the conduct must fall far below what can reasonably be expected of the
organisation in the circumstances. This is a factor to be determined by the jury
and section 8 sets out the factors to be taken into account. They must consider
whether the evidence shows that the organisation failed to comply with any health
and safety legislation that relates to the alleged breach and, if so, how serious
that failure was and how much of a risk of death it posed.
The jury may also consider the extent to which the evidence shows that there
were attitudes, policies, systems or accepted practices within the organisation
that were likely to have encouraged any such failure or to have produced
tolerance of it and they must have regard to any health and safety guidance that
relates to the alleged breach.
In the case of Stonebrick Ltd, the prosecution will look at the role of the directors
and any other managers responsible for the working practices which led to
Smith’s death. The managing directors failed to take responsibility for Schmann’s
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health and safety role in his absence. This would seem to be a sufficiently serious
breach under the guidance provided by section 8 to be likely to amount to a
contravention of the Act.
James Henry, the area manager, did attempt to alert the relevant managing
director, but arguably he should have done more to ensure that adequate
measures were taken to prevent access to the dangerous area and to warn of the
danger on the site. He may be sufficiently senior in the organisation to be
considered as senior management for the purposes of section 1. Green, the site
foreman, was responsible for health and safety on the site and did instruct his
workmen to erect a suitable barrier, but failed to ensure that his instructions were
carried out. It is unlikely that Green’s failures would be regarded as those of
‘senior management’ for the purposes of section 1.
There is evidence that the recent legislative intervention has given rise to a change in the
culture of the way that investigations and prosecutions are undertaken following a death in
the corporate context. Recent experience shows that investigators and prosecutors are
willing to deploy the full range of applicable criminal offences against both organisations
and individuals following a fatal accident (Bastable and Matthews, 2010).
It is difficult to predict the effectiveness of the reform. It may be that one of its greatest
achievements will be to highlight the debate concerning the nature of corporate
accountability for industrial incidents. At the time of writing there have been three
convictions for corporate manslaughter under the 2007 Act.
20 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 20214 Corporate responsibility in an international context 4 Corporate responsibility in an international context In this section the perspective broadens to consider how other countries have dealt with the imposition of criminal liability for corporate killings. You will consider the potential for the application of international law human rights principles and the impact of the development of CSR policies. 4.1 Comparative examples of legislating to prevent corporate killings The UK model of legislating for corporate homicide is rooted in, and reflects, comparative experiences in other legal jurisdictions (Slapper, 2011). We will now look at those other legislative models, given that the 2007 Act has selectively taken from these. Countries do differ in their approach to regulating and prosecuting corporations for health and safety contraventions. The main difference between jurisdictions, in terms of their approach towards regulation of corporate responsibility for deaths, is whether the focus is primarily on individual liability or corporate liability. Some countries do not recognise corporate criminal liability. Others impose only administrative penalties for criminal acts of corporations. Activity 5 You now need to choose, from the list provided below, one country as your focus. Alternatively, if you are studying this course from a country other than the UK you may decide that it would be a good idea to research the country that you are studying from. Using the skills as a legal researcher, search for how the particular country that you have chosen has tackled the issue. The date provided by the country’s name denotes when that country enacted legislation specifically dealing with corporate killing. In particular, see if you can find what politicians, journalists and other commentators in your chosen jurisdiction have said about the need for reform of the law regulating deaths in the corporate context. Then compare your findings with what you have learnt about the UK’s approach to corporate manslaughter. France, 2006 Romania, 2006 Finland, 1995 Austria, 2006 South Africa, 1995 Italy, 2001 Australia (some states), 1995 Netherlands, 1991 Comment Your comments will vary greatly depending on the country that you have chosen. From your research you should be able to determine whether a similar approach has been taken in the country of your choice to that in the UK. So for instance research on 21 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
4 Corporate responsibility in an international context Australia should have found details of the Australian Commonwealth Criminal Code 1995 and the Bracks Bill 2001. Portugal, Spain, Norway, Finland and Denmark all have incorporated criminal punishments for corporations in new/revised penal codes. 4.2 The impact of globalisation on corporate accountability for industrial incidents Criminal accountability for corporate deaths invariably applies only to deaths which occur within that jurisdiction and does not have extra-territorial effect. So, for instance, MNEs operating abroad cannot be held accountable under the 2007 Act for deaths that occur outside the UK. This highlights the fact that, as globalisation progresses, the effectiveness of individual jurisdictional safeguards for corporate malpractice are in danger of being diluted, as commercial activity can be moved to a jurisdiction with less onerous legal regulation. In recent years more countries have recognised domestic civil liability for corporate torts committed abroad. This enables litigation to take place in the ‘home’ jurisdiction of the business organisation even where the act or omission occurred in a country in the developing world. For instance, in the case of Trafigura the alleged victims of the dumping of toxic waste in Sierra Leone brought a class action against the UK-registered oil company in the High Court in the UK. 4.3 The application of international law and human rights principles to industrial incidents Ideally, robust national policy and law should secure adequate protection for individuals and this includes ensuring adequate health and safety protections for those affected by commercial activity. In practice, however, national policy does not help in those countries where the enforcement of regulatory controls is weak or non-existent. It may be that international law and the development of a body of human rights principles have the capacity to provide more protection from corporate abuses than national laws. Slapper (2011) observed that positing human rights norms offers a way to universally recognise minimum standards of corporate behaviour cross-jurisdictionally, i.e. across organisations in all jurisdictions, in spite of the barriers that geography ordinarily represents. Human rights norms are not restricted in their geographical application, unlike criminal laws, which are invariably specific to the jurisdiction enacting them. They can be characterised as ‘triggers’ or mechanisms for state intervention where the state itself shows little or no impetus to act. In this way, human rights norms can set high standards and expectations of states in their attempts to enact domestic legislation which complies with their human rights obligations. The right to life is a fundamental human right included in all human rights charters and would appear to offer victims of corporate failings some hope of a remedy in this context. For instance, the International Covenant on Civil and Political Rights (ICCPR) requires that the right to life is protected by law, as does Article 2 of the European Convention on Human Rights (ECHR). The work of the ILO in setting international labour standards also 22 of 42 http://www.open.edu/openlearn/money-management/corporate-responsibility-industrial-incidents/content-section-0?utm_source=openlearnutm_campaign=olutm_medium=ebook Friday 29 January 2021
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