The Corporate Manslaughter Reform - Essay Example

The Corporate Manslaughter Reform: An Attempt to Enhance A Seemingly Absurd Idea The Obstacle: It is but proper in this work to mention some basic concepts of corporate criminal liability as a preliminary before taking up the crucial issues involved in the Corporate Manslaughter: The Government's Draft Bill for Reform. The longstanding common law concept of corporate criminal liability is anything but straightforward. Over time, the common law expanded its concept of moral blame to include incorporeal entities1, and criminal procedure reconciled new requirements, such as appearing for a hearing or serving out a sentence, with the non-corporeal nature of the corporation. Although corporations have long faced civil liability for the acts of their employees under the doctrine of respondeat superior2, the corporate criminal liability concept only came into existence in the early twentieth century. Corporate criminal liability is one of those frequently and hotly debated topics. One issue that attracts much attention (other than the subject matter of this work) is whether a corporation should be at "fault" or "culpable" before liability is imposed, and precisely what "corporate fault" or "corporate culpability" means. In other words, what liability standard should be required before imposing liability on the corporation. For example, should liability be imposed when the corporation is negligent, when it acts "knowingly," whenever harm occurs regardless of the "fault" or "knowledge" of the corporation, or some other liability standard This paper addresses this issue and provides some deterrence-based insights into the choice of liability standards for corporate crime. For one to be criminally liable, the elements of mens rea3 and actus reus must be present. Considering that corporations are purely incorporeal legal entities (meaning that they are artificial persons no matter what), these corporations cannot think or act except through the persons composing them (usually the board or directors where corporate powers are vested). From this observation, these corporations have a limited liability when enforcing criminal responsibilities where usually they are only made to pay indemnities or fines for damages caused. Certainly, you cannot attribute on them criminal acts flowing from the criminal or guilty minds or acts that individuals can commit. This is but a logical consequence of the very nature of corporations' artificial personality in connection with what possible penalty they could be made to suffer. But the famous case of R. v. P & O Ferries (Dover) Ltd. 93 Cr App Rep 72 (or the famous Herald of Free Enterprise case) have challenged this idea and the courts' decision was to formally recognise that these corporations can be made criminally liable for manslaughter. This decision is taken to mean as holding the corporation itself directly criminally liable for manslaughter (as if the corporation have acted independently on its own to constitute mens rea and actus reus) aside from the individual liabilities of its directors or officers. The US Supreme Court as well in 1909 (along the same line of thought on corporate criminal liability) held that corporations could be held liable criminally for acts or omissions including failure of an agent acting within the scope of his employment. From here, there were recent cases which have stated that a corporation will be held vicariously liable for the illegal acts of its employees if the employees act within the scope of their authority and intend to benefit the corporation. In both jurisdictions (UK and the United States), corporate criminal liability is without question recognised. The Problem of the Second Element of the Offence in Government's Proposed Draft Bill Reform on Corporate Manslaughter Corporate manslaughter is a homicide for a corporation. This means that a natural person is made to answer for criminal liabilities as if it were a natural person being held to answer for the consequences of a criminal act. Taken from the Government's Draft Bill Explanatory Notes are the following elements which will constitute the offence: 1.) The organisation must owe a duty of care to the victim that is connected with certain things done by the organization; 2.) The organisation must be in breach of that duty of care in the way its senior managers manage or organise a particular aspect of its activities; 3.) This management failure must have caused the victim's death. The usual principles of causation in the criminal law will apply to determine this question; and 4.) The breach of duty must have been gross. There could be no question that the calls for the revision of this bill is in connection with the Government's drive to modernize the criminal justice system as set out by the Home Secretary, the Rt Hon Charles Clarke MP. His theme was suggestive of his observation that the present laws governing corporate manslaughter have failed to reflect the reality of modern corporate life (Haines, 1997) which operated in a very restrictive manner and failed to deliver effective sanctions to corporations. This is due to the fact that corporate manslaughter and the liability attached out the offence only made the persons composing the organization liable instead of dragging this corporation to directly suffer the consequences of criminal liability. In short the proposed reform bill seeks to remedy this very few successful prosecutions of organisations for corporate manslaughter. To do this is to inject the second element of the offence which is to establish the breach of the corporation itself (where the criminal liability pertains solely and exclusively to the corporation) out of organisation's senior managers behavior with respect to a particular aspect of the organisations activities. The 1st, 3rd and 4th requisite of the offence speak of the circumstances of how the corporate manslaughter as a rule can be committed while the 3rd element establish the connection on how organisation becomes ultimately liable, again, out of the senior managers' conducts. Behind the second element of the offence lies somewhat an absurdity of the proposed reform bill aside from the idea that corporate manslaughter have run contrary to legally established principles of doctrine of corporate entity already. As have mentioned in the preliminary of this work, a corporation is an artificial being, having a separate personality aside from the persons composing it. Literally, this entity does not have any particular attribute that makes it liable the way a natural person is in terms of criminal sanctions. In essence, a corporation is not made criminally liable because it cannot commit a criminal act where the latter can only be attributed to a natural person nor a corporation can be made to suffer deprivation of liberty as penalty for the offence. The only way a corporation is made to suffer criminally is for the criminal court to direct indemnification of the victims (on the basis of vicarious or contributory liability rule) or simply cause its dissolution if circumstances so warrant. Through the vicarious or contributory rule4, the barrier of corporate entity have already been penetrated which virtually allowed the possibility of making a corporation liable. In addition to this is the recognition of criminal liability pertaining to an organisation like the corporate manslaughter in the Herald of Free Enterprise case and the subsequent criminal prosecutions of some corporations under that law. From this legal invention of shifting the liability of the natural person to the artificial one (the corporation) which have by the way already gained acceptance and have been the rule in almost all legal jurisdictions, comes a proposed innovation (which is the corporate manslaughter reform). And this time, the proposed bill seeks to hold the corporation for manslaughter on the basis of failed or wrong management of the corporate affairs. Regardless of the change from where liability of corporate manslaughter may be based from, the issue shifting of criminal liability remained and in fact will be enhanced by the proposed reform. The Proposal The proposed Corporate Manslaughter Law aims to tackle the identification principle by providing a new basis --- a test that focuses on management failure at senior level within the organization. Instead of focusing on the negligent act of an individual employee that has caused the death, there will be "management failure" that will encompass individual or collective management. The prosecution will then have to provide evidence delineating that the crime was committed due to management procedures, negligent acts that will have to be traced to the management. This argument have apparent weight considering statistics claiming thousand of workers, or the public, suffering or dying due to work-related cases and only having a handful of directors convicted5. Since it has become common that the immediate actor or apparent negligent person takes the bulk of the blame, the proposed law will create more responsible corporate directors or senior executives down to the stream of responsibility within the corporation. So that responsibility is shifted on the opposite side, whereas there was once responsibility laid to the direct superior, it shifts back to the highest senior level within the organization. This is a more direct approach that would now encompass "relaxed" attitudes, failure of consideration for a spectrum of factors that must need careful consideration by "responsible" persons within an organisation. In fact, not even the Crown will be immuned to prosecution. It means that all entities that are organized as employer or occupier of land and / or supplying goods and services or when engaged in other commercial activities like mining or fishing, shall be held liable for future "gross neglect" upon the legislation of the proposal. The Proposal also stated a rather clearer view as to its description of "gross neglect": "GROSS BREACH AND STATUTORY CRITERIA The new offence is targeted at the most serious management failings that warrant the application of a serious criminal offence. It is not our intention to catch companies or others making proper efforts to operate in a safe or responsible fashion or where efforts have been made to comply with health and safety legislation but appropriate standards not quite met. The proposals do not seek to make every breach of a company's common law and statutory duties to ensure health and safety liable for prosecution under the new offence. The offence is to be reserved for cases of gross negligence, where this sort of serious criminal sanction is appropriate. The new offence will therefore require the same sort of high threshold that the law of gross negligence manslaughter currently requires - in other words, a gross failure that causes death. We have adopted the Law Commission's proposal to define this in terms of conduct that falls far below what can reasonably be expected in the circumstances." Bergman argued that the Health and Safety Executive, although tasked to address health-related issues within the workplace, lack the power and jurisdiction to file or seek criminal offenses within the workplace. There is shrouding of issues and evidences because the investigations were always at some point undertaken by the HSE, and were not available to the public. 6 The proposal argued that while deaths in prisons are undergoing independent and rigorous investigation, much serious issues are taken lightly that involves the productive citizens. The Test Focused on the responsibility on the working practices of the organization, the proposal will not limit the questions about the individual responsibility of senior managers but will find out how activities were organised and managed at senior management level. Conduct will be leveraged individually and collectively but central to management practice. There would be a shift from junior executive level to the senior level for responsibility on any harm or death caused by the work. The target is the corporation as a whole with inadequacies in practices or systems. Therefore, the issue will be incorporated in the corporate management system as part of corporate strategy. It becomes embedded to the business establishment making responsibility a corporate concern. The question in hand is the seemingly separation between senior level management towards the system of the corporation when it comes to negative performance that is associated with harm or death within the work are or related activity. The proposal noted that management decisions play a role in the activities of the organisation as a whole or as a substantial part of it. This, then means that the senior manager have a "significant" role thus representing "a second threshold for those whose management responsibilities bear on the organization as a whole or a substantial part of it." The "significant" further defines relevance of the role in the management activity, thereby allowing a very positive role of participation. The Blur Line Within the section 30 of the proposal comes the blurring of identification which the Proposing entity need to address properly in order to present a more effective legislation. "What amounts to a "substantial" part of an organisation's activities will be important in determining the level of management responsibility engaging the new offence. This will depend on the scale of the organisation's activities overall. It is intended to cover, for example, management at regional level within a national organisation such as a company with a national network of retail outlets, factories or operational sites. And where an organisation pursues a handful of activities in roughly equal proportion (for example, a company that has manufacturing, retail and distribution operations), those responsible for the overall management of each division. Levels below this will potentially be covered depending on whether business units can sensibly be said to represent a substantial part of the organisation's overall activities. The definition will apply with different effect within different organisations, depending on their size. Management responsibilities that might be covered by the offence within a smaller organisation, such as a single retail outlet or factory, may well be at too low a level within an organisation that operates on a much wider scale.This reflects the intention to criminalise under this offence management failings that can be associated with the organisation as a whole, which will capture different levels of responsibility depending on the size of the organisation. However, it would still be the case that other forms of accountability, such as health and safety offences, would apply in wider circumstances. Since proposals for change do not always espouse perfection, this is not an excuse to be entertained at this point. There had been a lot of damages done to victims and their families so that there must be an established "true" identity in the prosecution of corporate manslaughter. There must be a concrete legislation that points out "responsibility" to whom is due and more complex or bigger organizations must not be exempt to such. Existing laws already make for complex definition of "responsibility" which is called "identification" in this proposal, thereby, lengthy prosecutions and at most, no prosecution taking place at all. So, it becomes lip service if upon the presentation of a promising proposal, there is a return to the previous system that did not work. Other Considerations: Besides the mentioned legal identity of a corporation as being a non-person, there is a bigger obstacle to corporate laws that need to be addressed as well by the proposal. Corporate laws must take an overhaul of a legal description in order for the proposal to work. Likewise, as earlier mentioned, Bergman also pointed out another weak factor on the investigation process, with sudden deaths in the workplace or work-related events. A process has it that a police officer is required to check and investigate on the scene to asses if "the circumstances might justify a charge of manslaughter". The officer has two options: to pursue full investigation or handover the case to the HSE. In most instances, the HSE takes over, and rarely does the HSE investigator have an idea about crime. Only a small percentage is reported and an even lesser percent undergo investigation.7 Likewise, police officers lack knowledge regarding the operations of large companies further aggravating to identify manslaughter in any given situation. Unless, as Bergman (1998) proposed that investigators undergo special training regarding corporate operations and responsibility, which also complicates further since corporations have grown varied and sophisticated over time, and unless the fraud squad is sent, there will be no proper determination of a crime committed in the workplace. Barwick (2005) painted the embarrassing situation death brings to a company: the PR troubleshooting expenses and all the media attention, and yet, she added that "company executives can indulge in the crime [] with very little fear." She also asserted that an estimate of 2.2 million people suffer from ill-health believed to be work-related with the HSE itself figures that 30,666 major injuries of amputations, burns, loss of sight, and fractures were reported between 2003-2004. Personal injury lawyer Martin Bare was quoted by Barwick saying, "The idea that the compensation culture exists is rubbish. Less than a quarter of victims of workplace injury make a claim. At the end of it, for those who are successful, damages for personal injury are not a Lottery win. There is no windfall." 8 Workers are left without much choice as Barwick (2005) noted. Those who are trying to seek the safety of a corporation when looking for a job are most likely to have to make a request under the Freedom of Information Act, which maybe refused. And those who win personal injury settlements from employers "normally sign a gagging clause," (Barwick, 2005). Barwick also quoted Hazards magazine editor Rory O'Neill saying, "The workplace remains the only place where you can still fill someone's bloodstream with lead or arsenic and escape jail; where you can gas someone -- and go home for tea." The UK public also noted how other civilisations have acted on issues pertaining manslaughter in the workplace, while UK lags about 50 years behind. UK, being a champion of democracy need to address its workers' rights and privileges in the workplace and the best way to do so is to amend its corporate laws with the corporate manslaughter a main point of concern. Reference: Barwick, Sandra. "Thugs in the Boardroom: They an Hurt You so You Can Never Work Again - And the Law Can't Touch Them. Sandra Barwick on the Hidden Epidemic of Corporate GBH." New Stateman, Vol 134, May 30, 2005. Beck, Matthew E. and Mathew E. O'Brien. "Corporate Criminal Liability." American Criminal Law Review. Vol. 37, 2000. Bergman, David. "Bosses Get Away With Murder." New Statesman, November 6, 1998. Carrascom, Cynthia E. and Michael K. Dupee. "Corporate Criminal Liability." American Criminal Law, Vol. 36. 1999. Hon. Clarke, Charles. "Corporate Manslaughter: The Government's Draft Bill for Reforms." As presented to Parliament, March 2005. Haines, Fiona. Corporate Regulation: Beyond 'Punish or Persuade'. Clarendon Press. 1997. 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