Keeping company

Despite the Scottish Executive having invested considerable time and money on proposals to reform the law of corporate criminal liability for work-related deaths in Scotland, quite unexpectedly Westminster is to consider creating a new statutory offence in Scotland of corporate homicide. The proposed offence is a carbon copy of the offence of corporate manslaughter proposed for England.

The Corporate Manslaughter and Corporate Homicide Bill, laid before Parliament on 19 July, seeks to align the corporate killing laws in Scotland and England. The bill is a wholesale adoption of the original draft Corporate Manslaughter Bill (“the English bill”) for England & Wales published in March 2005, which was highly criticised last November by an Expert Group set up by the Scottish Executive to consider reforms to the law in Scotland.

The proposed offence

An organisation will be guilty of corporate homicide if a person’s death results from a management or organisational failing amounting to a gross breach of a duty of care. The new offence will apply to failings by an organisation’s senior managers – individually or collectively. In assessing whether there has been a gross breach of duty, a jury will be required to consider whether there was a breach of any health and safety legislation and how serious any failure was.

This follows the English bill which envisaged an offence derived from the English civil law, based on a breach of a duty of care. The distinction between a civil wrong and a criminal offence lies in the grossness of the breach.

No general Crown immunity is provided for; however, a narrow band of public activities will not be subject to the new law.

The principal punishment for corporate homicide will be, as under the existing health and safety laws, an unlimited fine. The law in relation to individuals will not be changed.

The Scottish background

In Scotland, no company has been successfully prosecuted for culpable homicide. Prosecutions of individuals for culpable homicide following work-related deaths are also extremely rare, to the extent of being obsolete. Similarly in England, only seven companies have been convicted of gross negligence manslaughter.

The English bill did not propose to reform the law in Scotland, and the Executive set up its Expert Group in April 2005. The Group was highly critical of the proposals in the English bill (see opposite). In particular, it considered that the distinction between a civil and a criminal wrong could become blurred by adopting the civil law concept of duty of care into Scottish criminal law. The Scottish common law offence of culpable homicide for work-related deaths is premised on reckless behaviour which amounts to a “criminal indifference to the consequences”. The Expert Group favoured an offence based on a redefined concept of “recklessness”, which embraced both the deliberate risk-taker and the person who is not aware of the risks, but who judged by objective standards “ought to be aware”.

The Group recommended that companies be vicariously criminally liable for work-related deaths caused by employees or agents; increased personal criminal liability for all individuals who recklessly cause death; and increased personal liability for directors and senior managers whose actions or inactions could be said to have been a contributing factor in an accident that resulted in death.

The Executive said it welcomed the Expert Group report and would legislate as soon as parliamentary time allowed. In early June came the news that there was insufficient time to legislate this session.

In attempt to move matters forward, Karen Gillon MSP published on 20 June a draft private member’s bill, the Corporate Homicide (Scotland) Bill, and consultation paper. This would make an organisation guilty of corporate homicide if the actions of its “office holders” are reckless or grossly negligent, and those actions cause death.

However, it now looks likely that Westminster will legislate for the whole of the UK and the proposed new offence for Scotland will be the very one that the Expert Group said was inappropriate.

Change of tack

The bill represents an about-turn by the Executive. The remit of the Expert Group was “to review the law in Scotland on corporate liability for culpable homicide and to submit a report to the Minister for Justice by the summer”. The Group’s report said that alignment of the laws in Scotland and England was secondary to getting the law right for Scotland.

The Executive has now apparently concluded that the Expert Group’s proposals are beyond the legislative competence of the Scottish Parliament, because they are too closely linked to reserved matters under the Scotland Act 1998, primarily health and safety.

The Executive has provided very little detail on the legal reasoning behind this view. A spokesman said: “After thorough consideration Whitehall and Scottish Executive lawyers have concluded that the Home Office bill is reserved. This is because the purpose and effect of the bill is closely linked to the reserved matters of health and safety and business associations. As a result the Westminster bill covers Scotland and given that the bill is wholly reserved there is no need for the Scottish Parliament to give its consent.”

A reserved matter?

There remains doubt, however, as to whether legislating in this area is a reserved matter. The Executive itself has stated that it will still consider whether any additional legislation is required in Scotland. How can it consider further reforms to corporate homicide for Scotland if it has concluded that it is a reserved matter? In any event, surely it would have been more efficient and expedient for the question of competence to have been answered at the outset, and certainly before the Expert Group was set up to review the law in Scotland.

In terms of the devolution settlement, health and safety and business associations are reserved matters (Scotland Act 1998, schedule 5, part II). Criminal justice is not. “Health and safety” in this context includes the Health and Safety at Work etc Act 1974, and related regulations.

There is a persuasive argument that reforming the common law of corporate homicide is a devolved matter relating to criminal justice. After all, the law sets out the acts and the behaviour which, if they result in death, will be considered so opprobrious that a homicide conviction rather than a health and safety conviction should follow.

The bill does not seek to amend the Scottish common law offence of culpable homicide, although it repeals the common law offence of gross negligence manslaughter in England.

The current position is therefore that the common law of culpable homicide in relation to companies will not be changed. There will be a new UK-wide statutory offence of “gross negligence” homicide, and potentially further legislation in Scotland.

Opposing reactions

The CBI welcomed the news that there would be one consistent offence for the UK. The CBI had been concerned by the Expert Group’s draconian proposals. It feared that people would not accept directorships of Scottish companies, businesses would relocate their head offices to England and, perhaps, refuse to undertake high risk business in Scotland.

Scottish trade unions, on the other hand, are livid that Westminster is proposing to adopt less severe measures than were recommended by the Expert Group. They argue that the homicide law in Scotland needs to go further than in the rest of the UK, particularly because, whilst an employee is nearly twice as likely to die in a work-related death in Scotland as in England, an accused company in Scotland is less likely to be convicted of a health and safety offence (statistics on previous page).

These headline-grabbing figures need to be viewed with care. They fail to take account of regional differences within England, and differences in the types of work undertaken in different regions of the UK. Differences in approach between Scotland and England to plea adjustments could account, in part, for the conviction rates. In any event, the unions’ argument does not consider that a high conviction rate does not equate per se to justice being achieved. In England, cases are heard before a bench of lay magistrates or a jury, whereas in Scotland most cases are heard by a legally qualified sheriff. In contrast to the English system, sheriffs will consider legal argument and often dismiss cases at an early stage. Having a lower conviction rate is perhaps the price paid in Scotland for demanding high standards in the prosecutions brought, and in particular, that the alleged failings are clearly defined.

Lawyers desire a clear and concise law which captures the essence of corporate responsibility for work-related deaths and can distinguish between failings that are so bad that a prosecution for corporate homicide is warranted, and less serious failings which should be dealt with under the existing health and safety laws. Unfortunately, there is a danger that the law in Scotland will become a muddle of common law and statutory offences, with no clear dividing line between what amounts to homicide and what should be treated as a health and safety matter. Not all work-related deaths should be prosecuted as corporate homicide, as to do so would water down the seriousness of the offence and the reforms would be self-defeating.

The picture in Scotland is further muddied by the retention of the common law offence of culpable homicide and the potential for further legislation by the Executive.

Over to the judges

The argument for clear and concise laws, especially for such a serious offence as criminally causing death, is compelling. A statement from the Executive as to whether it intends to legislate to amend or repeal the common law so far as it relates to corporations would be helpful.

Despite the vocal criticisms of the proposed reforms, to greater or lesser degree they are likely to become law. Prosecutions on both sides of the border will inevitably follow. What remains to be seen is whether the Scottish judiciary will seek to adopt a different approach from the courts in England to interpreting the new law. After all, whilst the Executive do not consider this to be a matter of criminal justice, the courts may disagree.

Tom Stocker is a senior associate and Fiona Clarke a solicitor in the Health and Safety team at Pinsent Masons

The Scottish Expert Group’s criticisms of the English bill

• The importation of English law negligence principles into Scots criminal law is not a welcome development
• The term “senior managers” is ill-defined, leading to a risk of endless legal argument over who was and who was not a senior manager; worse still, companies could seek to avoid liability by delegating health and safety tasks down the management chain
• The law in relation to individuals also needs to be reformed
• The offence should apply equally to public and private bodies
• A range of penalties other than fines and remedial orders should be available

Death rate and enforcement statistics

• From 2001-02 to 2004-05 fatalities to workers increased by 29% in Scotland, compared to a decrease of 12% in England & Wales
• In 2004-05, Scottish health and safety conviction rates were 55% per charge brought, compared to an English strike rate of 80% per charge brought
• As a percentage of the duty holders prosecuted, the conviction rate in Scotland is approximately 80% and in England 95%