Corporate Liability

Front 1

Issues with criminal liability for corporations

Back 1

1. Cannot be jailed.

2. Cannot be executed.

3. Actus reus? Has to be committed by an individual

4. Mens rea?

But due to many tragedies involving gross negligence of companies, it was decided that Health and Safety legislation not strong enough to punish companies sufficiently.

Front 2

First cases- Identification approach

Back 2

DPP v Kent and Sussex Contractors Ltd. Acts and state of mind of individuals controlling the company count as acts, state of mind of the company itself. Different from vicarious liability, where it's merely the companies' responsibility.

Tesco Supermarkets Ltd v Natrass. Natural persons who by articles of association/acts of directors/AGM are entrusted with exercise of powers of the company. Regional managers don't qualify. Restrictive test, criticised by Pinto as being a naieve understanding of how modern large companies work.

DPP v P&O Ferries. A company can be charged with manslaughter, but again found that the employee wasn't high up enough. Shows the drawbacks of the theory

Failures of this approach:

1. Doesn't work with omissions

2. Allows companies to escape wrongs by junior employees- Therefore only really works with small companies

3. Proceedings focus more on internal hierarchy than liability

Front 3

Organisational-Aggregation theory

Back 3

Celia Well- 'It is the whole which is judged, not the parts'.

R v British Steel PLC. Took great issue with the idea of directing mind etc.

Director General of Fair Trading v Pioneer Concrete (UK) Ltd. Liability imposed even when the lower employees had been give express instruction not to do X. Other position would give companies immunity from action.

Front 4

Statutory Construction Approach

Back 4

Meridian Global Funds Management (Asia) Ltd v Securities Commission. Matter of statutory construction. Look at each case individually. If actions could not be attributed to the company it would encourage ignorance on behalf of directors-Lord Hoffman. Reprimanded as too vague by Law Reform Commission.

Attorney General's Reference (No 2 of 1999). Train driver case. Defendant corporation could only be convicted where a human being, with whom the corporation could be identified, had the requisite mens rea. Meridian said to actually have endorsed identification theory.

Recent case of St Regis Paper Co Ltd v R endorsed Meridian, however. Also seemed to endorse identification. But important to note the intentions of the statute.

Front 5

Restrictions on Corporate Liability

Back 5

-Can't be charged for a crime which only punishment is imprisonment, ie murder

-Bigamy or perjury

-Unclear if it can counsel/procure perjury

-Corporation is the victim. Canadian Dredge and Dock Co. v R. Doesn't work if company receives benefit.

-Instructions against the crime. Doesn't change question of guilty, but may mitigate the penalty.

Front 6

Punishment

Back 6

Generally, has to be a fine. But comes with unwelcome publicity, increased insurance premia, exclusion from further procedures eg government building projects

Suggestions: Corporate death penalty

Ongoing surveillance of companies

Have in a civil law context for easier burden of proof, also vicarious liability

Front 7

Corporate Manslaughter and Homicide Act 2007 (UK)

Back 7

Had only been 3 succesful prosecutions of corporate manslaughter in English history, all with small companies.

Considers actions of senior management collectively, does not seek to identify a directing mind.

Not confined to corporations.

Front 8

Act, when does it come into effect?

Back 8

When the way in which the organisation's activities are managed causes a person's death and amounts to a 'gross breach of the relevant duty of care owed to the deceased.'

When senior management has organised its activities in such a way to amount to a substantial element of that breach.

Wider than identification theory. Still criticised as not wide enough. 'Senior management failure' rather than 'management failure'. Assessing behaviour of individuals rather than systematic failure.

Front 9

More Act criticisms

Back 9

-No ability to simultaneously try individuals for the crimes. Very messy to commence two proceedings. Allows them to hide behind culpability of companies.

Front 10

Act punishments

Back 10

1. Unlimited fine

2. Publicity orders, that the fine be published

3. Remedial orders, that they take steps to remedy the failure which caused the death.

Cotswald Geotechnical were fined an amount which put them out of business, which the court found not to be an unacceptable result.

Front 11

Irish Position.

Back 11

Superwood Holdings PLC v Sun Alliance Assurance PL, identification test was deemed appropriate in civil cases.

There has been no consideration of using it in criminal corporate liability.

Front 12

Law Reform Commission Proposals

Back 12

Paper on Corporate Killing.

Should be an offence of corporate killing. Reasons:

1. Removes uncertainty.

2. Qualitatively different to H+S legislation.

3. Marks the disapproval of the community.

4. Not just limited to the worklplace.

Front 13

Proposals scope

Back 13

Expanded beyond identification theory.

1. Would apply to all 'undertakings' not just corporations.

2. Would apply to 'high managerial agents' and not just top management.

3. Embodied concept of 'reckless tolerance'. (Must have been aware(objective) that a high degree of risk/serious injury arising from acts/omissions of another and nontheless unreasonably disregarded that risk.

4. If the higher management took all reasonable precautions, the corporation should not be found guilty.

Front 14

Corporate Manslaughter Bill 2011

Back 14

'Where an undertaking causes the death of a person by gross negligence'.

'undertaking' may be a corporation, or an unincorporated group of individuals engaged in the production, supply or distribution of goods or the provision of a service, including government/statutory services. For profit or not.

Front 15

How must it cause death by gross negligence?

Back 15

1. Owed a duty of care to deceased person.

2. Breached duty of care by failing to meet required standard of care. IE taking all reasonable measures to anticipate and prevent risks to human life, having due regard to size and circumstances of undertaking.

3. Breach of duty was of very high degree and involved significant risk of death/serious harm.

4. Breach caused the death of another human person.

Front 16

Duty?

Back 16

Factors:

1. Employer

2. Occupier of land

3. Producer of goods

4. Provider of services

Front 17

Standard of Care?

Back 17

1. Way in which activities managed by high managers.

2. Allocation of responsibility.

3. Procedural decision-making rules.

4. Policies

5. Training and supervision of employees

6. Response of undertaking to previous incidents involving risk of death/harm.

7. Stated/actual goals.

8. Adequacy of communications systems

9. Regulatory environment, statutory duties.

10. Assurance systems

11. Terms of contract/licence