Corporate Manslaughter and Corporate Homicide Bill

Public Bill Committee, 19 October 2006.

Standing Committee B

Roger Gale (Conservative, North Thanet)

Good morning, Ladies and Gentlemen.

Roger Gale (Conservative, North Thanet)

You can put the apples on my desk later.

I have a couple of housekeeping notes for the Committee. First, hon. Members have my permission to remove their jackets if they wish. Secondly, I remind the Committee that adequate notice should be given of amendments; as a general rule, Mr. Benton and I will not call starred amendments, including any starred amendments that may be reached during the afternoon sittings.

Gerry Sutcliffe (Labour, Bradford South)

I beg to move,

That—

(1) during proceedings on the Corporate Manslaughter and Corporate Homicide Bill, the Standing Committee shall (in addition to its first meeting at 9.00 a.m. on Thursday 19th October) meet—

(a) at 2.00 p.m. on Thursday 19th October;

(b) at 10.30 a.m. and 4.00 p.m. on Tuesday 24th October;

(c) at 9.00 a.m. and 2.00 p.m. on Thursday 26th October;

(d) at 10.30 a.m. and 4.00 p.m. on Tuesday 31st October;

(2) the proceedings shall be taken in the following order: Clause 1; Schedule 1; Clauses 2 to 21; Schedule 2; Clauses 22 to 24; new Clauses; new Schedules; remaining proceedings on the Bill;

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 7.00 p.m. on Tuesday 31st October.

I am glad once again, Mr. Gale, to have the opportunity to serve under your chairmanship and that of your esteemed co-Chairman, Mr. Benton. I am sure that our discussions about the Bill will be extremely constructive. I welcome the hon. Members for Beaconsfield (Mr. Grieve) and for Kingston and Surbiton (Mr. Davey); I look forward to our debates. Indeed, I welcome all members of the Committee. I hope that they agree that the motion will gives us sufficient time to enable proper scrutiny of this short but significant Bill.

I welcome the broad support for the new offence that was expressed on Second Reading, although I note that the support of the hon. Member for Beaconsfield takes the form of attempting to delete almost all of the Bill.

The Bill will create an important new offence, specifically targeting the worst health and safety breaches—those that result in death—and properly labelling them. We have considered the many ways of achieving it, but we believe that merely making additions to the regulatory framework for health and safety would not be good enough.

The Bill will create a new offence to deal adequately with the gross organisational failings that cause death, and employees and service users in both the public and the private sectors will be protected by its provisions. It also addresses the imbalances between small and large companies; in practice, the current law is truly effective only against small companies. It puts the public and private sectors on an equal footing, and it penalises companies that seek to gain competitive advantage by cutting costs on health and safety.

I look forward to the opportunity to explain more fully the purpose of the Bill, and as always I shall listen carefully to the Committee. I hope that our scrutiny will improve the Bill. I believe that it represents a good compromise in a contentious area.

Dominic Grieve (Conservative, Beaconsfield)

I thank the Minister for his kind words of welcome. I join him in welcoming you, Mr. Gale, to the Chair; I look forward to your chairmanship and that of your co-Chairman, Mr. Benton.

May I say at the outset that the programme motion is one of the few during my time in Parliament that will allow adequate time for scrutiny? I am grateful to the Government for having provided what I believe will be sufficient time, and also for the fact that we do not have internal knives, which will be very helpful in allowing us to make progress.

Finally, I can tell the Minister that although the amendments that I have tabled would constitute a substantial rewriting of the Bill, he should not assume that that indicates an intention ruthlessly to pursue such an objective. What I seek will become apparent: I wish to compare the relative complexity of what is proposed with the possible simplicity of an alternative. It was to highlight those two things that I thought it worth while tabling two brief amendments—one that would delete the rest of the Bill, and another that would give the Committee the chance to consider the possibility that there might be a better way to proceed. However, I am mindful of what the Minister said about the Government’s preferences in the matter.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I welcome you, Mr. Gale, to the Chair. It seems that you may be taking a headmasterly approach in your chairing of our meetings. I have not brought an apple today; I hope that it does not mean that I am out of order.

Roger Gale (Conservative, North Thanet)

The hon. Gentleman will be relieved to know that I have not brought my cane.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I thought that such things had been outlawed.

I thank the Minister for his welcoming remarks. I and my hon. Friend the Member for East Dunbartonshire (Jo Swinson), who will bring a Scottish dimension to our scrutiny of the Bill, look forward to a constructive series of sittings.

I am pleased that the hon. Member for Beaconsfield is on the Committee, not least because he has genuine expertise in the area, as we discovered on Second Reading. It is always good to serve on a Committee in the knowledge that at least one member has a detailed understanding. Lest the hon. Gentleman feels that that means we will bow to his authority, I assure him that we shall scrutinise his rewriting of the Bill, and the Bill itself, in equal detail. The Conservatives seemed on Second Reading to take a position that was very critical of the clumsiness of the Bill, and the hon. Gentleman made some trenchant remarks, but there was a hint of unwillingness to take action on the substantive point. We shall be interested to learn, when he tables his amendments, whether the Conservatives are interested in doing anything about the issue at stake.

Liberal Democrats certainly think that an offence of corporate manslaughter is needed. The Minister was right to say that there was a degree of consensus about that. We also feel, however, that the present proposals need to be significantly improved if we are to improve on the current legal position; I think that all hon. Members will know about its weaknesses. We particularly want to make sure that the Bill’s deterrent effect will work. The whole point of health and safety legislation and of putting an offence of this type on the statute book is to prevent accidents and deaths and to send out a clear signal. We shall judge the Bill and the amendments to it with that in mind.

I should like to welcome Labour Members to the Committee, because it is clear that they want to play an active part in the scrutiny of their Front Bench’s proposals. Judging by the amendments that they have tabled already, Mr. Gale, it appears that the Minister will be regaled—no pun intended—on all sides with efforts to ensure that the Bill fulfils its purpose. I hope that we can form some interesting cross-party coalitions, in the interest of the public.

Ian Stewart (Labour, Eccles)

Good morning, Mr. Gale. It is good to see you in the Chair—as it will be to see Mr. Benton, also. I have served under your chairmanship, and Mr. Benton’s, in previous Bill Committees; I enjoyed them and they were informative. I and my hon. Friends welcome the Bill. We heard it said on Second Reading by some commentators that the Bill does not itself do much, which is, I think, the reason for some of the amendments tabled by the official Opposition. I do not accept that. The Bill does improve the current situation. However, I and some of my hon. Friends accept that it can be improved. The purpose of our amendments and new clauses is to help in examining and probing the thinking behind the Bill, and to suggest ways of making it better.

Roger Gale (Conservative, North Thanet)

I am always fascinated as Chairman by how few of the opening remarks have anything to do with the programme motion.

Clause 1

Ian Stewart (Labour, Eccles)

I beg to move amendment No. 87, in page 1, line 3, leave out subsection (1) and insert—

‘(1) An organisation to which this section applies is guilty of an offence if—

(a) the way in which any of its activities are managed or organised—

(i) causes a person’s death,

(ii) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased, and

(b) the gross breach could have been prevented had all reasonable precautions been taken and all due diligence been exercised by all those at a senior manager level within the organisation.’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following: Amendment No. 34, in page 1, line 3, leave out from ‘if’ to end of line 5 and insert

‘a management failure by the organisation’.

Government amendments Nos. 1 to 4.

Amendment No. 35, in page 1, line 16, leave out paragraph (a).

Government amendment No. 5

Clause 2 stand part.

Amendment No. 76, in title, line 3, after ‘homicide;’, insert

‘to make provision for orders to encourage remedial action; to create an offence of causing death which was preventable by better corporate organisation or management;’.

I should perhaps, for clarification, explain why we are taking clause 2 stand part now. The group of amendments effectively relates to clause 2 as well as clause 1 and, were they to be carried, clause 2 would not exist.

As a matter of guidance to the Committee, those who have not served under my chairmanship before will probably be unaware that I am more than willing to have a stand part debate at the start of a clause, if that facilitates debate, rather than at the end, but I do not propose to have both. It is for the Committee to decide whether it would be beneficial to have a broad-ranging debate on a first group of amendments, which may be considerable—as this one is. That would be perfectly acceptable, on the strict understanding that you cannot have your cake and eat it later.

Ian Stewart (Labour, Eccles)

The amendment goes to the heart of what the Bill is intended to do, as identified by the Opposition and others. Currently, there can be individual responsibility for manslaughter, but as soon as we move on to address the corporate issue, a fundamental question arises: who represents the corporation? The corporation cannot be found guilty and put in prison. That is the core of the argument about the Bill and whether it is complete.

Subsection (1)(a) of the amendment is straightforward and speaks for itself; the company is guilty if activities “managed or organised” on its behalf cause a person’s death. Subsection (1)(b) of the amendment identifies the important concept of the relevant duty of care owed by the organisation, not only the individual, to anybody who has been killed. The “gross breach” has to be identified as having been preventable. That raises the question of who could have prevented it.

Is the responsibility an individual or corporate one? The amendment seeks to introduce those concepts so that we can move on to establishing who would be responsible on behalf of the corporation. The concept of due diligence is important in identifying that corporate responsibility.

Gerry Sutcliffe (Labour, Bradford South)

At this early stage, I should like to state the Government’s position. The argument is not about who but how; the Bill is about how an organisation has contributed to that corporate manslaughter, not who has.

Ian Stewart (Labour, Eccles)

That is helpful. I do not disagree with that. You will see from our amendments and new clauses, Mr. Gale, that the “who” follows what the Minister says. The problem is that the Bill does not move on to the “who”, and that is why we have tabled the amendments.

Dominic Grieve (Conservative, Beaconsfield)

We have come quickly to one of the hearts of the issue. How can we fix corporate liability within organisations? How can we move away from the current position on corporate and individual manslaughter? That requires such a high test to be passed that prosecution of corporations is extremely difficult unless one can effectively show that the individual director of the relevant corporation had a level of responsibility sufficient to fix him personally with a manslaughter conviction.

We have to be careful because, understandably, the public often wish to see people punished for accidents that cause death. However, as the hon. Member for Eccles (Ian Stewart) knows, one of the problems that the Government had at the outset was whether it was possible to alter the test of corporate manslaughter and still include individual liability. We may come back to that later in our consideration of the Bill, but my broad view has always been that we should be cautious about doing that and I think the Government’s approach is correct.

If we accept the principle that individuals should not be fixed with liability, even as directors of corporations, so that they should not be sent to prison—this is the key issue—it is, if I may use the expression, permissible to start to look at how we can beef up the legislation to make it easier to convict corporations. That is what the hon. Gentleman is talking about. In tabling amendment No. 87, he has sought, along with his colleagues, to try to focus the Committee’s mind on what we allege should cause a person’s death and the extent of the default that would be required of the organisation before it would be fixed with criminal responsibility. To be frank, the hon. Gentleman’s amendments, mine, which we can come on to, and the Minister’s are all trying to tinker with the same issue.

I have reservations about the way in which the Bill is drafted. The definition of what constitutes a senior manager must mean that only failures at senior management level that lead to death will be sufficient to fix criminal responsibility on the corporation. That is in stark contrast to the Health and Safety at Work, etc. Act 1974, where section 2 provides a general duty on employers to look after the health and safety of their employees at work by taking all reasonably practicable steps. If an accident happens, the burden is on the employer to show that he did everything reasonably practicable to prevent it. That usually requires an exercise on the part of the prosecution, or perhaps the corporation’s or employer’s lawyers, of running through a list saying what was done from top to bottom to ensure safety on the work floor.

What frequently happens, in my experience, is not that the senior manager is directly responsible for the accident but that the chain from top to bottom has a number of chinks in it that mean that the safety culture does not percolate from the director to the floor, such that one certainly cannot say that the poor senior director is directly responsible. I say poor because I have some sympathy with such senior directors, although, of course, one might sometimes find that they are responsible, and I have come across some unpleasant cases in my time that have made my hair stand on end. But generally there are a series of contributory causes, as is so often the case in accidents.

We must aim to beef up the safety culture. I think that the expression that was used in the Health and Safety Executive was, “You have to walk the talk.”

Ian Stewart (Labour, Eccles)

The hon. Gentleman has laid out the lines of responsibility clearly. However, does he accept that the test for corporate responsibility might not be proven but as things stand an individual could still have responsibility for manslaughter? Is it not dangerous for us to remove one and have the other?

Dominic Grieve (Conservative, Beaconsfield)

As matters stand, the Bill does not interfere with the law of manslaughter. If an individual kills another person by gross negligence, he can still be indicted for manslaughter. It is difficult to pick an example. Let us suppose that the director of a building company goes on to a site and, seeing that a wall is manifestly in an unstable and dangerous condition, tells one of his 17-year-old apprentices to take a sledgehammer and smash out some of the bottom bricks to make a hole. If the wall were to collapse on the apprentice’s head, although we would need to examine all the facts it seems to me that that director would be liable to prosecution for manslaughter. Nothing in the Bill will make any difference to that, which does not trouble me.

The traditional test of manslaughter is the same for a corporation as for an individual, but it is harder to get at a corporation as it must be shown that the directing minds are guilty of the offence. I am in favour of moving away from that principle, but I wish to fly a flag that I will be unhappy if the hon. Gentleman says at a later stage of our deliberations that he wishes personal responsibility to be fixed on directors on the same basis as those directly responsible and the directors therefore sent to prison. If we are to focus merely on corporations, as I believe we should, the hon. Gentleman’s amendment makes a great deal of sense. I am not sure whether mine does, but it would take us in the same direction. I will listen to what the Minister has to say, but he will be pleased to hear that I believe his amendment might make even more sense than mine or that of the hon. Gentleman.

Gerry Sutcliffe (Labour, Bradford South)

That is a good start.

Dominic Grieve (Conservative, Beaconsfield)

It is a good start. I am in favour of what we are trying to do. If I understand the Government amendment correctly, they are attempting to move away from the direct fixing of a senior management decision and towards a senior management failure being a substantial cause of the accident. That goes a long way towards answering my point about the chain of causation.

We must face the fact that accidents happen for a variety of reasons, and often because the person killed does something stupid. Part of the safety culture that we must create is protecting people from their own mistakes. I shall give the hon. Member for Eccles an example of a dreadful case that I once worked on. Two employees were sent to the top of a dome in an oil refinery. There was a plug in the dome and they were told to remove the tangs securing it to the sides. They stood on the plug while they removed the tangs, thinking that the plug was inserted so that it could not fall through, but the moment the last tang was removed, one of them fell 100 ft to his death. The company was prosecuted under the 1974 Act and pleaded guilty. There were subcontractors on site and repair work was taking place.

The case might not have been suitable for a corporate manslaughter prosecution, either under the Minister’s proposals or the previous provisions, butthe truth is that there was a failure to acquaint the employees with the risk and there was an assumption that they would understand it. That failure ran from the top to the bottom of the organisation. The decisions taken on site had nothing to do with senior management, but it could be argued that to establish a safety culture, senior management should have examined the way in which their junior management were managing employees. I emphasise again thatthe case might not be suitable for a corporate manslaughter prosecution, but such examples are important. If the Minister is trying to tweak the law, as I believe he is, to enable a jury better to examine an organisation from top to bottom, that is a sensible approach when dealing with the responsibilities of a corporation.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

We have a veritable menu of alternatives before us. Concerns about the original phrasing of the senior management test were expressed on Second Reading and in the briefings that we have received. The first point of concern is that the problem experienced under the previous legislation of identifying an individual—working out which senior managers were involved—would remain. I am not yet sure whether the Bill deals with that.

There is also a problem of perverse incentive. Senior managers might be advised by a good corporate lawyer it would be reasonable to move responsibility for all health and safety issues down to the lowest point, thereby avoiding any potential future prosecution for corporate manslaughter. That would be a retrograde step both for health and safety and for the desire to amend current problems in the law.

Concern was also expressed that the Bill would not deal with the small-large issue. Under existing law, small companies tend to be caught and larger companies tend to avoid prosecution.

Those are the type of tests we need to look at when considering the options before us, including the Government amendment. I am pleased that the Government have moved their position and like the hon. Member for Beaconsfield, I think they are moving in the right direction, but we will certainly probe the Minister, particularly after he has spoken to the Government amendment.

The amendment tabled by the hon. Member for Eccles and his hon. Friends has some attractions. It seems a sensible idea to introduce the notions, well known to many corporate bodies, of reasonable precautions and due diligence. Several of those who responded to the consultation thought that was the way to go—indeed, the British Retail Consortium thought that introducing a due diligence test was sensible because it would establish that senior management, when organising a company, ought to demonstrate due diligence in more than just financial matters. A due diligence test would be understood by senior managers. It would not necessarily require them to be actively involved in an incident or the causation to be absolutely clear; instead, it would reflect an idea of corporate culture. That has some merit.

My only concern about amendment No. 87 centres on the ultimate sentence:

“all due diligence been exercised by all those at a senior manager level within the organisation”.

That seems a very hard test to pass because all senior managers would have to be identified in order to check whether or not they had taken reasonable precautions or demonstrated due diligence. That may be something we can come back to—I am sure it is not a hard and fast aspect of the hon. Gentleman’s intentions. It will be interesting to see whether the Minister has any guidance give us on that because it does not seem to take us in the direction that the hon. Member for Eccles wishes to go, despite the other merits of his amendment.

By chance, my hon. Friend and I tabled the same amendment as the hon. Member for Beaconsfield did—perhaps we read the same brief that was sent by e-mail. However, my hon. Friend and I intended to focus more on management. There is a balance to be struck. I cannot speak with the same legal experience as the hon. Gentleman has, but it seems to me that on the one hand we want to ensure that the whole corporation acts in the best interests of health and safety and takes these matters seriously, and that that should be part of the culture; but on the other hand, we should not expect a corporation to be guilty of corporate manslaughter if a very junior person makes a mistake. Such a mistake needs to be dealt with in isolation so it does not have an effect on the reputation of the whole company. It is a question of balance and how we can achieve that.

I argue that amendments Nos. 34 and 35 get the balance right, because the natural, common-sense understanding of the term “management” would exclude the idea that a very junior operative could create a situation in which the whole corporation was deemed to be guilty of the offence. I believe that, if a case was being prosecuted in a court of law, reasonable people would understand what was meant by management failure and could make those decisions. By restricting the provision to senior managers, we still have the problem identified with the Government’s original wording.

I want to deal with the Government amendments when the Minister has spoken to them, if I catch your eye, Mr. Gale.

Jim McGovern (Labour, Dundee West)

Does the hon. Gentleman share my concern that a company could make itself almost corporate manslaughter-proof by devolving all health and safety responsibilities to the most junior management level?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am concerned that the original phraseology would have had that effect—indeed, I am sure that it would have done. The Select Committees that considered the draft Bill found from some of the evidence that they took that corporations were doing precisely that, in anticipation of the legislation.

Dominic Grieve (Conservative, Beaconsfield)

I am not sure that I entirely agree with the hon. Gentleman on that point, because even under the original wording, if senior management devolved all their responsibilities downwards, that would be the failure in itself. It seems to me that the new wording, wherever it comes from, but perhaps particularly if comes from the Government, will knock on the head even a suggestion of being able to mount that defence.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I disagree. I think that the original wording did have that problem, and the evidence presented to the Select Committees shows that that was the case. Corporations were acting in anticipation of the legislation. It would have been a reasonable defence to say, “Well one size does not fit all when you have a number of factories throughout the country. It is totally reasonable that an individual in each of the company’s 15 or 20 factories should take responsibility for health and safety at that site. It has nothing to do with the directors.” That could have been a reasonable defence, so there would have been the perverse incentive that the hon. Member for Eccles and many others were worried about. The hon. Gentleman is right to say that the amendments before us begin to address that weakness.

My point is that amendments Nos. 34 and 35, which are less restrictive in the definition of management by not attaching the word “senior” to it, are the sort of provision to which an ordinary jury would react seriously and properly. I am concerned that if we retain the qualification of “senior”, we will not achieve the effects that we are trying to achieve. Such a qualification will create greater complexity. The process of identifying exactly who was a senior manager will be part of the debate in the court, lengthening the proceedings and making it much more difficult to secure the prosecutions that we know ought to have happened in the past but have not happened because of previous legal complexities.

With those introductory remarks, I hope that the Minister can try to persuade us that the solution he has come up with is better than the solutions the rest of us have come up with.

Tony Lloyd (Labour, Manchester Central)

Despite never having served in one of your Committees before, Mr. Gale, I, too, pay tribute to your chairmanship.

The debate has been interesting in that there is a degree of consensus on what we are trying to achieve with the clause. We can and we certainly will debate later whether we should separate corporate responsibility from individual responsibility. There is a major issue about whether, when death is caused in the workplace or similar, we ought to recognise that both the corporate body and individuals should be liable. However, there is consensus on our aim, which is to remedy a gap in the law which allowed some headline cases and, as important, many cases that did not achieve public notice of failure to prosecute corporations for manslaughter.

The debate has centred on how we approach the matter. One of the most notable cases of failure to prosecute related to the sinking of the Herald of Free Enterprise. The controlling minds of the company simply failed in their duty to provide the proper health and safety culture to which the hon. Member for Beaconsfield referred. It is astonishing that no prosecution was possible under existing law. We must ensure that what we introduce is sufficient to ensure that such cases will lead to corporate prosecution. I believe that there should have been individual prosecution in that case because there was clear individual failure at senior level in that company, but we must ensure that the gap is closed so that corporate prosecution is possible.

The concept of due diligence is attractive to me, in part because it is already well defined and in part because the courts recognise failure to operate with due diligence. That is well established in case law. The courts understand it and the public understand it. It is something on which common sense and judicial practice come together. That is important in efforts to create a health and safety culture, which are not helped if laws are difficult for management and those who work in organisations to interpret, even if the courts properly understand what the law says. It will be best if the legislation is never used because it has driven forward the health and safety culture and changed the way in which organisations operate. I urge the Minister to accept the concept of due diligence because that is important.

I want to press the Minister on the debate that the hon. Members for Kingston and Surbiton and for Beaconsfield have opened up a little, on the application of the Government amendments. There is concern about the emphasis on the role of senior management and particularly that of senior managers when making decisions on how the whole or a substantial part of a company’s activities are to be managed. That goes to the nub of how the legislation will operate in practice. The concern is that because of the definition of“a substantial part”, in large organisations with a complex structure the failure in a relatively small part of the organisation could allow a defence at the top level—the controlling mind level. Senior management could simply say, “We are the senior managers in control of the whole or a substantial part of the organisation, but we are clearly not responsible for an issue that should and could adequately have been dealt within a lower part of the organisation.” It would not be possible to prosecute the smaller part of the organisation because it does not have corporate existence and those responsible at that level would not meet the senior management test.

The hon. Member for Beaconsfield said that it would not be possible to delegate health and safety on that basis, so failure in a division of the corporation would still be the responsibility of the most senior management because of the due diligence test. Even if that is the case, I would still prefer to see the phrase due diligence in the Bill, because it makes the relationship between senior management and those who operate parts of the organisation absolutely clear. The concern is that, in their own defence, senior management could say, “Yes, of course we are the controlling minds of the company. We are the ones who control the whole or some central parts of the organisation’s decision-making, but this took place at a level below that for which we could be held responsible.”

Dominic Grieve (Conservative, Beaconsfield)

Clearly, some delegation must be permissible. No organisation can operate without delegation. If an organisation delegates down to the junior management level in a responsible fashion and it is a junior manager who, having been properly trained and told what his duties and responsibilities are, makes a mistake, it would be wrong if the company were to be fixed with a corporate manslaughter conviction.

The point that I was making earlier to the hon. Member for Kingston and Surbiton was that the idea that a corporation could be run without at least one director being responsible for health and safety is extraordinary. If an accident occurred and the directors all said, “We’ve got a wonderful new system in this company. We’ve delegated all health and safety responsibility away from senior management level,” that argument would not, I hope, get very far in court, because all corporations must have a director with a specific health and safety responsibility—[Interruption.] The hon. Member for Kingston and Surbiton shakes his head. I accept that legally there might be no such obligation, but the idea that a corporation would survive a prosecution for corporate manslaughter if it had not appointed such a director is fantasy. In the same way, under the 1974 Act, if a large company were to say, “Well, actually, at director level we’ve got nobody responsible for health and safety at all”, it would be taken to pieces in court.

Roger Gale (Conservative, North Thanet)

Order. I require Front Benchers to set an example. Interventions are interventions.

Tony Lloyd (Labour, Manchester Central)

In fairness, Mr. Gale, that was a useful intervention, because we are collectively getting to the nub of the argument. In any health and safety regime there must be a defence available for the most senior management. I believe that we ought to have a health and safety director, just as we have nominated finance directors of incorporated bodies. In any health and safety regime there would have to be a legitimate defence available to the health and safety director—that controlling mind. Such a person ought to be able to argue that he took all reasonable care and operated with due diligence, and there was a health and safety regime that ought to have worked, but those down the organisation failed by neglect properly to implement the policy that the controlling mind had set. That must always be a proper defence available.

The problem is not whether that is the case; it is more subtle. As the hon. Member for Beaconsfield, with his long experience of health and safety matters, knows, as do those of us who see the issue from the other side, there are grey areas and cases are often not clear cut. Of course there are cases when the safety guard is taken off the shredding machine and an individual goes in. I have come across such cases. They involve clear breaches and it is obvious what should happen, but they are not the norm.

The normal health and safety breach is much more subtle, and it is much more difficult to pinpoint exactly where in the organisation things have gone wrong. It is therefore much more difficult to say whether there should be a defence for directors at the most senior level that something had been delegated reasonably to a lower level within the organisation, precisely because those who might have that delegation thrust upon them would not be covered by the test that the clause establishes.

That is the difficulty with the Government amendments. I am totally on board with what my hon. Friend the Minister is attempting to achieve. I know what he has said privately and I have a good suspicion of what he will say to us in a few moments. There is no difference between us on what we are trying to achieve. The debate is about what form of words is adequate to ensure that, when such cases come to court and common sense says that corporate guilt should be proven, that is what happens.

The case of the Herald of Free Enterprise might not be a good example, but the official inquiry talked about the company being riddled with the disease of sloppiness through and through. Nevertheless, under this clause the most senior manager may have had a defence even if they admitted to being sloppy, incompetent and useless, because of the large organisation under which the Herald of Free Enterprise worked. I believe that it was owned by a subsidiary of P&O, which was itself a subsidiary of a larger organisation. That cascading of companies would have allowed the most senior management to say, “No, this most certainly resided below us because we are merely a corporate holding operation,” while at a junior level people could say, “We are clearly not the controlling minds or even the controllers of a central part of the corporate mind.” That is a real concern.

Jim McGovern (Labour, Dundee West)

Perhaps I can help my hon. Friend by giving another example. The judge in the case of the Hatfield train crash said that it was one of the worst cases of industrial negligence that he had ever come across, but he ruled that there was insufficient evidence to prosecute anyone for corporate manslaughter or under any health and safety legislation.

Tony Lloyd (Labour, Manchester Central)

My hon. Friend is right. That is the gap that we are trying to plug to ensure that we do not have cases such as Hatfield and the Herald of Free Enterprise.

There is no difference between the Minister, hon. Members who have spoken on this and me on what we are trying to achieve. We are talking not about the narrowness of definition, because definition is all-important, but whether within that definition we allow wriggle room for those we want to prosecute successfully. We want to ensure that there is no easy escape for such people. Of course, Hatfield and the Herald of Free Enterprise were the large and celebrated cases, but there are many other cases for which we need to ensure that the law works properly.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I welcome you to the Chair, Mr. Gale. I am glad to follow the hon. Member for Manchester, Central(Tony Lloyd) because I want to address his point about the wording of the Government amendments. I am specifically concerned about the word “substantial” in Government amendments Nos. 3 and 5. Precisely what does the Minister mean by substantial? As a former practising barrister, I know that my former colleagues will look forward to arguing over exactly what that means, and he may be able to cut short that argument today.

It seems to me that there are two possible definitions: a large part of what the company does, and a more than insignificant part of what the company does. There is a distinction between those two definitions, and I hope that the Minister will tell us which interpretation he would put on the word. That is important for the reasons that the hon. Member for Manchester, Central has given: when one looks at a large company with many different branches—a large national or international supermarket chain, for example—it is important to know whether the substantial element of management failure can be allocated to the management of the entire international corporation or the management of the group of stores or the store itself. I hope that the Minister can provide some clarity regarding the definition.

James Brokenshire (Conservative, Hornchurch)

I should first declare an interest as a non-practising solicitor, albeit that this is outside my area of expertise or knowledge, unlike several of my colleagues present.

I want to develop the point that my hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) highlighted about this aspect of the management of activities and whether it means activities as a whole. On Second Reading, I made a point that was taken up by the hon. Member for Manchester, Central about the structure and organisation of corporates, which I would like to develop a little further. Clearly, large organisations organise themselves in various ways, and it is not inconceivable that a large holding company might have a raft of subsidiaries and intermediate holding companies beneath it. A particular activity may be isolated in a subsidiary that is several levels removed from the ultimate holding company. If some action that is manifestly wrong or failure in systems or management occurs at the subsidiary company level, how do we read the amendments and interpret the clause to determine whether the organisation that is referred to in the clause is the subsidiary or the ultimate holding company further up the chain, or to determine whether it is appropriate in any event for the directors or management of the holding company to be liable? There may be a local management and a separate board of directors for the subsidiary company—it may not be the same as the board of directors at the holding company level or at various levels in between.

It is this complexity that we struggle with in many respects. When the bereaved of the deceased person argue for justice, they are probably looking a bit further up the chain than the local management. We must strike a balance between what is right and appropriate in terms of ultimate culpability, and the desire for justice to be seen to be done.

The other aspect of the issue is that it is not inconceivable that a subsidiary may be a relatively small operation. It may have a small number of employees and only a limited management but still be part of a large group. If an unlimited fine is sanctioned against the subsidiary—a fine is levied against that individual corporate body as a legal person—the subsidiary’s resources may not be sufficient to meet it. The question then is whether the overall group allows the subsidiary merely to become insolvent and to default—ultimately, the fine is not paid and the business shuts down—or whether there is any mechanism for making the intermediate holding companies and companies up the chain in some way bear responsibility and at least pay the fine.

Tony Lloyd (Labour, Manchester Central)

That is an important point. The clause as amended by the Government would most certainly cover offshore ownership, as there is no test of individuals or locations. Nevertheless, the hon. Gentleman’s point is interesting, because an offshore company could easily evade responsibility—even for unlimited fines—in a way that a subsidiary could not. As he said, if the subsidiary is insolvent, there would be a long and difficult chase to find recompense from the offshore owners.

James Brokenshire (Conservative, Hornchurch)

The hon. Gentleman’s point is clear. It comes back to the references in clause 1(1) to an organisation

“to which this section applies”

and then

“amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.”

In effect, a holding company may merely hold shares in an intermediate holding company that in turn holds shares in the subsidiary company where the problem has actually occurred. We need some clarification of the language. For example, does the holding company owe a duty of care if it is just an investment company that does not necessarily play an active role in the management at the local level? These complexities are difficult—I am not saying that they are not. It is those issues that we struggle with when we try to strike a balance between a desire to seek justice and the need for working legal constructs.

It will be interesting to hear how the Government view those issues. We will be able to reflect on what the Minister says and refer to it in any subsequent comments that we make in the debate.

Ann McKechin (Labour, Glasgow North)

I, too, would like to question the Government on their amendments Nos. 3 and 5. The Minister will recall that on Second Reading my hon. Friend the Member for Lanark and Hamilton, East (Mr. Hood) referred to the case of the Larkhall explosion in his constituency six years ago—commonly known as the Transco case. The key element in the case was the fact that a failure of management occurred over a fairly long period, when the company changed its identity. Three separate management failures were identified, which cumulatively resulted in the tragic death of the family in Larkhall.

Does the Minister consider that the clauses would permit the courts to consider the issue of aggregation—that is, could the organisation or company be guilty if the relevant acts were done by a number of different office-holders at different times, but were sufficient, considered together, to constitute an offence? In view of what the hon. Member for Hornchurch (James Brokenshire) has said, and given the complexities of corporations nowadays and the way in which ownership is transferred over time, it is particularly important to note that management failures are not necessarily of a moment. They can take place over time, and it is essential that that aspect of the law should be covered.

Gerry Sutcliffe (Labour, Bradford South)

This is not a unique occasion. I have worked on several Bills on which there was general consensus, when hon. Members were driven by the need to reach a workable solution, rather than, as happened with some other Bills, a clear political divide, when they wanted to knock spots off each other politically. I do not see that happening in this Committee, because, clearly, there is a wealth of expertise here. I pay tribute to the hon. Member for Beaconsfield for his history in this regard. I shall say at the outset that I am not a lawyer, although, of course, there are many on the Committee. I shall, like the hon. Member for Kingston and Surbiton, continue to develop my arguments with a degree of strength and severity similar to theirs, to get my points across. The spirit in which the debate on the liability test has been conducted is useful. I am grateful for the spirit in which the amendments have been debated.

The key reason for reforming the law is the failure of the current test of liability—the directing mind principle—to reflect the way in which modern organisations are run. The principle requires a directing mind—an individual senior enough to be said to embody the company inhis actions or decisions—to be guilty personally of manslaughter. That means that unless a such an individual can be linked directly to the cause of the death and shown to be grossly negligent, an organisation cannot be found guilty of manslaughter, no matter how negligently the company was run and how poor its approach to health and safety.

We need to ensure that the new test will mean that gross failures that are properly the responsibility of the organisation can form the basis of liability, but that not every work-related death will result in a conviction for manslaughter, even where there has been gross negligence by some individuals. For example, courts must be able to convict companies in which little or no thought has been given to health and safety or to safe systems of work. However, as hon. Members have said, companies should not be blamed where individuals have behaved in grossly negligent ways outside good and safe processes. The test must properly capture corporate failures, not individual ones.

A couple of hon. Members, in particular the hon. Member for Kingston and Surbiton, have mentioned perverse incentives to devolve matters down to other organisations or management levels. I am quite heartened by the fact that 79 per cent. of respondents to a Health and Safety Executive survey of people in private sector organisations reported that health and safety was directed at board level. That figure is up by 58 per cent. from the previous survey in 2001. One of the top four reasons given for the board-level direction is the prospect of the new offence of corporate manslaughter. To return to the point made by my hon. Friend the Member for Manchester, Central, we are, in effect, trying to create a law that we hope will be redundant. We want a change in the culture.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Will the Minister confirm that as a result of that same research the Health and Safety Executive found that

“in relationship to those companies that had delegated responsibility down, one of the main reasons why the companies had done that was because of the forthcoming corporate manslaughter legislation.”

So there is a perverse incentive, even though he is correct to say that other companies have reacted positively.

Gerry Sutcliffe (Labour, Bradford South)

If I had read on, I would have made that point. I was trying to explain where there has been a shift in attitude, but I accept the hon. Gentleman’s point. Alongside the introduction of this Bill, we have to continue the excellent work that has been done to promote health and safety cultures. In my previous existence as the Minister with responsibility for employment and employment law, I was happy to discuss such issues with many members of this Committee.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The Minister may say that we shall do this as our work goes on, but my concern is that good companies, which already have good health and safety records, will have appointed a director in anticipation of the legislation, but the ones likely to be problem companies in the future are delegating down. The companies that we need to catch in legislation, always the minor ones, are reacting in the wrong way. That is the real concern.

Gerry Sutcliffe (Labour, Bradford South)

It is a concern, but I still think that we can introduce a combination of measures in addition to the legislation that we have passed. We shall certainly home in on companies that are not performing well.

I was making the point that the concept of a rogue employer was close to my heart in my previous existence. I remember writing to the director general of the Confederation of British Industry to ask what his definition of a rogue employer was. It took some time—in fact, a good few months—to get a response, and I had to remind him. He wrote back to say that a rogue employer was one that did not pay the national minimum wage. Clearly, that is not acceptable. Since then, we have seen in the corporate culture an awareness of the impact of individuals in companies. How often do we hear the phrase, “the company’s success is down to how we treat our people”? That culture is developing. Good, fair businesses want to make sure that rogue employers are no longer part of the economic climate.

I am sorry for drifting away, Mr. Gale. Getting back to the amendments, the Government’s intention has always been to find a test that works. Our starting point was the excellent work of the Law Commission, which, as I said to my hon. Friend the Member for Manchester, Central, proposed a test that fundamentally changed the question from “Who caused the death?” to “How was the death caused?” Our concern about that, however, was that it was not sufficiently clear that the failings were those of the organisation as a whole. That is why we introduced the senior manager test, which captured failings in the strategic management of activities where there had been inadequate systems or practices in the organisation as a whole.

The many criticisms of the senior manager test voiced by, among others, the scrutiny Committee, and the amendments tabled in this Committee show that others do not share our view that that test would work. The main concern is that the test would only slightly widen the current identification principle, requiring individual senior managers to be identified as personally guilty of gross negligence.

It is important that the new offence commands public confidence. We recognise that the senior manager test does not. The scrutiny Committee recommends reverting to the Law Commission’s original test—of gross management failings—with a specific provision to deal with a concern that failings at a solely junior level could form the basis for liability.

Government amendments Nos. 1 to 5 replace the senior manager test with a new test for liability, much along the lines of the recommendations of the scrutiny Committee. I was heartened to hear the hon. Member for Beaconsfield say that he thought I was heading in the right direction; I hope that I shall not make matters worse by explaining what we are going to do. The new test would remove the need to find gross negligence in the way in which senior managers managed or organised a particular activity. It would be framed explicitly in terms of how the activity was managed or organised by the organisation—and by that we mean the organisation as a whole. Prosecution will be based on evidence of how the death occurred by reference to how the activity was managed at all levels, including the senior level.

Government amendments Nos. 1 and 2 would achieve that. Government amendment No. 2 removes the requirement to look at how the activity in question was managed by senior managers. Amendment No. 1, which would remove the words “any of” in relation to the activities in question, may need a little further clarification. The test is intended to examine how the activity was managed at all levels. Leaving “any of” in clause 1(1) would mean that there was a risk that certain parts of how any activity was managed could be looked at in isolation, and that management at one level could be looked at in isolation. Deleting “any of” will remove that risk, but it does not mean that the prosecution will have to consider how all of the organisation’s activities were managed or organised. That is because the activities involved in the offence are the ones that caused the death and involved the breach of the duty of care. The starting point for the offence is how an activity was managed, judged in terms of management of the organisation as a whole. As the hon. Member for Beaconsfield said, we all seem to agree that that is the right starting point.

The Government amendments remove the need for amendments Nos. 34 and 35. We believe that the amended subsection (1) would, on its own, mean that the management of health and safety at the senior level would have to be lacking before the organisation as a whole could be found guilty. That is because the question will be whether the organisation overall was grossly negligent, and it is difficult to see how the organisation overall could be guilty if the senior management were diligent in their approach to health and safety.

We have to recognise that the offence has worried businesses and other organisations that take a conscientious approach to health and safety. One of the key worries has been that liability for the offence is out of the control of their senior managers. We do not want the offence to make good companies fearful and risk averse. Without certainty in the Bill, we will not allay those fears.

As it would be entirely clear that the test must look at how the activities were managed at all levels, and that solely junior failings could not form a basis for liability, the new test would put on the face of the Bill a requirement that the failures must include ones at senior level. We do not think that it is right that an organisation could be guilty if there was only a minimal element of senior management failure in the gross breach.

Tony Lloyd (Labour, Manchester Central)

For the sake of the record, will the Minister make it clear that gross breach by senior management would cover both the omission of policy and organisational structure as well as their commission? It can never be a defence to say, “We didn’t get round to it.” I know that my hon. Friend will agree with that, but it would be helpful to have it on the record.

Gerry Sutcliffe (Labour, Bradford South)

Clearly the courts would consider that. They would ask what the failure was and at what level it took place, and how the death occurred. That consideration would include my hon. Friend’s suggestion.

Dominic Grieve (Conservative, Beaconsfield)

It seems to me that that very point is inherent in clause 9, “Factors for the jury”. That may be of some assistance to the hon. Member for Manchester, Central. The factors that are laid out in that clause, including the extent to which the 1974 Act and its regulations are being complied with, ought to prevent senior managers getting off the hook. They will have to show that they are following best practice.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to the hon. Gentleman for clarifying that point. I hope that it satisfies my hon. Friend.

The amendments tabled by my hon. Friends are aimed at encouraging better corporate governance, which is a sentiment that I wholeheartedly support. However, we do not think it is right that simply not taking all reasonable steps could lead to liability; that seems too harsh a basis on which to rest liability for manslaughter. The Government amendments would require the failings at senior management level to have played a substantial role—we shall come back to what substantial means shortly—in the breach. We think that Government amendment No. 3 achieves that.

At this point, let me make something absolutely clear. Amendment No. 3 does not require the prosecution to identify individual senior managers and prove their failures. In many cases that may be an important part of the evidence and the prosecution’s case. Where the evidence shows that senior management as a group failed to put in place safe systems and to ensure that they were adhered to, there will be no need to show that each individual senior manager failed to have a safe system in place. The prosecution will need to show only that there was no safe system where there should have been one. The ability to look generally at senior management is reinforced by moving from references to senior managers to references to senior management. Together they remove entirely the risk of the identification principle being read back into the Bill.

There has also been an accusation that by making senior management failures part of the test, we will somehow encourage senior managers to delegate responsibility for health and safety—a point made by the hon. Member for Kingston and Surbiton. That is clearly wrong. The new test reinforces the Government’s message that health and safety should be led from the top of organisations. Only companies whose senior managers take seriously their responsibility for health and safety can be sure of avoiding liability for prosecution for the offence.

Amendments Nos. 4 and 5 will replace the current definition of “senior managers” in clause 2 with a new definition of “senior management” in clause 1. Senior management is defined in the amendment as those persons who play a significant role in managing a substantial part of an organisation’s activities. By “significant role” we mean one that influences the way in which decisions are taken and management is conducted. By “substantial part” of an organisation, I mean a large part. What that will mean to any particular organisation will depend on its size and nature. The definitions are intended to capture the level of management that has overall responsibility for the way in which an organisation manages or organises an activity.

For investigators, prosecutors and ultimately jurors, the questions to ask will be “How did a death occur?”, “What failures by the organisation led to it?” and “Did failures at a senior level play a substantial role?” Government amendments Nos. 1 to 5 will replace the widely criticised senior manager test with a workable test for liability and, as you have said, Mr. Gale, make clause 2 unnecessary.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

My point touches on the one made by the hon. Member for Rugby and Kenilworth on the meaning of “substantial”. The Minister has just said that that will mean a large part of an organisation. That seems a more natural use of the word than that used in criminal law, where substantial is widely understood to mean “more than trivial”. I wish to be clear on the matter; it is crucial, as the hon. Gentleman said.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful for that intervention, and I shall address the matter in greater detail. I wonder whether the hon. Gentleman aspires to become a lawyer.

It was suggested that business will want a due diligence test as well. Managers of organisations can be confident that if they are duly diligent in their approach to health and safety, their organisation will not be found guilty of manslaughter. That is clear in the new test. To spell it out in the Bill would suggest that anything short of senior managers taking all reasonable steps could be enough for an organisation to be found guilty. The offence is about gross negligence, and a lack of due diligence is not a high enough threshold for an offence as serious as manslaughter.

Exactly who counts as a senior manager will depend on the nature and scale of an organisation’s activities. The definition is intended to cover those who take decisions about how the whole or a substantial part of a corporation’s activities are run, including regional managers in national organisations and the managers of operational divisions. It will be for a jury to decide whether a person is a senior manager. On the meaning of substantial, raised by the hon. Member for Rugby and Kenilworth, we do not believe that there is any ambiguity, considering the word’s natural meaning. It is clear in clause 1 that substantial will mean large, noteworthy and so on, rather than just more than minimal. The hon. Gentleman might know the context of that definition better than I do because of his expertise.

The issue of holding companies was raised by the hon. Member for Hornchurch, but we believe that it is something of a distraction. I know that that was not his intention. A subsidiary company owes a duty of care and can be prosecuted. The parent company is a separate entity, and just as individuals cannot be convicted for the acts of others, neither can companies. That is not new; it is how the law currently works. Notably, in the Hatfield case the subsidiary of Balfour Beatty was prosecuted.

Tony Lloyd (Labour, Manchester Central)

I hope that the Minister will reflect on what he has just said. We know that an increasing number of equity-owning companies operate offshore in our economy. That is a perfectly normal process, whether or not it is good. We are considering the most extreme cases, for which fines can be unlimited and could be enormous. There is significance in the point made by the hon. Member for Hornchurch about the possibility of a holding company avoiding liability simply by making a subsidiary bankrupt. That is not a divergence, but concerns a real and important measure that undermines the impact of the legislation.

Gerry Sutcliffe (Labour, Bradford South)

My hon. Friend raises an interesting point, and I should like some time to consider the likely impact, although I may have an answer on it fairly quickly. The point has been made about Balfour Beatty and its subsidiary. I will consider with interest my hon. Friend’s comments, and I will come back to the Committee on this point.

My hon. Friend the Member for Glasgow, North (Ann McKechin) asked about aggregation. The effect of the test in the Bill is to allow the courts to consider how the company is arranged. There is no need to aggregate the acts of individuals because the test is framed in a way that allows conduct and omissions across an organisation to be considered for a systemic view of what took place.

This has been a useful debate and I hope that I have clarified matters for the Committee. I appreciate why the amendments were tabled, but I hope that hon. Members will agree that the new test that we have proposed removes the need for them, and I invite hon. Members not to press their amendments and to support Government amendments Nos. 1 to 5.

Ian Stewart (Labour, Eccles)

The importance of probing the Minister’s words and understanding of the measures is, as my hon. Friend the Member for Manchester, Central pointed out, that the answers will go into the official record and can be used in court when a serious case arises. My expertise on this matter is through industrial tribunal work, which is, I acknowledge, very different from criminal court work, but my last point stands for both types of work.

The hon. Member for Kingston and Surbiton made a point that needs to be examined, and it was useful to hear the Minister’s explanation about the “who”—who has substantial responsibility in these matters. I do not propose to put myself in the place of the more learned members of the Committee in presenting at court, but I would like there to be a single piece of legislation covering all aspects of this subject rather than several pieces.

The hon. Member for Beaconsfield raised some important issues about chains of responsibility and the difficulties with them. I make no apology for differing with him on this. I shall raise the issue of the “who” at a later stage. My inclination is that someone should be identified, as happens in matters of finance, as my hon. Friend the Member for Manchester, Central pointed out. The Minister mentioned the previous CBI director-general Mr. Digby Jones. Having worked with the Minister for several years, which involved sitting behind him and looking at the back of his head, I was privy to the conversations that went on, and I know that the director-general said his organisation took the view that these matters should be raised in the consciences of company directors to the same level as matters of finance and the environment. Therefore, I will, at some point, probe the possibility of identifying a director.

The debate has been useful and illuminating and has gone to the core of what is relevant to the group of amendments and what we seek to examine. Having heard the Government’s view I shall not be pressing the amendments, but we will consider the matter and may table improved amendments at a latter stage. I beg to ask leave to withdraw the amendment.

Jo Swinson (Liberal Democrat, East Dunbartonshire)

I beg to move amendment No. 107, in page 1, line 7, at beginning insert

‘in England and Wales and Northern Ireland,’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss amendment No. 108, in page 1, line 8, at end insert—

‘(c) In Scotland amounts to a reckless disregard for the safety of the deceased.

(1A) A manager is reckless where as regards a circumstance or as to a possible result of an act he is or ought to have been aware of an obvious and serious risk that the circumstances or that the result will follow but nonetheless acts where no reasonable person would do so.’

Jo Swinson (Liberal Democrat, East Dunbartonshire)

Thank you, Mr. Gale. I am delighted to serve under your chairmanship, once again, and I am sure that together we will have a pleasant and useful discussion.

I shall give the Committee the background to amendments Nos. 107 and 108, which refer to the Scottish elements of the Bill. They present an intriguing example of how the boundaries between devolved and reserved powers are not always very clear. The hon. Member for Glasgow, North referred to the Transco case in Scotland—the tragic explosion in 1999 when four people were killed—which led to a charge of culpable homicide. Unfortunately, on appeal, that was not upheld. Transco was given a heavy fine, but the culpable homicide charge was dismissed on the basis that the duty of care concept had no part in assessing guilt of a criminal offence—it was only a civil law concept.

Ann McKechin (Labour, Glasgow North)

My understanding of the Transco case is that there was a problem with identifying a controlling mind. The civil law test was discussed, but it was not the basis of the dismissal, which was that there was no identifiable controlling mind.

Jo Swinson (Liberal Democrat, East Dunbartonshire)

I thank the hon. Lady for her intervention. I take her point that the controlling mind issue was an important point in the case, but the ruling read:

“it appears to me to follow that civil common law duties of care, or civil statutory duties of care, can play no direct part in the assessment of guilt”.

There was more than one reason why the appeal was dismissed.

As a result of that, there was, obviously, controversy in Scotland, and in April 2005, the Scottish Executive set up an expert group on corporate homicide, which produced a report in November 2005. Initially, the idea was that a private Member’s Bill be introduced in the Scottish Parliament, but in the past two to three months lawyers have discussed the matter and concluded that, although it is proposed Scottish legislation, it would be more appropriate, as it is a health and safety issue, to deal with it here in Westminster, rather than in the Scottish Parliament.

Gerry Sutcliffe (Labour, Bradford South)

I should like to make it clear that that was a joint decision by the lawyers, the Scottish Executive and others.

Jo Swinson (Liberal Democrat, East Dunbartonshire)

I thank the Minister for that clarification. Indeed, lawyers from both Parliaments made that decision.

It is important, however, that the Scottish dimension is considered, and my amendment seeks to address the problem in the Transco case. The expert group, which obviously has looked in some detail at that issue, considered how best to deal with the charge of corporate homicide in Scotland. It looked at the possibility of incorporating the duty of care concept into criminal law, but concluded:

“This principle of duty of care, which is drawn from the civil law of negligence, is familiar to the English law of manslaughter. However, the ‘duty of care’ does not feature in the Scottish criminal law of culpable homicide.”

It continued:

“The Group feel strongly that, as far as Scotland is concerned there are no particular advantages to importing the concept of ‘duty of care’ into a criminal offence of corporate homicide.”

The Law Society of Scotland has examined that matter and proposed the recklessness test outlined in the amendments, which is already a concept in Scottish law.

Obviously, Scotland has a different legal system and we should not be attempting a one-size-fits-all approach. Given the amount of thought and consideration that has gone into that issue already in Scotland, we need a clear reason from the Government for ignoring that expert advice. I hope very much that they will accept the amendment.

Ann McKechin (Labour, Glasgow North)

As the hon. Member for East Dunbartonshire has indicated—

Standing Committee B

Clause 1

Joe Benton (Labour, Bootle)

I remind the Committee that with this we are discussing amendment No. 108, in page 1, line 8, at end insert—

‘(c) In Scotland amounts to a reckless disregard for the safety of the deceased.

(1A) A manager is reckless where as regards a circumstance or as to a possible result of an act he is or ought to have been aware of an obvious and serious risk that the circumstances or that the result will follow but nonetheless acts where no reasonable person would do so.’

Ann McKechin (Labour, Glasgow North)

Good afternoon and welcome to the Chair, Mr. Benton.

I should like to declare on the record that I am a non-practising member of the Law Society of Scotland. The amendments that we are discussing, tabled by Liberal Democrat Members, were suggested by the society. As was mentioned by the hon. Member for East Dunbartonshire (Jo Swinson), the amendments are relevant in the context of Scots law where the crime of corporate culpable homicide, a common law offence, is very different and distinct from the equivalent offence of manslaughter under English common law.

The Bill as originally proposed applied only to England and Wales and followed upon the report of the Law Commission. The laudable aim was to ensure equivalence under the law; regardless of the employer’s legal identity—whether they were an individual, partnership, corporation, association or Government Department—the perpetrator of the crime would be treated in an equivalent manner. That is what the Bill aims to achieve for England and Wales.

Unfortunately, the major problem with the law of culpable homicide in Scotland is that there is no clear definition of what it applies to. Over the years, the Scottish courts’ interpretation of it has changed considerably. In the leading case of Paton v. Her Majesty’s Advocate in 1936, Lord Justice Clerk Hope stated:

“It is not necessary, in order to substantiate a charge of culpable homicide, either that there should be any intention to do to another the injury which has occurred, or that the party should even know that another is actually exposed to risk, as in the case of a carter who neglects his duty and runs down a child, though he may not know that any child actually is near him. The general rule is that every person, placed in a situation in which his acts may affect the safety of others, must take all precautions to guard against the risk to them arising from what he is doing.”

Many lay people would take that to be a breach of a duty of care. Yet when we fast forward 60 years to the Transco case, the trial for culpable homicide referred to by the hon. Lady, we see that Lord Osborne referred to the 1956 case of Quinn v. Cunningham, which stated:

“The essence of culpable homicide is the degree of culpa which has in fact resulted in the death. Mere culpa plus a death resulting from it does not constitute culpable homicide.”

What was required was, to use Lord Osborne’s phrase,

“criminal recklessness in the sense of a total indifference to and disregard for the safety of the public.”

I take that to be a much higher level of test, which is currently applied by the Scottish courts in respect of the common law offence.

The Law Society’s proposals aim to establish a more objective test of recklessness; it tries to define the concept in respect of corporations and Government bodies. However, I still think that if we used that interpretation, in the Scottish courts a specific office holder who had committed an offence, rather than systemic failures of senior management, would have to be identified. Therefore, I do not support the amendments because they would impose a much higher test.

However, the amendments raise an important point. If the Bill is enacted and applicable to Scotland, we will have created a further non-balance in respect of the crime as it relates to deaths at work or in the place of work. Individuals—and, as presently drafted, partnerships, friendly associations and other bodies—are not covered by the Bill. They would still be covered by the common law definition of culpable homicide, but that imposes a much more severe test as currently interpreted by the courts.

As I said on Second Reading, I hope that the Government will use the opportunity to discuss with their colleagues in the Scottish Executive whether to review the law of culpable homicide as it applies to the common law offence, because it creates an inequitable position in Scots law that will be unsatisfactory in the long term. It means that individuals or partnerships could be subject to a much higher risk than that which applies to corporations. It is important that the Executives on both sides of the border should discuss the way forward.

I appreciate that the Scottish Parliament’s business is full when it comes to law reform. In fact, two justice committees are sitting at present and I know from speaking to colleagues how busy they are. They also face elections next May. However, the question of whether the law of culpable homicide needs to be reformed should be seriously considered in Scotland. The Scottish Law Commission has discussed proposals for codifying the common law on serious offences, including culpable homicide, in order to clarify the law.

I accept the Government’s argument about the level of test. It is the right level of test to apply; otherwise, many corporations would never be charged correctly or properly, as happened in the Transco case. It is important, however, that the public should have the comfort of knowing that that area of law is equitable and equivalent regardless of who perpetrates that sort of crime—and it is a crime.

I do not support the amendments. I believe that they would impose a more severe test than the Government intend. However, I hope that my hon. Friend the Minister will give some indication this afternoon of the dialogue that he has had with the Scottish Executive, and that he can tell us something about the views of the Scottish professional legal bodies, including the Scottish Law Commission, the Law Society of Scotland and the Society of Solicitor Advocates.

Gerry Sutcliffe (Labour, Bradford South)

Good afternoon, Mr. Benton. I welcome you to the Committee’s deliberations.

I am grateful to the hon. Member for East Dunbartonshire and my hon. Friend the Member for Glasgow, North (Ann McKechin) for expressing themselves as they did. I want to set the scene. I know that the hon. Member for East Dunbartonshire didso this morning, but I shall remind the Committee about the situation in Scotland.

The amendments address the question of the application of the new offence to Scotland. It is important to understand why the Bill extends to Scotland. Similar problems arise in Scottish law when prosecuting a company for culpable homicide as arise under English law in corporate manslaughter cases. In the Transco case, the Court of Appeal confirmed that in order for a company to be found guilty under the common law offence of culpable homicide in Scotland, an individual or group of individuals at a sufficiently senior level of the organisation to represent its directing mind must be shown to have been criminally responsible for the death. The guilty mind can then be attributed to the company; that is known as the identification principle.

In English law, the Court of Appeal expressly stated that the law of Scotland does not recognise the principle of aggregation, which would allow the conduct and state of mind of a number of people over a period of time to be considered collectively. Scottish Justice Minister Cathie Jamieson made it clear at the end of 2004 that, if legislation was required to reform that area of law, proposals would be made. As the hon. Lady said, an expert group was set up in April 2005 to consider changes to the law. It reported in November 2005. The legislative competence of the group’s proposals were considered in detail on both sides of the border. It was concluded that although they involve a change to the criminal law, which is a devolved matter, the purpose and effect of the detailed proposals are too closely linked to the reserved matters of health and safety, and business association to be within the Scottish Parliament’s competence. Furthermore, the view taken both by the Scottish Executive and in Whitehall is that the Bill is reserved for similar reasons. The starting point is therefore the fact that the new offence is reserved. Matters are reserved where a consistent approach is needed nationally.

As my hon. Friend said, it is important that the new offence fits properly into the structure of Scots criminal law. We believe that to be the case, and I have been willing to listen to points that colleagues have raised in that respect. As my hon. Friend said, however, the amendment goes beyond that and proposes a fundamentally different approach to the new offence between Scotland and the rest of the UK. We are reluctant to go down that route. It would mean that companies would be operating under different regimes north and south of the border. Furthermore, we are not satisfied that the proposed approach is the correct one for the future of the offence in any case.

As I have said, one of the chief difficulties with the law at present is the identification principle—that is, the need to identify a directing mind of an organisation that is personally guilty of causing the death. The purpose of the Bill is to establish a new basis for assessing corporate liability, which, as I said this morning, moves away from the question of who manages a company to how the activity was managed. Indeed, one of the trenchant criticisms of the senior manager approach in the draft Bill was that it did not move the law on sufficiently in that respect and retained the identification principle.

There was some misunderstanding of the position, but I have responded to that by introducing amendments to the test for liability, which we discussed this morning. However, there seems to be little room for misunderstanding with the amendments under discussion. They deliberately focus on the conduct and omissions of senior managers as individuals, retaining the element of identification that we are seeking to move away from. The hon. Lady said that the expert group in Scotland had proposed an offence based on recklessness, but those proposals were constructed differently and did not propose establishing that senior managers had been reckless.

I also note MSP colleague Karen Gillon’s recent proposal for a private Member’s Bill in the Scottish Parliament, which suggested an offence based on recklessness. That was not along the lines proposed by the expert group, but has similarities to the group of amendments that we are considering. However, the consultation also commented that even where aggregation was possible, difficult and insoluble problems might arise, where different office holders acted in different ways, or knew or believed different things. At the same time, the consultation expressly included an offence based on a gross negligence test, along the lines proposed in the Bill. As Gillon indicated, the concept of gross negligence formed part of the common law on culpable homicide in Scotland, at least until the mid-20th century.

We are satisfied that the new offence proposed in the Bill should apply in the same terms throughout the UK, that an offence based on the recklessness of senior managers does not address the problems that we are seeking to reform, and that relying on the concept of gross negligence is apt for Scotland. I will take up the point that my hon. Friend raised about discussions with the Scottish Parliament. I have discussed the issue with Ministers at the Scotland Office in Whitehall, and will certainly be discussing further with colleagues the application of the issues that she has raised. For those reasons, I would ask that the amendment be withdrawn.

Jo Swinson (Liberal Democrat, East Dunbartonshire)

I, too, welcome you to the Committee, Mr. Benton. I appreciate the contribution from the hon. Member for Glasgow, North, who has the advantage, unlike me—or, I am afraid, the Minister—of having a background as a solicitor.

In moving the amendment I sought a specifically Scottish solution to the issue of the duty of care not being a concept in Scottish civil law. I take on board the Minister’s reassurances, particularly his addressing the concept of culpable homicide in common law, which is a point that needs addressing. I beg to ask leave to withdraw the amendment.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 97, in page 1, line 7, leave out ‘relevant’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss the following amendments: No. 98, in page 1, line 17, leave out paragraph (b).

No. 39, in clause 3, page 2, line 17, leave out from ‘any’ to ‘owed’ in line 18 and insert ‘duty’.

No. 101, in page 2, line 17, after ‘any’, insert

‘duty imposed on it by statute or any’.

No. 105, in page 2, line 17, leave out ‘of the following duties’ and insert ‘duty’.

No. 77, in page 2, line 18, leave out ‘of negligence’.

No. 102, in page 2, line 18, after ‘negligence’, insert ‘to any person’.

No. 106, in page 2, line 18, at end insert ‘including, but not limited to’.

No. 40, in page 2, line 19, leave out paragraphs (a)to (c).

No. 103, in page 2, leave out lines 19 to 30.

No. 104, in page 2, leave out from beginning ofline 35 to end of line 19 on page 3.

No. 41, in page 2, leave out lines 36 to line 6 onpage 3.

No. 78, in page 3, leave out lines 7 to 18.

No. 42, in page 3, leave out line 19.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

It is a pleasure to welcome you to the Chair, Mr. Benton.

This morning the Minister accused me of trying to become a lawyer. I can assure him that I have no such intention. My father was a lawyer, as are my brothers, and we have enough lawyers on the Committee. I hope that in delving into an area that contains a huge amount of legal principle I will not make too many mistakes, and I am sure that colleagues will bear with me. Considering the collection of amendments that I have tabled, I can easily imagine that the Minister might say that they are not all technically correct, but hopefully the principle and the purpose will be clear and we can have a debate on them. One of the main focuses of this group of amendments is to tease out from the Government their thinking about introducing a civil concept of duty of care in regard to an offence that many people would consider a criminal offence, namely corporate manslaughter. It is that distinction between the civil tests that the Government are using and the relevance to a criminal offence that needs to be explained.

As I understand it, the Government are using a civil law duty of care test that has been developed over time for civil liabilities when an individual wants to sue a company, for example, for compensation. One can understand why that has happened and it is all very well for its purpose. However, will it work in trying to decide whether a corporation is guilty of the serious crime of manslaughter? That read-across, in the advice that I have received, is not always terribly helpful. The civil law duty of care concept has changed over time, inevitably, because it has been developed for different purposes than deciding whether an organisation or individual should own a duty of care in a criminal context.

To give an example, my hon. Friend the Member for Cambridge (David Howarth) mentioned on Second Reading a Court of Appeal case called the Wacker case. The judgment, trying to explain the difference, stated:

“Why is there, therefore, this distinction between the approach of the civil law and the criminal law? The answer is that the very same public policy that causes civil courts to refuse the claim points in a quite different direction in considering a criminal offence.”

There is a concern that we are not applying the right duty of care, and that could lead to some cases not being pursued. It will also create some legal difficulties when people try to work out whether a civil law duty of care was owed. Our amendments try—albeit imperfectly, I am sure—to insert the criminal concept rather than the civil concept. I hope that the Minister can justify the Government’s approach as to many it does not seem to be the right one.

I want to draw particular attention to amendment No. 101. We seek to insert into the Bill the idea of an offence being created if a statutory duty is breached by a corporation, and that could be additional to the Government’s civil law duty concept of care. It seems rather odd that if a company breaches a statutory duty, such as the Health and Safety at Work, etc. Act 1974, that they could do so and in so doing cause a death but not be guilty of the offence of corporate manslaughter. That would seem odd to many people, and I certainly have not understood why the Government want to do that. It seems to me that statutory duties are well understood by companies. We are not suggesting making a new statutory duty—these amendments all contain statutory duties that have been passed by this House. They might be broader than the Government intend with their rather narrower and more restrictive version of a civil law duty of care, but that does not mean that they are wrong. On first principles, it would seem that they ought to be right. The hon. Member for Beaconsfield (Mr. Grieve) was certainly hinting at that in many of his remarks on Second Reading.

I hope that the Minister will explain to the Committee why the Government have gone for the civil law approach, as it seems far more limiting and, in fact, more complicated, and that is a real danger. I look forward to the Minister’s justification.

Dominic Grieve (Conservative, Beaconsfield)

Mr. Benton, I welcome you to the Chair this afternoon. I listened carefully to what the hon. Member for Kingston and Surbiton (Mr. Davey) said, and I have some sympathy with his remarks. Indeed, amendment No. 39 which features in this group is in exactly the same way designed to tease out the issue surrounding the meaning of the relevant duty of care. It is a probing amendment.

I start from a position slightly different from that of the hon. Gentleman. I would be interested in the Minister’s views on the matter. I am not sure I completely agree that criminal and civil law as they exist at present are different in respect of the manslaughter duty of care. Manslaughter is the killing of another person by gross negligence, and I understand that the duty of care that an individual may owe to another under ordinary civil principles applies in exactly the same way in the criminal law of manslaughter.

If an employer kills his employee in breach of the duty of care that he owes him, and if that breach is an act of gross negligence rather than just negligence, the case moves from the civil to the criminal sphere. The principle of having a duty of care in negligence as a principle underlying the existing crime of manslaughter is perfectly well established. I do not think that there is anything odd about that at all.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Perhaps the hon. Gentleman could restate it for me, but was that not the whole point in the Wacker case? The legal representatives of the Chinese immigrants tried to argue that there was a civil duty of care. That was struck out, but it was ruled that there was a criminal duty of care, so the court makes a big distinction.

Dominic Grieve (Conservative, Beaconsfield)

If I understand the Wacker case correctly, the court took the view that no duty of care was owed by the lorry driver to the unfortunate people whom he had put inside his lorry, because, as they were engaged in a common enterprise of illegality, ordinary civil law did not apply. So I do accept that Wacker in that sense extended, or clarified, the principle of criminal liability. However, I am bound to say that I was not altogether surprised about the outcome of the case, because as well as the duty of care that one may owe in civil law to an individual, the existing crime of manslaughter extends further into areas where duty of care would not normally arise.

I do not want to get involved in the complexities of the case, but it does not remove from my mind the idea that underlying the existing offence of manslaughter committed by an individual—let us forget about corporations for a moment, as we shall never convict them, anyway—is the principle of the civil duty of care at common law, even if with Wacker it may have been extended by the courts to cover issues such as, for example, illegal activities that might otherwise fall outside it.

It is worth bearing in mind that the duty of care at common law has been extended by statute in a range of fields to encompass duties owed to people who might not have been protected at common law in civil cases; for example, the duty owed to trespassers under occupier’s liability. The fact that a 14-year-old may climb over a barbed-wire fence, walk across a railway track, climb on to railway carriages and get electrocuted on the overhead power lines does not prevent his bringing an action and recovering against Network Rail, or whoever the railway company may be, if it can be shown that the company ought to have been aware, for example, that that was something that happened frequently. The expression sometimes used is “the duty of common humanity” that we owe to other people, even to other people who are doing illegal things.

I simply make the point that the distinction has already been blurred. Therefore, there is nothing wrong in the Government starting by saying that it is the principle of the duty of care in negligence that should underpin the present offence. In fact, if one actually goes on to look at what the Government are seeking to do, it seems to go further than the common law duty of care anyway because it encompasses some of the statutory duties that currently exist.

What is more surprising is that in clause 3, the Government appear to be set on limiting the offence by making it lower than the duty of care in negligence that currently exists. I will be interested to hear the Minister give examples of where he is seeking to impose restrictions through clause 3 as it stands. The purpose of the amendment I have tabled is to de-restrict it and to tempt the Minister into telling the Committee what would be covered that he does not want covered in the slightly convoluted wording he has put forward.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

In many ways the hon. Gentleman has made my point for me. If one sticks to the criminal version of duty of care, the Minister would have greater problems in making the restrictions and limitations that he is seeking. It is partly driven by that concern that I want to push the point relating to the criminal duty of care.

Dominic Grieve (Conservative, Beaconsfield)

That raises another question and I understand the hon. Gentleman’s point. We are dealing here with corporate manslaughter and I understand that the intention of the Government in seeking to put this Bill on the statute book is to target corporations that, in the course of their legitimate activities and duties, kill somebody.

The hon. Gentleman may have a point in that the Bill does not cover a corporation that engages, for example, in illegal activity. The Minister’s reasoning behind that was there is no need or requirement to do so because in those circumstances, individuals would be prosecuted under the existing law of manslaughter. If I understand the Minister’s reasoning—he will tell me if I have this right—he wishes to keep a distinction between the existing law of manslaughter and thenew offence that he is creating. That is essentially a regulatory offence: people who, in the course of their legitimate business, do things that by gross negligence lead to the death of an employee or someone who is affected by the businesses activities. That appears to be what the Government are aiming for.

If the Minister goes the full way, as suggested by the hon. Gentleman, I can see that it would provide more scope, but it would also remove the distinction almost completely between manslaughter and the corporate manslaughter that is being created. At the moment, I am not persuaded that that is the right approach, but I understand what the hon. Gentleman is saying.

On the point legitimately raised by the hon. Gentleman, the test in subsection (3) is undoubtedly narrower in scope than the broad test in sections 2 and 3 of the Health and Safety at Work, etc. Act. That Act deliberately moved right away from the law of negligence. It was intended that it should do so and there were various cases in the early 1990s when all sorts of arguments were advanced by companies prosecuted under the 1974 Act in relation to issues such as vicarious liability. Each time, the Court of Appeal and sometimes the House of Lords said that it was quite irrelevant.

Dominic Grieve (Conservative, Beaconsfield)

I am conscious of the fact that the last word that I used before the Division was “irrelevant”, but I cannot remember now exactly what was irrelevant. However, I shall endeavour to return to my theme.

I was explaining to the hon. Member for Kingston and Surbiton that the system being set up under the Bill is entirely different from that of the Health and Safety at Work, etc. Act 1974. Indeed, it now comes back to me that I was saying that the question of negligence was irrelevant under the 1974 Act. That Act set up a completely new regime, which is based on two principles. The first, under section 2, is the duty to look after the health and safety at work of all employees with the sole qualifier

“so far as is reasonably practicable”.

The second, under section 3, is the

duty of every employer to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that persons not in his employment who may be affected thereby are not thereby exposed to risks to their health and safety.”

Those are sweeping and wide-ranging principles. They replaced the existing laws of negligence with a test that in some ways is very robust and, in my experience, easily comprehended by juries. The prosecution has to establish that there has been an accident; that on its own establishes that a risk must have been created, and the burden then shifts to the defendant to show that he took all “reasonably practicable” steps to deal with that risk. That is not to say that it is an absolute liability; it is not, because a person can show that even though an accident had happened, he had taken all reasonably practicable steps to prevent it. It then becomes a simple test.

Of course, the test extends to protecting employees and anyone else who comes into contact with the employer’s activities. The duty of care imposes a wide test which encapsulates the statutory principle created under the 1974 Act. It has stood the test of time in terms of the number of prosecutions brought under it.

The Committee will be aware that successive Governments have created regulations under the 1974 Act that themselves provide guidance about what employers should do. Under clause 9, the 1974 Act will become a relevant factor for the jury when deciding whether there has been gross negligence.

I shall probably return to the matter on new clause 1, but a completely different way of approaching the problem would, if the Government were to adopt it, simplify the Committee’s debates enormously. I suggested on Second Reading that an alternative approach would be not to go down the road of creating the offence of corporate manslaughter with sentences of fines on the corporation, but to have an aggravated offence of breaching sections 2 and 3 of the 1974 Act if someone dies as a result. The fine imposed in the latter case would be proportionately higher, with sentencing guidelines, than would be imposed under the existing health and safety regime.

If we were to go down that road, much of our debate would be unnecessary. The Bill would be very short and we could deal with it quickly. However, I accept that the Government intend—I assume that that intention has influenced them against going in the direction I suggested—to fix a level of criminal culpability on corporations that commit corporate manslaughter that is of a higher order than prosecution under the 1974 Act. An outsider would say that such people were more guilty because it would not be a prosecution under the 1974 Act but a corporate manslaughter prosecution.

Mr. Sutcliffeindicated assent.

Dominic Grieve (Conservative, Beaconsfield)

I see the Minister nodding. I appreciate what the Government are about, but it is an irony—I shall probably repeat this several times during the next few weeks—that the practical outcome at the end of the day will be that the penalties are identical. I suspect that the only difference will be the long-term and perhaps greater stigma that may attach to a corporation for being convicted of corporate manslaughter rather than of an aggravated offence under the 1974 Act. The Committee may have to consider that matter further. I certainly urge the Minister to do so.

I tabled the amendment not to raise the alternative—we can confine it, I hope, to one distinct debate—but simply to ensure that the Minister explains to the Committee why the full range of duties of care in negligence cases is being significantly narrowed.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Gentleman makes a persuasive case, with one possible exception. Because the Government are not allowing a breach of statutory duties to count towards the offence of corporate manslaughter, what is proposed is a lesser offence, to the extent that it is not drafted as broadly as an offence under the 1974 Act.

Dominic Grieve (Conservative, Beaconsfield)

The offence is clearly not as wide in scope as an offence under the Health and Safety at Work, etc. Act. It is more narrowly restricted in a number of ways, including the duty of care principle, although I shall be interested to hear what the Minister’s officials think about that. The offence is certainly much more complicated to prove. Those are the two main distinctions that I can see.

The offence has been deliberately pitched more narrowly, although we can try to expand it. That is what the hon. Gentleman is trying to do with his probing amendment and what I am trying to do with mine. However, I shall be interested to hear the Minister’s views about why the offence should be restricted in the way that it is. He may take the view that to start introducing statutory duties into the concepts will be a problem, but it is worth noticing that the law of negligence under clause 3 includes the Occupiers’ Liability Act 1957 and the Defective Premises Act 1972, which cover the two classic breaches of statutory duty that normally arise in civil proceedings in this country, along with the ordinary law of negligence. I am sure that the relevant Scottish legislation fills exactly the same slot.

Ian Stewart (Labour, Eccles)

The hon. Gentleman has couched the implications of stigma in clear terms, but does he not understand that stigma is something that happens after the event? We must concentrate on deterrence. We may differ on what is effective deterrence, but the important thing is deterrence and saying that the killing of a person unlawfully is not acceptable.

Dominic Grieve (Conservative, Beaconsfield)

I do understand the distinction, but one must bear in mind that the penalty, whether we go for what is proposed in the Bill or an aggravated offence under the Health and Safety at Work, etc. Act, is essentially identical—an unlimited fine. The question of what that fine will be is a matter of sentencing guidelines. However, there is no logical reason why the sentencing guidelines could not be identical and lead to the same result for an aggravated offence under the Health and Safety at Work, etc. Act as for the offence proposed in the Bill.

Of itself, I do not see the sentencing as a deterrence issue. The only element of deterrence that I can see is the stigma. If I understand the Government’s approach, it is that companies will be worried about being stigmatised by having to report an offence of corporate manslaughter in their annual reports to their shareholders, quite apart from another possible consequence that I can see arising from such a conviction, which is the company directors having to resign, which does not normally happen with a prosecution under the Health and Safety at Work, etc. Act in relation to a death. The Government see that as piling on pressure.

I voice a note of caution about other examples from criminal justice legislation. I hope that the hon. Gentleman will forgive my saying so, but antisocial behaviour orders are a classic example. When they were first introduced, there was this sword of Damocles business. People who breached their ASBO faced Armageddon: they would disappear without trace, the police would take them away and they would be in prison for ever. The word on the street was that the penalty was really serious, but once the system got up and running, people who breached an ASBO found themselves facing the ordinary run of the mill of being chucked into a youth offenders institution. I am sorry to be so banal about ASBOs, but that is what has happened. The stigma, fear, threat or deterrence started to diminish as the legislation impacted.

I hope that the Minister realises that I am sympathetic to what the Government are trying to do. However, I have an anxiety that although the first prosecution will be big news, after a time the big news will start to wear off. Company directors will realise that they can go to their shareholders, shrug their shoulders and say, “It may be corporate manslaughter, but it is one of the occupational hazards of running a construction company,” and we will start to lose the stigma. In that case, we are creating a very complicated thing to do something that could be done more simply. I do not want to become too diverted, because I hope to return to the point and not to tempt the Minister into a lengthy debate on it now.

Ian Stewart (Labour, Eccles)

I accept the hon. Gentleman’s statement about stigma, but does he now understand why there is a difference between us about the potential for a custodial element as a part of deterrence? I know that we differ on that, but it puts the subject in a different context.

Dominic Grieve (Conservative, Beaconsfield)

The hon. Gentleman makes a good point. If we were to imprison directors collectively for the offence if the company were to commit it, that would have a powerful deterrent effect. However, it would also have rather a powerful deterrent effect on anybody ever becoming a director of a public company. [Interruption.] We have to live in the real world.

As the Committee will know—I am accused of being a lily-livered liberal at times when I point this out—that I am on the whole against locking people up for being negligent. We had this discussion in relation to the Road Safety Bill—or would have had, had we hadthe opportunity to debate it recently on the Floor of the House on Report. It is quite unusual to do such a thing in a civilised society, and ever since we gave up locking people up for debt it is contrary to our fundamental legal principles that we should lock people up for ordinary negligence as opposed to gross negligence.

The offence that is being created is rather different from the gross negligence of the manslaughter offence that we have at the moment, and so we should be extremely careful about starting to widen the scope of culpability to individuals so that they can be locked up, which is why the Government are absolutely right to confine the offence to corporations.

Tony Lloyd (Labour, Manchester Central)

I rise to speak on Amendment No. 77, although in fact the argument runs across the group of amendments.

The debate so far has been interesting. It is always good for a non-lawyer to be educated. My lessons in law always come in the Committee stages of legislation, and although they are not always to my advantage they are nevertheless interesting and important.

The last exchange between my hon. Friend the Member for Eccles (Ian Stewart) and the hon. Member for Beaconsfield was illuminating. The hon. Gentleman should congratulate himself on the fact that he has entrenched us in our view that it is necessary tohave individual deterrence in the most serious crimes of negligence as well as the concept of corporate negligence, almost precisely because of the deterrence argument. He does a good job in at least making it clear where the boundaries in the debate lie.

The debate more generally has been important in drawing out what we are trying to achieve and why. The concept of whether we should use the health and safety at work legislation or have a separate offence is important, even within the confines of what the Bill seeks to do. In the end, the balance for most of us comes down to the fact that it is important that society recognises that there is something qualitatively different about the causing of death as opposed to the causing of injuries, however serious, or to the capacity to cause injury. That distinction is recognised in the legislation, and is an important step forward. Frankly, it simply has not been in the law in the past. The headline cases that we all know about were not prosecuted, even under the health and safety legislation that existed at the time, so we need to consider those aspects.

I want to confine myself to the amendments. Like the other amendments, amendments Nos. 77 and 78 touch on issues centring around the meaning of “relevant duty of care”. One of the debates that I am advised takes place in legal circles is whether common law can ever be less than statutory law. I am told that there is at least a good argument that statutory law cannot diminish common law, that the common law of itself must include the whole of statutory law. If that were the case, clause 3 would be adequate, but the fact that the clause goes on to define what common law does indicates that the Government themselves are not quite sure that that will be the case in practice. Therefore, I invite my hon. Friend the Minister to consider carefully the arguments that have already been put on the two other groups of amendments and on this one.

The impact of amendments Nos. 77 and 78 would be that the law would include—and, by definition, must include—the common law of negligence and, most certainly, all statute that is relevant. It is difficult to understand why the Government would allow for the possibility that the duty of care could be narrower than that existing in other areas of legislation. In that sense, I simply ask my hon. Friend the Minister to examine the possibility of reflecting beyond Committee stage on whether he needs to review the issue and seek assurances that the words in the Bill are not narrowing, as others and I have argued. It may be better if he were to use any of the devices before him to consider whether the Bill needs to be broadened to include a wider duty of care.

In the end, the argument may be about the meaning of words and it may be an argument only in this Committee. However, we have a duty as parliamentarians and legislators to ensure that the debate about the meaning of words does not take place in a court environment. We want corporations to be indicted, not to escape indictment because of the misuse of words. With those comments, I ask the Minister to respond. I hope that he is able to help us today or at least to offer to reconsider the matter.

Gerry Sutcliffe (Labour, Bradford South)

I appreciate the way in which the amendments have been discussed by hon. Members. I find myself in the fortunate position of not having to make the Government’s case on some issues because the Opposition Front Bench spokesmen have made it for me. I fear to go too far, as I might undo the good work that the hon. Member for Beaconsfield did by explaining the issues to the Committee, but I take issue with the entrenchment that he has forced on my hon. Friends in respect of his points. I am sure that a discussion will take place.

In the spirit of what has been said, I shall deal with the amendments slowly, as I know that the legal aspect of the definitions is important to hon. Members. The hon. Member for Beaconsfield rightly and fairly puts the difference between us as his belief that the Health and Safety at Work, etc. Act 1974 is the route for resolving such cases. We shall discuss that later under new clause 1. I do not agree with him. He is right that the Government’s objectives and the length of time that it has taken to get to this position have been criticised by some on our own side. I do not want to go through the history of that, but he may understand some of the thought patterns around those criticisms.

The hon. Gentleman is right to say that the amendments are about a requirement in the new offence that an organisation owes a duty of care to the victim. Requiring a duty of care ensures that organisations can be guilty of the new offence, in respect of a failure to act, only in circumstances where they were already bound by a duty to act. The current law of manslaughter in England, Wales and Northern Ireland is based on the existence of a duty of care.

I welcome the recognition in the amendments that the offence should be underpinned by a duty of care. The amendments, however, seek to extend the definition to underpin the offence with any duty, whether owed under statute or the law of negligence. That would not be sensible. The reason for linking the offence to the existence of a duty of care in the law of negligence is to provide certainty about when the new offence might apply. The common law duty of care provides a long-established framework for establishing the circumstances in which an organisation ought to be liable for not taking reasonable care for the safety of others.

A key suggestion is that the offence ought also to be based on health and safety duties. We do not think that those would provide a helpful foundation for the new offence. Statutory health and safety duties are designed to underpin broad and flexible safety regimes; they were not drawn up as a means of underpinning the criminal offence that we are talking about. Rather, their aim is to impose broad duties on employers and others to consider the risks to which their activities give rise and to take adequate precautions against them.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I understand the Minister’s argument. When our predecessors were implementing the Health and Safety at Work, etc. Act 1974 they were not envisaging an offence of corporate manslaughter. However, does the Minister not think that it would be rather odd for a company seriously to breach the 1974 Act but not be guilty of corporate manslaughter?

Gerry Sutcliffe (Labour, Bradford South)

We are talking about gross negligence, which is key to the issue. I shall pursue my comments a little further. Obviously, the hon. Gentleman might want to intervene again.

It would not assist the aim of statutory health and safety duties if they were very prescriptive about the sort of circumstances in which a prosecution ought to be brought. Instead, regulators develop enforcement practices that enable them to focus on practical priorities. The general and flexible nature of the duties is a great advantage for their use by regulators, but as such they do not offer the clarity needed for an offence of this seriousness.

Extending the offence to any duty owed under statute could also have much wider effects. Public bodies, such as local authorities, are given functions through statute and they may be framed in terms of powers and duties. The purpose of the statutory provisions is to provide public bodies with the authority to carry out their functions. It is rarely the intention that the exercise, or non-exercise, of those powers should directly give rise to liability, although clearly their exercise may have considerable effects on people’s safety.

The Road Traffic Act 1988, for example, imposes a duty on councils to carry out measures to promote and improve road safety. However, the House of Lords has ruled that the non-exercise of such a power—by not putting up signs on a dangerous bend, for example—does not give rise to liability. The amendments could bring questions about the exercise of the duties within the ambit of the offence and that would be undesirable.

The amendments also relate to the proposal for categories of relevant duties of care. In many cases there will be little or no issue whether a duty of care is owed or not. The duty of care is a developing area of the law, especially in relation to the liability of bodies carrying out public functions. For those reasons, we have developed categories of duty of care for the purpose of the Bill, marking out clearly the types of activities that the offence is intended to cover.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

If I heard him correctly, the Minister was saying in his example that if a public highways authority did not manage its highways in a way that promoted safety, he wished to make sure that it would not be guilty of any offence. However, I understand that in some cases a company can be found guilty of breaching the 1974 Act if it does not put up the relevant notices and signs, although the hon. Member for Beaconsfield may know more about that than me. Is the Minister saying that the private sector will be treated in one way, and public sector in another?

Gerry Sutcliffe (Labour, Bradford South)

I am not sure that I am saying that; perhaps the House of Lords said that in its decision on the Road Traffic Act 1988. However, I shall clarify whether that distinction exists for the hon. Gentleman.

Dominic Grieve (Conservative, Beaconsfield)

I take it that the Minister is saying that it would be rather strange that an organisation should be prosecuted criminally for the breach of a statutory duty that was not actionable after a court decision in a civil case, which is the case with highways authorities and road sites. That is what he is saying.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to my new-found adviser.

We want to give greater certainty about duties of care that do not arise or are speculative—for example, when public bodies set regulatory standards or provide guidance—so as to give certainty to organisations to which the offence will apply and to the public. That approach will also allow investigators to take decisions earlier without considering detailed questions about the duty of care in circumstances that might otherwise involve speculation and time wasted in investigations.

In practical terms, the categories are intended to be broadly comprehensive of the circumstances in which a duty of care is likely to be owed. They clearly cover duties owed to employees, customers and service users, the safety of premises, construction and maintenance, and using plant, equipment and machinery. If that approach gives rise to loopholes, we will clearly need to reconsider it. In some cases, however, we might intend that an activity should not be covered by the offence. For example, detaining prisoners in custody is an exclusively public function and is exempted under clause 4 as it does not generally constitute the supply of a service. I imagine that the Committee will want to consider further the provisions on exclusively public functions, so I shall not dwell on the matter now.

The point raised by the amendments is wider—whether we should have clear categories—and the debate should not be driven by individual points about their coverage. I do not see a compelling case for changing the circumstances in which the new offence should apply, and I consider that the concept of negligence based on a duty of care provides a well-articulated basis for the new offence.

The hon. Member for Beaconsfield spoke of stigma and deterrence. Indeed, he said that prosecution might be seen as a badge of honour and that a director might tell the annual general meeting that he had been caught out but that the company could now move on. We do not see it like that. I rather prefer what my hon. Friend the Member for Eccles said about the impact of prosecution on companies.

We will be considering how to change the culture of an organisation and whether stigma is mentioned in the annual report, which might raise the concept of corporate probation and other related issues. As I said earlier, we do not want this law to be used. We want to change the culture of organisations to ensure that health and safety is sufficiently high on the agenda that they administer safety to their work force and to those who provide services to them.

The hon. Member for Kingston and Surbiton said that the amendment was probing. We may want to return to the subject at a later stage, but I ask him to withdraw it.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

It has been an illuminating debate, not least because, although it may not be counsel’s opinion, we have certainly benefited from a very respected opinion. Like the hon. Member for Manchester, Central (Tony Lloyd), I am learning about aspects of the law that I had never considered before.

Turning to the substance of the debate, I am not completely convinced by the Minister’s arguments, and we certainly need to return to the matter on Report. The Minister read out sub-paragraphs (i) to (iv) of clause 3(1)(c) and said that there might be cases in which the Government felt that an offence ought to have been provided or that a provision ought to apply. I hope that we can explore that because if the Government are going to insist, when we eventually press them on the matter, on restricting the test, we want to help them by ensuring that they do not restrict it in unintended ways. I hope that those specialists who read our proceedings will assist us in trying ensure that the provisions are comprehensive, which is the whole purpose of our work. However, I do not want to explore those matters further today.

I beg to ask leave to withdraw the amendment.

Tony Lloyd (Labour, Manchester Central)

On a point of order, Mr. Benton. May I refer you to the amendment paper? I do not in any way want to challenge the selection list, because selecting amendments is the privilege of the Chair, and it is important that the Chair exercises that privilege without constraint. However, amendment No. 92, tabled by my hon. Friend the Member for Eccles, touches on the question of substances hazardous to health. In a sense, it is a very technical amendment. There is a potential debate whether the Bill already covers that area or whether it ought to be added to the Bill. I think that it would probably have been appropriate to discuss the amendment with the last group of amendments, although, of course, it relates to clause 3. Presumably, the decision is that the proposal is either irrelevant or already covered. However, because there is concern that, although it is a small area, it may be better dealt with in the Bill, will you look at it to see whether, when we come to clause 3, it would be in the interests of the Committee to have the amendment on the selection list?

Joe Benton (Labour, Bootle)

I have no particular knowledge at this stage as to the whys or wherefores in relation to that amendment, but I will endeavour to look into the situation and will possibly come back to the hon. Gentleman.

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 36, in page 1, line 10, at end insert—

‘(aa) an unincorporated association or body;

(ab) a partnership (as defined in section 1 of the Partnership Act 1890 (c. 39);’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss the following: Amendment No. 30, in page 1, line 12, at end insert—

‘(d) a business association.’.

Amendment No. 96, in page 1, line 12, at end insert—

‘(d) a partnership (as defined in section 1 of the Partnership Act 1890 (c. 39));

(e) a body of persons unincorporated.’.

New clause 1—Proceedings against unincorporated associations or bodies other than Crown bodies—

‘(1) Proceedings for an offence under section 1 above, alleged to have been committed by any unincorporated association or body other than a Crown body, shall be brought in the name of that association or body (and not in that of any individual member or other person) and for the purposes of such proceedings any rules of court relating to the service of documents apply as if that association or body were a corporation.

(2) A fine imposed on an unincorporated association or body on its conviction of such an offence shall be paid out of the funds of that body.

(3) In a case in which an unincorporated association or body is charged with such an offence, section 33 of the Criminal Justice Act 1925 (c. 86) and Schedule 3 to the Magistrates CourtAct 1980 (c. 43) (procedure on charge of an offence against a corporation) have effect in like manner as in the case of a corporation so charged.’.

Dominic Grieve (Conservative, Beaconsfield)

I misread the amendment paper, Mr. Benton. I thought that another group of amendments was to be taken before amendment No. 36. I am delighted that we have reached amendment No. 36, which is about the scope of the Bill. The Bill is described as the corporate manslaughter Bill and its wording means that it applies only to corporations and certain public bodies. It does not apply to unincorporated associations and partnerships, and that is the issue that I am raising under this group of amendments.

We touched on the issue on Second Reading, when the Government seemed to indicate that they had taken advice—from the Health and Safety Executive, I assume—or at least sought some statistics that had led them to conclude that the number of prosecutions brought against unincorporated bodies was sufficiently low that there was no need to include them in this legislation. Of course, it is true that if one is dealing with a small unincorporated association or partnership with, in reality, only two or three people, one is starting to move into the area where one can legitimately say that if they have done something wrong, they can be prosecuted under the existing law of manslaughter, because the problem of the directing mind will not arise. That could be a good argument for keeping that group out of the corporate manslaughter Bill altogether.

However, we have to set against that the fact that I am about to explain. It is difficult to discuss this issue without carrying out research and I must confess that I have not been in a position to go off and do research. Experience suggests, however, that although there has been a tendency in recent years for unincorporated associations to incorporate for a variety of legal reasons that can give them benefits, there are quite a few unincorporated associations around that may be of some substance and size. I told the Minister on Second Reading that I had once prosecuted an unincorporated association that I regarded as being rather important in the field of health and safety. It was Lloyd’s Register of Shipping: a large, unincorporated association with a board of trustees that ran to a long list of names. Indeed, it had to be determined at the beginning of the case whether it was in fact possible to indict an unincorporated association in its own name—Lloyd’s Register of Shipping—or whether it was necessary to list the individual trustees and require them to turn up in the dock on the first day of the trial collectively, so that they could plead guilty or not guilty. That was quickly resolved when I pointed out that the Duke of Edinburgh would be one of the people required to turn up. All sides agreed that we could deal with an unincorporated association on the basis that it could be indicted in its own name.

I think that that has become a well established practice—the Minister will be able to confirm that. The last time that I saw the great and the good appearing in the dock was in a case concerning the trustees of the Marlborough estates, involving an agricultural accident on the estate. On that occasion, the senior partner of a distinguished firm of London solicitors, a leading QC and a number of other people all had to appear in the dock at Oxford Crown court at the start of the trial. They were acquitted. In fact I should hasten to add that I think the charges were dropped, in case any aspersions should follow this debate. That highlights that those people were far removed from some of the day-to-day management issues. Nevertheless, it is desirable that it should be possible to prosecute certain unincorporated associations. In reality, in terms of their commercial activities, even if they are sometimes of a charitable nature, unincorporated associations ought to be subject to this law. That is why I have tabled this amendment.

I am interested to hear the views of the Minister and other members of the Committee, and to hear why it is that at the moment, the Government feel that unincorporated associations should be excluded. I have tabled more than simply a probing amendment. I have a genuine sense that we are about to make a mistake. While it may be true that the total number of prosecutions of unincorporated associations is very low, the Minister should look at whether they are not sometimes prosecuted in serious cases. He may find that those occasions, rare as they may be under the Health and Safety at Work, etc. Act 1974, involve matters which from a public policy point of view ought to be brought to court.

In the Lloyd’s Register of Shipping case I have no doubt that it pleaded guilty and received a substantial fine for its role in the Port Ramsgate walkway collapse, which was what the case was about. I emphasize that that does not necessarily mean it would have been found guilty of corporate manslaughter. Indeed in that case the causal links between what happened with the engineer on the ground and their method of operation might well have not have led to that. Nevertheless, there could be circumstances in which there are management failures in an unincorporated association at a senior level identical to what could happen in a corporation. In those circumstances, unless the Minister can give a compelling reason why they should be excluded, such organisations probably ought to be included. The other possibility to be considered is whether one would want to put some limit on size, so that very small organisations do not feel targeted in a way that is oppressive. The Minister might wish to respond to that.

It is a probing amendment, but this is also a serious issue and I hope that we can have a debate about it.

Tony Lloyd (Labour, Manchester Central)

I congratulate the hon. Member for Beaconsfield on his amendment. As the Minister knows, my vote is guided by the Minister’s wisdom, but my intellect is guided by the quality of debate in Committee. The hon. Gentleman makes a profound argument.

Gerry Sutcliffe (Labour, Bradford South)

I was hoping that my hon. Friend would not make his decision until he heard what I have to say.

Tony Lloyd (Labour, Manchester Central)

I said that my vote would be guided by the Minister, not absolutely conditioned by him.

The classic legal distinction between a partnership and an incorporated body has normally to do with the question of liability. A partnership has unlimited liability for existing partners while the company structure seeks to limit the liability of the shareholders. It would be rather bizarre to end up with two bodies of similar size that operated in a similar way, one of which could limit its liability by having the unlimited liability structure and another that had unlimited liability before the courts, at least as far as fines go, even though it could limit its liability towards the shareholders. It would be nonsense in terms of the spirit and purpose of the different corporate structures.

The case that has been made is straightforward. The example was given of the Duke of Marlborough’s estate trustees. Although the hon. Gentleman made the point that the case was probably discharged, nevertheless the fact that the trustees had only a vicarious view of the operation of the organisation means that in many ways it was analogous to the limited liability company with the trustees operating as shareholders do and not expecting to have control of its day-to-day running. However, there would have been managers in the trust and they would have exercised the same controlling mind role that we expect in limited liability companies. The parallels in that case are exact, unless we can define a specific difference.

There is clearly a specific difference when we talk about small partnerships, where the partners act as not much more than sole traders and the distinction between the controlling mind and the company is so small as to make no difference. As partnerships grow—some partnerships are quite large in terms of their number of partners as well as their economic influence and economic base—they tend to intrude not only in the traditional areas where they were seen to be, such as the services, but in much wider areas because of the complicated corporate structures that now exist in British industry and commerce.

Logically, I can see no good reason why we would want to draw the distinction. I am tempted by the argument made by the hon. Member for Beaconsfield in moving the amendment. Perhaps we need to look at a lower limit or possibly some protection at that end to prevent the impact of a double assault on smaller partnerships. I can understand the argument, but beyond that I hope that the Minister can consider the issue seriously and see whether we can move forward. That would be in the interests of the Committee and in the spirit of what the Government are trying to achieve. I warmly endorse the amendment, with the caveat that I am sure that the Minister will be able to think of something that would make it almost impossible for me to follow the entire logic of the hon. Gentleman’s words, were the amendment to be pressed to a vote.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

People who commented on the proposal and those who were involved in the consultation process had mixed minds on the point. The Law Commission, in its original proposals, took the Government’s position that unincorporated associations should not fall under the new offence. The Home Office, in its consultation paper in 2000, differed from the Law Commission and took the position that can be seen in this group of amendments. Then it changed its mind and went back to the original position proposed by the Law Commission. Clearly, this is an area for genuine debate between reasonable people and I hope that, as the hon. Member for Beaconsfield has already started to do, we shall be able to tease out the focus and try to get it right as a Committee.

As I looked at the proposal and read what people had thought about it in the past, it seemed to me that there were three positions that one could take. The first, which the Government are taking, is that such bodies should not be included. The second, which is covered by the amendments, is that they should be. The third would produce some sort of definition that would try to capture those larger partnerships and unincorporated associations that, to all intents and purposes, are companies except in their legal description.

Michael Fabricant (Conservative, Lichfield)

I can think of two or three unincorporated associations that are based in the United States but have large manufacturing facilities in the United Kingdom. They operate for all intents and purposes as though they were companies, but they are not included in the Bill’s scope because they are not incorporated. I can also think of a large retailer that is a plc and would therefore come under the terms of the Bill, although it does not have its shares issued on the stock exchange as such. For its own convenience a partnership employing 66,000 people happens to be a plc. If that organisation were not a plc too, it would not have been incorporated. There is clearly a huge loophole in the Bill, and I think that it is unintended.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I agree with everything that the hon. Gentleman said, except for the last sentence. What he describes is intended—it has been through a lot of discussion, and I am sure that the Minister would not describe it as a loophole. However, the hon. Gentleman is absolutely right. There are a number of partnerships—particularly in the legal and accounting professions, but in other sectors as well—that are very large and that, from the public’s point of view, are exactly the same as a Railtrack, a Transco or any other large corporation, particularly those that have caused the accidents that have given risen to the Bill.

What should we do? Should we as a Committee try to come up with a third way or should we take a decision on the two ways before us? Like the hon. Member for Beaconsfield, I am inclined to believe that we should be inclusive. There are several reasons for that. First, our old friend the Health and Safety at Work, etc. Act 1974 applies to unincorporated bodies and partnerships. They did not escape that legislation and have lived with it for many long years, so it is questionable that they should not be included in the offence.

The example that was given in the Select Committees’ report on the draft Bill, and which gave me some cause for concern, was the potential for “serious miscarriages of justice”. The case mentioned involved a partnership of two gas fitters, where gas fitter A was negligent, but gas fitter B had no way of knowing that, and where gas fitter A died and gas fitter B was left with the liability. Perhaps the hon. Member for Beaconsfield can tell us whether gas fitter B would be guilty in that case. That example was cited by Lord Justice Judge, who felt that it raised a problem, which gave me cause for concern. I wonder whether it would be possible to create a means of protecting against such cases, because we should be creating the potential for such awful miscarriages of justice. A jury would want to tease that out and prevent that from happening, because it would obviously be wrong.

I have considered that case and worried about it, and it does not seem to me to be beyond the wit of the Minister and the Committee to find a way of preventing such miscarriages. All other aspects of the argument seem to point towards the inclusion of unincorporated bodies, so I look forward to hearing the Minister try to defend his position.

Ann McKechin (Labour, Glasgow North)

I, too, agree with the comments that the hon. Member for Beaconsfield made about unincorporated bodies and partnerships. My amendment No. 30 relates solely to the law of Scotland, as defined under the schedule 5 to the Scotland Act 1998. I draw the Minister’s attention to the Government’s response to the Select Committees’ report to the House on the draft Bill, which stated that

“there are particular complications in seeking to apply this offence to unincorporated bodies because they have no distinct legal personality.”

The body most mentioned during this afternoon’s debate has been the partnership. Under the law of Scotland, partnerships have a separate legal identity. Accordingly, I argue that it is ethically sensible for them to be included, even if we accept the Government’s argument as stated in their response to the Select Committees’ report. In terms of schedule 5 to the Scotland Act, I presume—although no doubt the Minister will inform us in his response—that that was one of the reasons why it was decided that the draft legislation would cover Scotland. Schedule 5 states:

“This section reserves the creation, operation, regulation and dissolution of the types of business association”

to the Westminster Parliament. Business associations are defined as

“any person (other than an individual) established for the purpose of carrying on any kind of business, whether or not for profit...Accordingly, types of business associations will therefore include companies, whether or not registered...partnerships, building societies, friendly societies, industrial and provident societies, European economic interest groupings”.

Schedule 5 also reserves to the Westminster Parliament the

“registration, supervision and investigation of business associations and...disqualification of persons from involvement in business associations and other civil or criminal sanctions”.

On those grounds, there is a strong logical argument that because partnerships have a separate legal identity under Scots law, the term “business association” used in accordance with the Scotland Act would make a neat definition that would be clear about what matters the Scottish Parliament could legislate on—those relating to individuals in particular.

The only exception in schedule 5 to the Scotland Act is charities, which are exempted, and public bodies. Public bodies are obviously covered elsewhere in clause. When the Minister responds, I would appreciate it if he gave some indication of whether he has had any discussion with the Scottish Law Officers about the issue of partnerships as it affects Scotland, and what their advice was on that point.

Gerry Sutcliffe (Labour, Bradford South)

I will have to be careful. I have been trying to get colleagues to support my view, and I have worked out that I am two down already. The Whip will be very disappointed if I fail to convince my colleagues.

The new offence will apply to all incorporated bodies, a wide range of Departments and police forces. It will not, however, generally apply to unincorporated bodies. Such bodies, as has been said, do not have a separate legal personality. That makes it more difficult to create a distinction between the corporate liability of the organisation itself and the individual liability of those running it.

My hon. Friend the Member for Glasgow, North has made the point that Scottish partnerships are in a different position in that they have a separate legal personality. I am prepared to consider carefully the implications for the new offence with colleagues and to take the matter further. That might help as we proceed.

The Government are aware that a number of statutes make specific provision for prosecuting unincorporated bodies. They relate frequently to regulatory regimes such as health and safety. It is vital that such regimes apply comprehensively to all employers and businesses. However, the offence of corporate manslaughter is in a different category. As a common law offence, it does not apply to unincorporated bodies, so the question is not about reforming an offence to which organisations are already subject but about extending that offence to a new class of organisation.

We have focused on addressing the key problem in law: the difficulties that arise when prosecuting large corporations under the identification principle. Although it is true that some unincorporated bodies might be very similar to their incorporated counterparts, we must consider carefully whether wholesale extension of the law would be justified and is a priority. That would apply the offence not only to large partnerships and similar organisations but to smaller clubs and societies, making them liable for corporate manslaughter for the first time. Such organisations are least likely to understand the implications of the new offence and most likely to be risk-averse through ignorance.

Michael Fabricant (Conservative, Lichfield)

Will the Minister therefore give consideration to the other point that my hon. Friend the Member for Beaconsfield raised about having a set number of people required for participation?

Gerry Sutcliffe (Labour, Bradford South)

If the hon. Gentleman allows me to continue, I might come on to that and then we can work out if we are heading in the right direction. It is my intention to try to reach an accommodation by which that is possible.

On the implications of the offence, we do not want to discourage local sports clubs and their like, but if being an unincorporated body in itself is not a reason for exclusion, on what basis do we draw the line? We believe that the example of the trustees rather undermines those cases. It was a matter of calling each individual to answer because there was no separate body with a distinct liability. So where did the liability lie? The Bill seeks to define corporate liability as distinct from the liability of those running the organisation.

It has often been suggested to us that the offence should apply comprehensively to employing organisations, but the offence is not limited to the death of employees, so why should that be a criterion? We therefore approached the matter from a pragmatic angle and asked: what is the main mischief to be addressed? Does focusing on that mischief—the application of the law to large incorporated bodies—leave a significant gap?

On Second Reading, the hon. Member for Beaconsfield referred to a potentially serious gap and suggested that the Bill would not have applied to Lloyd’s Register of Shipping, which was prosecuted some years ago, as he said, following the collapse of a pedestrian walkway in Ramsgate. The case resulted in six fatalities and Lloyd’s Register, which had certified the walkway, was prosecuted, along with the design and build contractor and subcontractor, and port Ramsgate itself.

We are satisfied that there will be no gap in the law and that the offence would have applied to all four defendants in that case. We understand that Lloyd’s Register of Shipping is a registered industrial and provident society and as such, under the terms of the Industrial and Provident Societies Act 1965, it is a form of statutory corporation, not an unincorporated body.

Information from the Health and Safety Executive suggests that only 2 per cent. of its prosecutions are against unincorporated bodies, and typically those involve smaller businesses, as has been said, such as small building firms and sole traders, in which individual prosecutions are likely to be possible. The HSE has indicated also that very few prosecutions or other enforcement actions are brought against office-based industries such as estate agents and law or accountancy partnerships. That does not mean that the offence could never be applied to unincorporated bodies, but we consider that to be a question for the future. The Bill could be extended after the offence has been put in place. The Bill sets out a new basis for assessing an organisation’s liability, and we believe that that should be implemented and tested in practice before extending the manslaughter law to a new set of organisations.

I hope that that covers the points that the hon. Member for Beaconsfield raised on the consequences of our aims, although I am not against the possibility of returning to the matter. I shall look closely at his remarks to see what can be achieved, notwithstanding what I said about Lloyd’s Register of Shipping. However, on that basis, I hope that he will withdraw his amendment and make my hon. Friends happy.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Minister for his full response. I was intrigued by his comment on Lloyd’s Register of Shipping. Of course, it is true that as that prosecution fell under the 1974 Act, that issue didnot arise—it was peripheral. I remember someone highlighting the fact that it was an unincorporated association, and that issues were raised therefore—I have brought this to the Committee’s attention—about whether everybody had to be indicted by name or whether it could be done collectively. It can now be done collectively, but that was not clear at the time. I was not aware that it would have a corporate status as an industrial and provident society, and I do not think that that was raised in court during the course of the case—there was no reason why it should have been.

The Minister’s point is important, and it may be that any unincorporated association will have to carry out a survey. Such work as is carried out by Lloyd’s Register might well be covered by some form of incorporation other than as a limited company or plc. I acknowledge that possibility, which reinforces the argument that has been given to the Minister by the Health and Safety Executive, that there might be fewer examples than I had thought of unincorporated associations that could fall outside the scope of the Bill.

There is, however, one matter on which I disagree slightly with the Minister. He highlighted—rightly, I suppose—the fact that many small organisations, such as clubs, could potentially be covered by the Bill. I risk going over old ground, but he also pointed out that a distinguishing feature that we might wish to examine is whether an unincorporated association is an employer. The 1974 Act focuses on being an employer as the key issue that determines whether someone has responsibilities, albeit that someone goes over the limit and is covered by that Act only when they have a certain number of employees. At the risk of repeating myself, that highlights why the 1974 Act was so well drafted. It neatly encapsulated what I believe is the key matter with which the Committee is concerned: the duty of employers to their employees and others.

The moment somebody has a certain number of employees, it becomes incumbent upon them to think hard about their health and safety systems and ensure that they are carried out effectively. I am a member of barristers’ chambers—the one that I am in does a lot of health and safety work—and as we employ more than the statutory minimum, we had to start thinking about our health and safety. We had to bring in an outsider to carry out an audit. Ours being a Victorian building, I must admit to the Minister that the auditor came up with a long list of things that we should have been doing but were not. It was good for us to be compelled to do that.

So what about a club? I realise that many clubs have no employees at all, but some have four, five, six, seven or eight as an unincorporated association. They have duties to fulfil under the 1974 Act and they have to get an external audit. In those circumstances, why should they be exempt from the possibility of a corporate manslaughter charge if they are grossly negligent in the discharge of their obligations? I hate to sound like I am grinding down small organisations, which is rather opposed to my liberal nature. I say to the Minister that it is hard to distinguish a man who is operating a small carpentry or plumbing business with a few employees, is subject to the 1974 Act and is doing a job and running a company, from somebody who, just because he is unincorporated, will escape the scope of the Bill even though he is subject to the 1974 Act.

Ian Stewart (Labour, Eccles)

Will the hon. Gentleman therefore tell us what the difference is between the individual responsibility for manslaughter and the responsibility for corporate manslaughter in a company with only an individual or a couple of people?

Dominic Grieve (Conservative, Beaconsfield)

I suppose that it could be argued that in a small organisation such as a club—I believe I mentioned this earlier—if there is an accident and an employee is killed because the manager, who is also a member of the board, has been grossly negligent, he could be personally prosecuted for manslaughter. In reality, that is an unlikely scenario unless something quite extraordinary happens. A person would have to do something really gross for the Crown Prosecution Service to prosecute them in such circumstances.

That is a bit different from what we are doing. To begin with, the test of guilt that the Bill will bring in is lesser than that for ordinary manslaughter. I remind the hon. Member for Eccles that we are doing something odd in this Bill, and we shall come to consider it. Normally, the question of whether manslaughter has been committed is a matter for the jury in its entirety. In the case that we are discussing, it would not be because the judge would decide whether a duty of care was owed and only after that would the jury decide whether the duty had been breached. It is a strange, hybrid system, and quite interesting.

We could go round in circles arguing whether that provides lesser or greater protection to defendants, but my personal view is that it means that someone would be more likely to be convicted under corporate manslaughter procedures than as an individual charged with manslaughter. In this Bill, the test is creating an offence that is likely to be easier to prove against a corporation than against an individual. Obviously, corporate manslaughter of the old kind is very difficult to prove; I am keeping that completely out of the picture. However, I have stated my reaction to reading this legislation.

It is not that there are massive differences, but there are subtle ones that will make proving the necessary ingredients in a prosecution for corporate manslaughter easier than if a gross negligence manslaughter allegation—manslaughter in an industrial accident setting—were brought against an individual. The Minister may disagree, but that is how I see it. We can return to the issue when we come to the relevant clause.

The Minister has made some perfectly valid and sensible comments. I shall go away and think about the issues. I certainly do not want to create a situation oppressive to small organisations although, as I say, there is a slight irony: some small companies may regard the Bill as very oppressive, while other organisations that may be quite large will not be covered. However, a line has to be drawn somewhere in law; some people fall on one side and some on the other. There is always a grey area around the line, and people often feel that they should be on the other side.

Mindful of what the Minister has said, I shall go away and consider whether we should return to the issue on Report. In the meantime, I beg to ask leave to withdraw the amendment.