This article is written by Amrit Kaur, a student of Dr B.R. Ambedkar National Law University, RAI, Sonepat. The article gives an overview of the Corporate Manslaughter and Corporate Homicide Act 2007 and also throws some light on India’s stance on the same.
Table of Contents
Introduction
Section 1 of the Corporate Manslaughter and Corporate Homicide Act, 2007 (CMCHA) establishes corporate manslaughter as an offence. The Act came into force on 6th April 2008 in the United Kingdom. The offence was established to make sure that corporations and other organizations are held accountable for significant failures on their part which results in the death of their employees. The offence of gross negligence manslaughter was repealed by this Act as it was related to the corporations and other organisations only.
The failure of common law crime of gross negligence to deal with death from corporate negligence spurred the adoption of the Corporate Manslaughter and Corporate Homicide Act promptly. While the Act was designed to eliminate common law inadequacies, it has further noticeably broadened corporate criminal liability by ‘removing doctrinal barriers’.
Corporate manslaughter is wider in scope than the prior offence under the common law. It applies to only the most significant company failures. There is a high culpability threshold that requires proof that there is a serious violation of the applicable duty of care. It is no longer required to demonstrate, however, that a person who was the organization’s ‘control mind’ was personally responsible for the crime. Responsibility for the offence is evaluated by considering the faults of the entire organization.
Meaning of corporate manslaughter
The statutory offence of corporate manslaughter was brought up in the UK to ensure that effective laws are in place for prosecuting the organisations, where the appropriate management of health and safety has not been given the required attention, which therefore further gives fatal results. Introduction of this Act was the Government’s response to the First Joint Report by the Home Affairs and Work and Pensions Committee (2005/06 HC540).
In simple words, an organisation is said to commit corporate manslaughter if the manner in which its operations are managed or organised, including a significant contribution by its ‘senior management’, causes death, and thus amounts to a gross breach of a relevant duty of care owed by the organisation towards the victim.
According to Section 1(6) of the Corporate Manslaughter and Corporate Homicide Act, an organisation that is found to be guilty of corporate manslaughter or corporate homicide is liable for a fine. Also, because the defendant is a company entity, therefore the penalty upon it, is fine only.
Main elements of the offence
- The defendant is a qualified organization;
- The organization owed to the victim a corresponding duty of care;
- Presence of a gross violation of the responsibility by the organization;
- The way in which the organization’s activities are conducted and managed by its seniors;
- Management was a key component in the violation; and
- The grave violation of the responsibility of the organization caused or contributed to the death.
Further, in the cases of corporate manslaughter, the prosecution needs to demonstrate that the violation of the duty of care has caused the death. The question in such cases is whether the violation contributed to death more than minimally. The court, in such cases, has the authority to issue auxiliary orders including remedial orders and publicity orders. The Sentence Council, with effect from 1 February 2016, further released comprehensive sentencing guidelines. As per the guidelines, the sentence level will depend on the organization’s size. However, the range of £180,000 to £20 million was stated.
It is to be noted here that the Special Crime Unit, that is, the Special Crime and Counter-Terrorism Division is to be reported for situations that might lead to corporate manslaughter, with the exception of cases involving unincorporated partnerships.
The Corporate Manslaughter and Corporate Homicide Act, 2007
It has been more than a decade since The Corporate Manslaughter and Corporate Homicide Act was introduced in the United Kingdom. While the Act has transformed the legal environment of corporate deaths in the United Kingdom (and indeed a highly justified disincentive to ‘lax health and safety standards’), the inherent uncertainties in the rules do not make it fully effective. This Act was important because it created for the first time in the UK a specific offence for corporate killing. This change was largely appreciated, although a large number of scholars and practitioners criticized the ineffectiveness of the Act and asked how successful it would be.
The Act has also been a disappointing compromise because there were fewer prosecutions than predicted, many times there was an unjustifiable inconsistency in sentencing, a continued lack of individual accountability and a prosecutor’s preoccupation with a limited range of defendants. The Act’s attempt to draw a clear line between organizational and individual culpability created issues.
The crime under the Act could be proven in particular only if the management failures are committed by the senior management of the corporation. If the failures are exclusively at the junior level, an organization is not responsible. The failures of the senior management must be a significant component of the violation. The failure at the senior management level, however, does not have to be a gross violation of the obligation in itself. This requirement has clarified the legislation at the outset. The problem of fulfilling the ‘legal identification test’ in the common law crime of manslaughter was substantially solved by removing the necessity to link the breach with one or more specific director(s) of the organisation. However, the equivocal notions of ‘senior management’ have been very questionable for the success of the prosecution of corporate homicide.
Meaning of senior management
Senior management, under Section 1(4) of the Act, refers, in relation to an organization, to persons who have a major role in:
- the decision-making process of how to manage or organize the entire or a substantial portion of their activities.
- the actual management or coordination of the entire activity or the major portion thereof.
Although the word ‘senior management’ might seem to be clearly defined by the law, it remains, however, completely uncertain about the scope of ‘senior management’. The concept of this term has been described as a limited definition and somewhat ambiguous and has also been criticized by many academicians.
The efficacy of this ‘senior management’ test has not been extensively analyzed since only the ‘overwhelmingly micro-, small- or occasionally medium-sized organizations’ have been successfully convicted. Fortunately, in the case of R v. Cornish (Errol) (2015), the court provided some guidance about the test particularly in situations involving organizations with complicated organizational systems.
R v. Cornish (Errol) (2015)
This case is considered a landmark case under the Corporate Manslaughter and Corporate Homicide Act of 2007. Also, this case led to the first prosecution of the health service body since the implementation of the Act in 2008. In this case, Judge Coulson has explained the duty of the prosecution to satisfy the ‘senior management’ test. The court held that rather than determining the ‘controlling mind’, the prosecution would have to determine ‘the lowest level of the senior management team…that is guilty of this offence’, in other words, any management below the level designated would be irrelevant to the matter at hand. This can be viewed as a way to get around the problematic identification doctrine that existed in common law previous to the introduction of CMCHA.
However, there is still a need for further clarification by the judiciary about this criteria, and it must be noted here that R v. Cornish was simply a judgement at the level of the Crown Court. It is also suggested that the ‘senior management’ test be subjected to further scrutiny, meanwhile, the case of R v. Cornish (Errol) may highlight the necessity for the test to be further developed/explored in situations involving major businesses.
In many cases, there has been a failure on the part of the plaintiff to prove ‘gross’ breach on the part of the defendant which is thus, a relatively high bar, that is, conduct that can be described as something which is ‘so reprehensible’ or ‘so atrocious’ and thus deserves a criminal sanction. Both larger and complex organisations still have relative immunity under the Act as compared to smaller or medium corporations. The Act has furthermore reduced individual liability and reinforced the corporate veil. Moreover, there have only been just 25 successful corporate manslaughter convictions in the United Kingdom up to September 2017.
Visualizing whether the legislation is fit for its purpose or not
Cynical analysts see the Act as effective only in making a symbolic message about corporate accountability, which later struggles to implement in practice. Though the Act appears to be generating a broad crime in terms of the bodies to which it will be applied and the duties of care which will help in triggering the liability, these are drastically limited by the technical qualifications fundamental to the all-important duty of care question and by the various and far-reaching exclusions designed to protect the corporations and organisations. The levels of complexity help to limit liability considerably more than what might appear at first glance, which causes substantial issues in practice.
There also appears to be a contradiction between a broad deregulation push on the one hand and a particular legislative push to prosecute some firms following workplace deaths in the shape of the CMCH Act on the other.
Given the number of deaths in the context of occupational health and safety, the Act never goes to significantly lessen the problem of corporate murdering, as was noted in the Regulatory Impact Assessment of the Act, which predicted just 10–15 convictions each year. If the goal was to hold larger more sophisticated companies responsible for workplace fatalities, the jury is still out, literally. Finally, if the goal of the law was to be symbolic, it begs the question of whether symbolism is based on the existence of the law rather than its use, if the latter, the law’s legitimacy must surely be questioned given that it was only used 21 times in nine years and 21 years after it was first proposed. Of course, the net consequence is that corporate homicide is an area of activity that does considerable harm but is essentially non-decriminalised or decriminalized. Thus, the legislation has not proved to be fit for the purpose for which it was established and all this calls for a reform in the current policy.
The silence of India’s legislation when it comes to corporate manslaughter
In India, corporate manslaughter is not a particular legislative offence. The Indian Penal Code (IPC) 1860, on the other hand, covers offences of a similar type.
A ‘person’ under the Indian Penal Code is defined as a company, association, or group of individuals, whether or not they are incorporated. As a result, whatever offence committed by a person and the resulting punishment, can likewise be applied to a corporation.
The malicious intent of the ‘alter ego’ of the company/body corporate (that is, the person (or group of persons) that guides the company’s business) was imputed to the corporation in the case of Iridium India Telecom v. Motorola Inc and Others (2010), with the Supreme Court stating that, “a corporation is virtually in the same position as any individual and may be convicted of common law as well a statutory offence including those which require mens rea (that is, a criminal intention)”.
In India, the corporate killings take place mainly because:
- Adulterated goods produced by corporations, which result in the death of consumers and workers.
- Deaths due to environmental catastrophes caused by the corporations.
- Harmful and dangerous working conditions at the workplace.
Various legislations have been made to deal with such situations. However, there is no legislation that exclusively deals with the crime of corporate manslaughter and hence there is a requirement for separate legislation and also a need to adopt the standard of punishments imposed under the 2007 Act of Corporate Manslaughter and Corporate Homicide as in the UK.
Regulatory provisions governing corporate manslaughter in India
As stated earlier, ‘corporate manslaughter’ is not expressly mentioned under Indian laws. Thus, for the time being, corporations may be held liable for criminal responsibility under the Indian Penal Code depending on the kind and substance of the offence. The relevant sections of the IPC under which a corporation can be punished for corporate manslaughter in India are as under:
Culpable homicide
Section 299 of the IPC deals with the same.
Murder
Section 300 of the IPC deals with murder.
Causing death by negligence
Section 304A of the IPC deals with the crime of causing the death of a person by negligence.
Negligent act likely to spread infection of disease dangerous to life
This crime is dealt with by Section 269 of the IPC.
Malignant act likely to spread infection of disease dangerous to life
Section 270 of the IPC deals with the same.
Negligent conduct with respect to poisonous substance, fire or combustible matter, explosive substance, machinery
Section 286 of the IPC deals with the same.
Negligent conduct with respect to pulling down or repairing buildings
Section 288 of the IPC deals with this crime.
Conclusion
The Corporate Manslaughter and Corporate Homicide Act, 2007 was established in the UK with a motive to reform the gross negligence offence of the common law but the Act has itself proved to be inefficient and thus needs to be reformed. There have been various discrepancies in the Act which need to be looked upon. Meanwhile, India does not have any specific legislation for punishing corporate manslaughter and it uses various provisions of IPC to punish corporate killing which thus, calls for the need for specific legislation targeted at corporate manslaughter to be brought in for India.
References
- https://uk.practicallaw.thomsonreuters.com/w-009-8778?transitionType=Default&contextData=(sc.Default)&firstPage=true
- https://www.lawcolumn.in/corporate-manslaughter-and-corporate-homicide-a-comparative-analysis-and-its-exigency-in-india/
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