Journal

Should there be criminal liability for corporations?

By on
17

Debate about corporate manslaughter thrust into spotlight following Grenfell Tower fire

Grenfell Tower – Image credit: Instagram (@jamie_mursel)

Corporate manslaughter has come into the public consciousness because of the Grenfell Tower fire, which took place a year ago today. Many in the public, including MP David Lammy, have been calling for the disaster to be investigated as manslaughter in the criminal courts.

What is not discussed in the media is the perennial controversy surrounding corporate manslaughter and the idea of holding corporations criminally liable for deaths. A good many commentators and jurists, such as American professor Vikramaditya Khanna, argue that no such liability should be imposed.

It is important to get an overview of the complicated and troublesome law in this area before discussing the justifications. Corporate manslaughter used to be governed by the common law where corporations could be held liable for gross negligence manslaughter. The courts had trouble stretching and evolving criminal doctrines that were developed to deal with people to also cover corporations.

Concepts like actus reus and mens rea were especially hard to adapt to companies. What evolved from cases like HL Bolton v TJ Graham was what was known as the identification doctrine, which essentially held that the actions of the senior management could be imputed onto the company. This meant that if a person in the senior management was grossly negligent that could be attributed to the company and liability would be found. This was extremely complex and there was only one case in which the courts were able to successfully prosecute a company for manslaughter.

The common law was eventually abolished through the Corporate Manslaughter and Corporate Homicide Act 2007. The new law, which did not drastically depart from the common law, holds:

(1)An organisation to which this section applies is guilty of an offence if the way in which its activities are managed or organised-
(a) causes a person’s death, and
(b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.

But, should corporations be prosecuted for manslaughter? And are the aims of the criminal law being achieved through such prosecutions?

Khanna makes compelling points on why corporate liability should be abolished. Firstly, he notes that the criminal law has failed to effectively deal with corporate manslaughter. This is supported by the fact that under the common law there was only one successful prosecution, and there have been about 25 successful prosecutions under the statute.

Khanna further argues that the civil law is better suited to deal with gross negligence manslaughter. According to him, the civil law courts can assess the damage of a corporation’s negligence better and provide more flexible compensation to victims.

Want to write for the Legal Cheek Journal?

Find out more

Furthermore, unlike the criminal law, which uses ‘beyond reasonable doubt’ as its burden of proof, the civil law uses the less stringent ‘balance of probabilities’. This could lead to more practical justice as the burden of proof in the criminal courts is, in some cases, onerous.

The emphasis of Khanna’s argument is that the criminal law is not the most efficient means of dealing with death resulting from corporations.

On the opposite side of the argument is retired law professor Chris Clarkson, who is a proponent of maintaining corporate manslaughter. According to him, if corporations commit what amounts to manslaughter, they should on principal be held liable. Per Salomon v Salomon, corporations are awarded the benefit of legal personhood. It would be illogical and incoherent for the law to provide corporations with the legal benefits of personhood without also imposing the burdens.

Clarkson goes on to note that the criminal law provides a certain deterrence and censure the civil law cannot. In finding a corporation liable for manslaughter, its conduct is publicly condemned and its reputation tarnished. This provides a certain incentive to prevent such future harms as a company’s reputation is one of its vital assets.

Clarkson essentially argues that criminally prosecuting corporations for manslaughter achieves desirable consequentialist outcomes like deterrence and condemnation.

Clearly, there are compelling arguments on both sides of the debate. I, however, fall in the Clarkson camp. I believe it would be morally repugnant for the criminal law not to prosecute the gross negligence of companies that result in numerous deaths. It is important such tragically preventable deaths such as during the Grenfell disaster be unequivocally condemned in a court of law.

While corporate manslaughter should exist as a criminal offence it is important to note the law is severely in need of reform. The current law is wholly ineffective at prosecuting most corporations because of restrictive elements such as the senior management requirement. Hopefully, the law commission will reconsider the current law.

Rodney Dzwairo is a first-year law student at the University of Warwick. He’s an aspiring commercial solicitor.

Want to write for the Legal Cheek Journal?

Find out more

Please bear in mind that the authors of many Legal Cheek Journal pieces are at the beginning of their career. We'd be grateful if you could keep your comments constructive.

17 Comments

Corbyn.Sympathiser

Why should a company have to pay for the deeds of its directors? Thats totally unfair!

Companies are like babies – they are innocent because others are the controlling minds.

My own view is that we should make a pay cap of 30k for company directors and anything they earn over that should be given to homeless people and the poor. Then society would be more equal.

Anonymous

But who would provide all the extra tax money to pay for the gun towers and barbed wire you’d need to keep people inside your utopia?

Corbyn.Sympathiser

The bankers

Dave Cameron

The balance of probabilities is not less stringent than beyond reasonable doubt. Its the same test wrapped up differently.

In employment tribunals the standard of proof is ‘maybe’ and that should be brought in for criminal law too so that more criminals are convicted. Indeed, if you have been arrested and charged with a criminal offence, it is certainly possible to say you are ‘maybe’ guilty. In which case there would be no need for criminal courts at all and we would save loads of cash.

Anonymous

I’ll have you arrested and sentenced to changing my diaper when I soil myself for the rest of your life!

Anonymous

This post has been removed because it breached Legal Cheek’s comments policy.

Dave Cameron

Wow, so witty and clever!

Anonymous

That’s judge hobosexual, he means it literally. He needs someone to change his diaper for him because he’s an incontinent constantly blind drunk tramp

Anonymous

I think many members of the public would be surprised to be told that a corporate manslaughter conviction carries no penalty at all for any natural person (though the common law offence and health and safety offences can be committed by individuals within a company).

Onlookers might well say “what’s the point?” and agree with Khanna and many others that compensation through civil liability – which very often will be settled early – is much the better route to censure and remedy.

Blair really did go in for gesture law.

Corbyn.Sympathiser

I think you are wrong.

I know a man in Hong Kong.

The clock struck one, the man did a bong, and then had a game of ping-pong.

Init.

Corbyn. Sympathiser

Although I agree with your tax points above, you are a fraud, cosplayer, and in the parlance of Legal Cheek a “wannabe”. Please do desist in your fakery. If you really love me so much, I suggest you join the other many hundreds of my fans on these pages and set up a new site where you can discuss Jeremy’s glorious march to power and left wing utopia he will establish.

Anonymous

The point of it being a criminal offence is that the Company can be subject to large fines, much higher than the damages payable in a civil court in addition to having to pay damages in the civil court.

Anonymous

Rubbish. Civil and regulatory penalties will normally outstrip criminal fines by a wide margin.

The point about fines being additional is true, but irrelevant. There’s no evidence of deterrence at all through this offence, unlike HSE investigation, inspection and action.

Anonymous

Yes, there should be criminal liability for corporations. Families of victims (and indeed all right minded citizens) should be able to rely on the state to bring to justice those responsible for a death if it was the result of a criminal act. Allowing corporations to dodge criminal justice means that they could evade justice altogether given the funding issues of civil law. Pragmatism trumps pure ideology when it comes to dispensing justice.

Anonymous

Who are “those”?

The offences are committed by incorporated bodies, abstract things. The only *people* who might suffer hardship are the shareholders, pension funds (and pensioners) and lower level employees. None of whom are to blame.

Directors will just carry insurance or earn so much it doesn’t matter to them what happens to the company.

Anonymous

No. They just wanted to make a bit of cash, like all of us. They were not to have known the grim consequences.

Anonymous

For cases were a corporation is found criminally liable, you obviously can’t jail the corporate ledgers and jailing the directors, especially if not all were involved with criminal decisions, is not fair. But imagine if the courts had the statutory option to issue a winding up for criminal activity. Shareholders would be a helluva lot more involved (or at least interested) in corporate governance.

Join the conversation

Related Stories