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A large number of people die in public disasters, including factory and building site disasters, each year, many of which could and should have been prevented.[1] Such public disasters call for corporations to be prosecuted under the law of manslaughter.[2] There is a widespread feeling among the public that responsibility in appropriate cases should be fixed on culpable employers who operate and profit from the service they provide to the public, rather than, as is currently the position under the criminal law, on the comparatively junior employees whose acts or omissions caused death. The fundamental cause of many disasters is the failure of management to put in place effective systems and practices for controlling the risk of harm. Tragedies such as the Air New Zealand Mount Erebus crash in 1979,[3] the 1987 Zeebrugge ferry disaster in British waters,[4] the 1992 Westray mine explosion in Canada,[5] and the 1998 Esso Longford gas plant explosion in Australia[6] were all followed by inquiries which found corporate bodies at fault and meriting very serious criticisms.[7]
Since 1992 there have been 34 prosecution cases for work-related manslaughter in the United Kingdom but only six, small, organisations have been convicted.[8] This is due to the limitations and obscurities apparent in the current law. Failures to successfully prosecute corporate defendants have led to an apparent perception among the public that the law dealing with corporate manslaughter is inadequate.
Corporate manslaughter has been an issue of academic and legislative debate in many countries around the world, particularly in the last decade.[9] The English Law Commission first voiced its concerns in 1994, and it was from this initial discussion that the draft Corporate Manslaughter Bill issued in March 2005 which proposed a special corporate killing offence, was born.[10] The Governments of Australia and Canada, in 1995 and 2003 respectively, amended their Criminal Codes to bring corporations within the full gamut of the criminal law, including liability for offences punishable by imprisonment, such as manslaughter. Specifically, in the Australian Capital Territory an 'industrial manslaughter' offence is now in its statute book. Corporate manslaughter has also been addressed in many other civil law jurisdictions.[11]
However, there has been a lack of discussion on corporate manslaughter in New Zealand academic commentary and within the New Zealand legal profession. The purpose of this article is to address the gross failure of a company in New Zealand to set up an adequate system of conducting its operations to avoid harm. This article also proposes an offence of corporate manslaughter for New Zealand. To achieve this, the substantive law pertaining to corporate manslaughter and the developments in other common law jurisdictions will be examined. Comment is made on sentencing issues, but other issues, such as the territorial application, regulatory impact, investigation and prosecution of the proposed offence, are not considered in this article.
Manslaughter, in the context of this article, refers only to 'involuntary manslaughter.'[12] Moreover, this article only considers corporate manslaughter that is not a crime of conscious wrong-doing, that is, manslaughter due to neglect or omission.[13] 'Subjective manslaughter', insofar as it affects companies, will continue to be adjudicated according to the general principle of identification.[14] This is not unreasonable because the crime depends on significant culpable conscious running of a risk -for this liability to attach to a corporation, conscious decision-making by a senior officer would seem to be required).[15]
There has never been any doubt that members or officers of a corporation cannot shelter behind the corporation and may be successfully prosecuted as individuals for any criminal acts they have performed or authorised. The current general position under the common law is that a corporation is in the same position in relation to the criminal law as a natural person, and may be convicted of crimes including those requiring mens rea.[16] Companies may also be convicted of crimes punishable by penalties apposite only to natural persons.[17] There are now only a handful of crimes in New Zealand for which a company may not be convicted;[18] these include the offences of perjury,[19] bigamy[20] and homicide, including murder and manslaughter.[21]
A company is a legal person[22] without physical human existence, therefore, two main techniques are used for attributing to a corporation the acts and state of mind of its human agents. The first technique is the doctrine of vicarious liability, which, broadly, holds a company liable for harm to another person caused by an employee while in the scope of his or her employment in situations where an individual employer would be liable for such harm. The second technique is conveniently called the doctrine of 'identification', where the company may be held liable because the acts done by its human agents who are deemed to be in control of the company are treated, for the purposes of criminal liability, as acts done by the company itself. Where neither technique applies, a corporation is not criminally liable.[23]
It is a long-established common law rule that vicarious liability does not form part of the criminal law, even though civil law has long held that an employer may be responsible for the torts of its employees acting in the course of their employment.[24] However, under the criminal law, offenders are generally only answerable for their own acts or omissions.[25] A defendant will normally only be liable for the actions of its servants on the basis of being a party to those actions.[26]
However, vicarious liability may be found for the offences of public nuisance and criminal libel. Vicarious liability may also apply in circumstances where statutory offences which clearly impose responsibility upon a defendant for the acts of its servant or agent, where failure to hold the employee or principal liable for the acts of its servant or agent would be to 'render nugatory' the statute creating the offence and thus defeat the will of Parliament.[27] Liability may be established without mens rea on the part of the defendant, therefore, it follows that this form of liability is likely to be relatively rare. It is typically confined to legislation which regulates liquor licensing and the distribution of foodstuffs.[28] Simester and Brookbanks write that there does not appear to be any legislative tendency to expand the scope of vicarious liability outside of these areas.[29]
The principle of identification now applies in situations where vicarious liability does not apply. The so-called 'rules of attribution' are used to determine which acts of a human agent count as the acts of the company, and thus determine the circumstances in which a company may be liable for the acts and mental state of an individual. The principle of identification, and the clear distinction between it and the doctrine of vicarious liability, was described by Lord Reid in the leading authority of Tesco Supermarkets Ltd v Nattrass:[30]
[A company] must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his act is the mind of the company. There is no question of the company being vicarious liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company ... and his mind is the mind of the company. If it is a guilty mind than that guilt is the guilt of the company.
The basic rule of attribution is that, for an individual's conduct and state of mind to be identified with the company, he or she must be in control of the company or a sphere of its activities.[31] The court in Tesco stated that the rule requires the identification of the 'directing mind and will' of a corporation, the process of such identification being a question of law.[32] However, there are two qualifications to this requirement.
First, where there is a difference between the nominal and the effective authority within a company, the courts will attribute the actions of an individual on the basis of the particular company's actual as well as its legal management structure. In Meridian Global Funds Management Asia Ltd v Securities Commission,[33] a company was held liable for the acts of an investment manager who breached the notice requirements in the New Zealand Securities Amendment Act 1988, despite the manager only being in de facto control of the company with nominal authority remaining in the hands of his superior. Therefore, provided that the person speaks and acts as the company, and is in actual control of company operations, liability may attach to the company.[34]
Second, where generalised rules of attribution defeat the legislative intention that a particular law was intended to apply to companies, the court must fashion a special rule of attribution 'tailored ... to the terms and policies' of the particular substantive rule.[35] The use of the 'directing mind and will' formula was specifically rejected by the Privy Council in Meridian because it suggests that only the actions, knowledge and intention of those in senior management positions could ever be attributed to the company. In Meridian the Privy Council said that whether the actions, knowledge and intention of a particular individual may be attributed to a company remains a matter of construction of the legislation's intention in each case.[36] Thus, the determination of those whose actions are to be attributed to the company is not solely the province of the company's internal hierarchy. Rather, it is the nature of the functions performed by the individual that is crucial.[37]
The Court of Appeal in R v Murray Wright[38] held that homicide, including both murder and manslaughter, cannot be committed by a company as a principal because of the definition of homicide in s 158 of the Crimes Act 1961 as the 'killing of one human being by another'.[39] However, s 66 of the Crimes Act 1961, governing secondary participation to an offence, does not mention the term 'human being' and therefore a company may be liable as party to homicide.[40]
However, in the United Kingdom an indictment for manslaughter now lies directly against a corporation. Originally, Finlay J in the 1927 decision of R v Cory Bros Ltd,[41] quashed an indictment against a company for manslaughter on the basis that homicide required the killing to be done by a human being. However, in 1944 Stable J pointed out that Cory Bros was decided before the identification principle was developed and he was of the view that the case would be decided differently if the matter came before the court again.[42]
The issue was finally settled in 1990 in the United Kingdom Criminal Court decision of R v P & O European Ferries (Dover) Ltd.[43] In that case Turner J comprehensively reviewed the authorities in the United Kingdom and some other jurisdictions (including Murray Wright in New Zealand)[44] and concluded that an indictment for manslaughter could lie against a corporation.[45] His Honour reviewed statements in works such as those of Coke, Hale, Blackstone and Stephen (who drafted New Zealand's original Criminal Code) that defined homicide as killing by a human being, however, he dismissed these statements as not being exclusive because at the time that these definitions originated the concept of corporate criminal liability was not in existence or even in the contemplation of the courts or academic writers.[46] Turner J further reasoned that any crime, in order to be justiciable, must have been committed by or through the agency of a human being. Therefore, the inclusion of the expression 'human being' in the definition of homicide was either tautologous, or more probably intended to differentiate those cases of death where a human being played no direct part from those in which the cause of death was initiated by human activity using an inanimate instrument of death, or using an animate but non-human instrument. Turner J concluded that the identification doctrine had transformed corporate liability by enabling the imputation of mens rea to a corporation and therefore enabling it to be convicted of an offence requiring a mental element:[47]
Since the nineteenth century there has been a huge increase in the numbers and activities of corporations ... A clear case can be made for imputing to such corporations social duties including the duty not to offend all relevant parts of the criminal law. By tracing the history of the cases decided by the English Courts over the period of the last 150 years, it can be seen how first tentatively and finally confidently the Courts have been able to ascribe to corporations a 'mind' which is generally one of the essential ingredients of common law and statutory offences ... Once a state of mind could be effectively attributed to a corporation, all that remained was to determine the means by which that state of mind could be ascertained and imputed to a non-natural person. That done, the obstacle to the acceptance of general criminal liability of a corporation was overcome ... [T]here is nothing essentially incongruous in the notion that a corporation should be guilty of the offence of unlawful killing ... [W]here a corporation, through the controlling mind of one of its agents, does an act which fulfils the prerequisites of the crime of manslaughter, it is properly indictable for the crime of manslaughter.
Thus, it is clear that in the United Kingdom an indictment for manslaughter can lie against a corporation primarily because of, as Turner J reasons, the identification principle. Furthermore, as already noted, the Privy Council's decision in Meridian Global Funds Management Asia Ltd v Securities Commission[48] held, rejecting the 'directing mind and will' formula, that a special rule of attribution 'tailored ... to the terms and policies' of the particular substantive rule must be fashioned where generalised rules of attribution defeat the legislative intention that a particular law was intended to apply to companies. At common law today the general rule is that a corporation is in the same position in relation to the criminal law as a natural person, and thus the ability to try a company for manslaughter in New Zealand would further the objectives of the criminal law. As Simester and Brookbanks contend:[49]
Indeed, it is arguable that corporate liability should be more wide-ranging than it presently is, in that the current barrier to liability as principal for homicide is anachronistic and out of step with the law in other jurisdictions. There is no obvious reason why a company should avoid liability as a principal on a charge of manslaughter. Indeed, the potential for serious injury and death that may be caused by negligent and wilful corporate activity powerfully supports amending the law to allow such prosecutions to proceed. Growing concern about the need to establish a corporate 'safety culture'[50] and the emerging view that corporations should be culpability-bearing agents in their own right, as implied in the notion of personal corporate liability, hint in the direction of future reform ...
Thus, it is submitted that Murray Wright would not be decided in the same way today. An indictment for manslaughter should be able to lie against a corporation in New Zealand.
In New Zealand, 'involuntary manslaughter' describes killings where the defendant is guilty of culpable homicide, but not guilty of murder; manslaughter under provocation; killing in furtherance of a suicide pact; or infanticide. Its scope is exceptionally wide and depends on the definition of culpable homicide in s 160(2) of the Crimes Act 1961. For the purposes of corporate manslaughter, s 160(2)(b) is the relevant section, which provides that:[51]
(1) Homicide is culpable when it consists in the killing of any person-
(b) By an omission without lawful excuse to perform or observe any legal duty;
Sections 151-153 and 155-157 of the Crimes Act 1961 codify certain 'duties tending to the preservation of life' which were recognised at common law, and provide for criminal responsibility where harm may have resulted from a mere omission or, an omission to comply with a legal duty.[52] However, s 160(2)(b) refers to 'any legal duty' and the Court of Appeal has held that this includes duties recognised by the common law as well as by statute, and even the common law version of a codified duty.[53] The mens rea requirement for involuntary manslaughter by omission is gross negligence. Section 150A of the Crimes Act 1961 states that in respect of the legal duties specified in ss 151-153 and 155-157, the omission or neglect is required to be 'a major departure from the standard of care expected of a reasonable person to whom that legal duty applies in those circumstances'.[54] For a breach of a common law duty, gross negligence will also be required.[55] For the purposes of this article, the offence will now be referred to as gross negligence manslaughter. The English Court of Appeal in Attorney-General's Reference (No 2 of 1999)[56] stated that 'the identification principle remains the only basis in common law for corporate liability for gross negligence manslaughter'. The effect of this proposition was illustrated in the prosecution against P & O European Ferries (Dover) Ltd.[57] The prosecution came as a result of the tragic capsizing of the ferry, Herald of Free Enterprise, with the loss of 150 passengers and 38 crew members. The immediate cause of the capsize was that the ferry had set sail with her inner and outer bow doors open.[58] The prosecution against the company ultimately failed because Turner J directed the jury that in order to convict it of manslaughter, one of the individual employees who could be 'identified' with the company would have to be guilty of manslaughter.[59] On this basis, the case against the company had to fail because there was insufficient evidence on which to convict any of the individual defendants under the fault requirement for involuntary manslaughter at the time, being Caldwell recklessness.[60]
Thus, Turner J ruled against the adoption into English criminal law a rule of 'aggregation.' This rule would have aggregated the faults of a number of individuals where none of the faults individually amounted to the mental element required for manslaughter, because in their totality they amounted to such a high degree of fault that the company could have been convicted of manslaughter.[61] Therefore, liability was contingent upon the finding of one individual who, by himself or herself, satisfied the entire mental element of manslaughter, and thus was himself or herself guilty of the crime.
Even if Turner J had the benefit of approaching the issue of individual liability on the basis of gross negligence (the required mental element for involuntary manslaughter today), rather than Caldwell recklessness, the United Kingdom Law Commission was of the view that[62]
it seems likely that he would have reached the same conclusion. The dominant test remained the test set out in Bateman,[63] of doing something which no reasonably skilled doctor would have done. On this approach, based as it is on the practices of the relevant profession or industry, it would have been difficult to prove that the mode of operation of this ship, although not that of other companies, fell seriously below prevailing standards.
The identification doctrine has been criticised. The difficulty lies in identifying the person or people who are the embodiment of the company. As Wells points out, the more diffuse the company structure (which is extremely common in large modern New Zealand companies), and the more developed the powers that are given to semi-autonomous managers, the easier it will be to avoid liability.[64] Field and Norg have revealed that there is an increasing tendency for many organisations to decentralise safety services in particular, often deliberately, and some companies use contract laboratories to conduct their safety research.[65]
Although the Privy Council's decision in Meridian[66] has restated the identification principle so that it is the nature of the functions performed by the individual that is crucial, rather than their position in the company, there are still problems with the identification doctrine which were highlighted by the P & O European Ferries decision.[67] If no single individual (or group of individuals) had the function or responsibility for safety matters, as it was in that case, it becomes almost impossible to identify the controlling officers for whose shortcomings the company could be liable.[68] Furthermore, Turner J held that individual defendants who could be 'identified' with the company would themselves have to be guilty of gross negligence manslaughter. The prosecution failed despite the findings of a judicial inquiry (published in the Sheen Report) that all who were concerned in management of the ferry company must be regarded as sharing responsibility for the failure of management and that from top to bottom the corporation was infected with the disease of sloppiness.[69] The result of the identification principle has been that in the United Kingdom there have been 34 prosecution cases for work-related manslaughter since 1992, but only six, small, organisations have been convicted, illustrating the failure to convict primarily large companies with complex management structures.
The Health and Safety in Employment Act 1992 puts primary responsibility on employers to take all practicable steps to ensure the safety of workers and others while at work. Section 15 of the Act states that 'every employer shall take all practicable steps to ensure that no action or inaction of any employee while at work harms any other person.' In relation to employees, s 6 states that employers[70] have a general duty to take 'all practicable steps'[71] to ensure the safety of employees at work and, in particular, to provide and maintain a safe working environment and facilities for the safety and health of employees at work.[72]
An employer, or any other party with duties under the Act, is liable to be punished by a fine not exceeding $500,000 or imprisonment for a term for not more than two years if the offence is likely to cause serious harm to others, and up to $250,000 for other offences.[73] In addition, section 56 states that where a corporation has breached the Act, any officer, director, or agent who has 'directed, authorised, assented to, acquiesced in, or participated in' the failure is a party to and guilty of the failure and is liable on conviction to the punishment provided for the offence, whether or not the corporation has been prosecuted or convicted. Section 56, however, is rarely used and the Department of Labour's Occupational Safety and Health Services own guidelines indicate that unless an officer, director or agent had clear knowledge that the situation was unsafe or in breach of the Act, inspectors should simply proceed against the company. Some commentators believe that the existence of the Health and Safety in Employment Act 1992 renders otiose the need for a corporate manslaughter offence. They contend that the only added advantage of such an offence is stigma.[74]
However, despite the existence of similar regulatory regimes dedicated to dealing with workplace health and safety overseas, there are calls both overseas and domestically for a more effective legal response in those very serious cases resulting in death or serious injury.[75] The arguments reflect the view that the Act fails to properly reflect the moral outrage that the community feels when a death occurs through the gross negligence of the employer, and fails to reinforce the notion that all workplace fatalities are unacceptable.[76] This is borne out by factors such as the offences not being indictable and, therefore, generally prosecuted in the lower courts;[77] that prosecution is considered only a last resort;[78] that the fines imposed by the courts are generally small;[79] fines for large corporations are not sufficiently punitive and therefore lack the necessary deterrent and retributive effect;[80] and the small number of proceedings against senior officers of corporations.[81]
Furthermore, Parliament increased fines to the current levels in 2003 to fortify the legislation,[82] and yet the number of workplace accidents in New Zealand and the average fine for a health and safety prosecution has not really changed.[83]
The reasons in favour of and against extending corporate liability for manslaughter are briefly listed below.[84] This list, however, is by no means exclusive. Furthermore, any arguments against the principle that a corporation may be liable for corporate manslaughter has already been dealt with[85] - the discussion that follows only concerns practical reasons for or against extending the law, and is based on the premise that indictment against a corporation for manslaughter is possible in New Zealand. However, it should be borne in mind the reason why corporations were established in the first place. In particular, the advantage of limited liability and separate legal personality has allowed incorporated organisations to succeed and in turn benefit society.[86]
The reasons in favour of extending corporate liability for manslaughter include:
• The need to give practical effect to the recently established principle in England that an indictment lies against a corporation for manslaughter, rather than rely on the problematic identification doctrine.
• The need to restore public confidence in industry and enforcement bodies, and address the overwhelming public concern expressed over the leniency shown to workplace deaths compared to other forms of homicide occurring outside the workplace. Furthermore, criminal law prosecutions may strengthen the public perception of the importance of safety at work and counter the view that negligence in the work context is regarded less seriously by the state than deaths caused negligently outside the workspace.[87]
• In practice, the negligence of a single individual is rarely the sole cause of death or personal injury at the workspace. Rather, they are generally the result of failure in systems for controlling risk and the carelessness of an individual or individuals is also a (more or less important) contributory factor.
• Deterrence.
• The availability of different types of sentence other than just fines such as 'equity fines' and corporate probation to rehabilitate a corporation in ways not open to individuals.[88]
• The inadequacy of the regulatory offences in Health and Safety in Employment Act 1992 in New Zealand.[89]
• The fact that corporate manslaughter is on the legislative agenda overseas, and that in fact an industrial manslaughter offence has been enacted in the ACT (the smallest jurisdiction in Australia). Furthermore, in reviewing an extension of the law, New Zealand has the benefit of observing such movements overseas and does not have to start with a clean slate.
The reasons against the extension of corporate liability for manslaughter include:[90]
• The aim that those responsible for the conduct of activities which might affect public safety from causing harm to employees or members of the public is best achieved by imposing personal liability on those who undertake such activities, not corporate liability.
• However, where the inadequate management or organisation of a corporation has caused or contributed to a death, it is often difficult in practice to identify any individual who is at fault, especially where an omission to act is involved. The P & O European Ferries decision is a striking illustration of this point.[91] This article supports the view of the English Law Commission that there is an overpowering argument, on public policy grounds, that a corporation should be liable for a fatal accident caused by gross negligence in the management or organisation of its activities.[92]
• Where a major disaster has occurred, witnesses would be reluctant to give evidence to any subsequent inquiry for fear that criminal prosecutions might follow. However, this argument applies only to major disasters - many of the cases that this article is concerned with did not involve a major disaster (and hence no inquiry took place). Moreover, this problem is not peculiar to cases of corporate liability, and may also arise in prosecutions against individuals.[93]
• Over-regulation is gradually making the more hazardous business activities (such as, demolition work, etc) uninsurable, and as a result, costs will greatly increase.
• The overseas experience shows that bringing reforms into effect take far too long.[94] One reason for this is the lack of consensus between industry, the unions and interested pressure groups about what form such reforms should take, and whether reform should be introduced at all.
The strong arguments in favour of extending the law pertaining to corporate manslaughter lead to the conclusion that reform in New Zealand is required. The purpose of this article is to address the problem of the gross failure of a company to set up an adequate system of conducting its operations to avoid harm, irrespective of whether or not an individual within the corporation is liable. In light of the arguments against the extension of liability mentioned in the previous section, any option for reform must specifically address this problem, and not go too far. The options for reform below are only considered briefly, because it is the view of the author that the only sensible and effective option is to legislate a special offence of corporate manslaughter.
Two important cases have been recently decided. The first case is R v British Steel Plc,[95] where the English Court of Appeal construed s 3(1) of the Health and Safety at Work etc Act 1974 (UK) as imposing vicarious liability. Section 3(1) provides:
It shall be 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 or safety.[96]
In this case, a steel platform which was supported by four supports was cut free, without first being secured to a crane or other prop, thus collapsing and killing a worker. The Court of Appeal upheld the conviction of British Steel, holding that, subject to the words 'so far as is reasonably practicable', s 3(1) created an absolute prohibition. The Court of Appeal accepted that its decision might result in the imposition of liability on a corporation where, for example, an employee merely dropped a spanner or drove without due care and attention. However, the Court reasoned that in some cases this would not be an absurd result as the incident might have occurred because at some level in its hierarchy the corporation's system had broken down. For example, the driver's carelessness might have resulted from attempting to meet excessively tight schedules or from tiredness due to over-long hours of work. In other cases prosecution was unlikely or, if brought, would probably result in an absolute discharge and a refusal of an order for the defendant to pay the prosecution's costs.[97] Furthermore, the Court of Appeal rejected the argument that the principle of identification applied, the effect of which would reduce time in trials by dispensing with the need to examine whether particular employees were part of senior management. Lord Steyn concluded that the effect of this judgment would be to simplify the law and enable employers and employees to know where they stood in relation to the law. Additionally, it would promote a culture of guarding against risks to health and safety caused by hazardous industrial activity.[98]
The second case is the New Zealand Court of Appeal decision of Linework Ltd v Department of Labour,[99] a case involving s 6 of the Health and Safety in Employment Act 1992, a similar provision to s 3(1) of the Health and Safety at Work etc 1974 (UK).[100] The Court of Appeal preferred the approach taken in British Steel to that in a 1994 House of Lords decision.[101] The Court supported the reasons proffered by Lord Steyn above, which it
said were particularly relevant to New Zealand where, in comparison to other jurisdictions, the accident compensation scheme has to some extent reduced the incentive for an employer to ensure the safety of its workers, as an injured party cannot sue for compensatory damages.[102] Additionally, like British Steel, under the New Zealand statute there was no need to identify the 'directing mind' of a corporate employer as required under the identification doctrine.[103] However, unlike British Steel, s 6 was held not to invoke the doctrine of vicarious liability. Tipping J explained:[104]
The analysis did not depend on [the status of the person at fault] within the employer company, or upon concepts of agency or vicarious liability. It relies simply upon the proposition that once there has been a failure to take a practicable step to ensure the employee's safety, the employer is [personally, not vicariously,] responsible for that failure.
It could be argued that the decisions of British Steel and Linework render otiose the need for legislative extension of corporate manslaughter. If so, all that may be recommended is that where the relevant breach of duty has resulted in death, the Health and Safety in Employment Act 1992 offences should be triable only on indictment, or, perhaps, that a new offence along the lines of section 6 of the Act should be introduced which is triable only on indictment and relates specifically to cases where death has resulted.[105] However, this option would go too far for New Zealand. First, it would virtually make the corporation strictly liable for the acts or omissions of any employee which resulted in the death of another, rather than impose on a corporation liability where it was to blame for the death because the death arose from the (grossly) careless way in which it organised or managed the conduct of its activities. Second, it would render the company liable without regard to the seriousness of the breach in question.[106]
Vicarious liability has been adopted in many United States jurisdictions to extend corporate liability. In brief, a corporation can be liable for a crime committed by any employee of the corporation if it is committed within the scope of the employee's employment and the act or omission which constitutes the crime is intended to benefit the corporation.[107] However as has already been stated, in New Zealand it is a long-standing and fundamental rule that vicarious liability does not form part of the criminal law.[108] More importantly, vicarious liability is criticised because it automatically, and unfairly, penalises a company for the fault of one of its employees even where it had taken considerable measures to prevent the kind of incident that caused the death.[109] It seems unrealistic to expect directors and senior management of a company to oversee in person the actions of a workforce that may be numbered in the thousands.[110] Furthermore, because vicarious liability depends upon proof that an individual employee has committed an offence, it introduces the often practical difficulty in identifying such a person.[111]
The 'aggregation' principle would enable the court to 'aggregate' the conduct and mental states of a number of a corporation's controlling officers, so that liability would not be contingent upon finding one individual who, by himself or herself, satisfies the entire mens rea requirement.[112] However, a principle of aggregation within the framework of the doctrine of identification would still require a detailed investigation into the conduct and state of mind of particular officers.[113] Moreover, problems arise where different controlling officers knew or believed different things. In practice, it is often possible to state with confidence what the corporation did or omitted to do without investigating the conduct of individual controlling officers and the information that each of them possessed.[114] Because the principle of aggregation requires such examination of each individual controlling officer's conduct and state of mind, it would not enable the fact that one can state with confidence what the corporation has done or omitted to do to be reflected automatically in a finding that the corporation was therefore liable. The principle of aggregation would not enable this fact to be reflected automatically in a finding that the corporation was therefore liable.[115]
Another, more radical, proposal for reforming corporate liability is Fisse and Braithwaite's notion of 'reactive fault.'[116] This would judge a corporation's liability post hoc, according to the steps which it had taken after the accident to prevent any recurrence, such as correcting its practices, ensuring compensation, and generally acting as a responsible company should.
However, while this method can be applauded for focussing on a corporation's internal decision structures and policies rather than the acts and omissions of individuals, in addition to in-principle objections to abandoning the concurrence principle, there is the practical difficulty in determining the degree of reactive fault required for manslaughter.[117] Furthermore, the prosecutorial and forensic burden would be enormous and prohibitive because reactive fault would require a review of corporate safety and other procedures within an open-ended time-frame.[118] Rather than adopt such a radical approach in New Zealand it is submitted in this article that it is best to adopt a reform that is based as closely as possible upon ordinary principles of criminal law.[119]
In response to concerns about the efficacy of the current law, the trend in overseas jurisdictions is for the legislature to modify general criminal provisions to have the effect of making corporate killing by gross negligence an offence,[120] or to enact a special separate offence of corporate killing.[121]
Such provisions do away with the identification doctrine. This is achieved by holding a corporation liable for failing to meet a particular standard of conduct, rather than attempting to say that a corporation has done a particular act or entertained a particular state of mind which requires a consideration of the mind of a representative of the company.[122] After all, gross negligence is a crime of (serious) neglect or omission. Therefore, the question should be whether the corporation fell within the criteria for liability applicable to the offence of gross negligence manslaughter.
Thus, an offence based on this premise, and tailored to the peculiar characteristics of corporations, would provide a more effective means of attributing liability in New Zealand than the identification doctrine. This option for reform is favoured by this article.[123] The next Part considers how to best give effect to this principle.
In developing a discrete corporate manslaughter offence, an initial concern is that companies should not be unjustly convicted merely because they are in charge of an operation at which a disaster has occurred. Furthermore, the proposed offence should not increase regulatory burdens, stifle entrepreneurial activity or create a risk averse culture: corporations who already take their obligations under health and safety law seriously should have nothing to fear. The right balance must be struck between an effective offence and legislation that would unnecessarily impose a burden on business. This can be achieved by focussing on what is currently wrong with the law: the need to find a controlling officer personally guilty of gross negligence manslaughter before the company itself can be convicted.[124] Rather than attempt to draft an offence with precise accuracy, the elements of the proposed corporate manslaughter offence for New Zealand are listed as follows:
• The offence applies to an organisation which owes a duty of care:
(a) to its employees as such;
• Whether an organisation owes a duty of care to a particular individual
(b) in its capacity as occupier of land; or
(c) in connection with -
(i) the supply by the organisation of goods or services (whether for consideration or not); or
(ii)the carrying on by the organisation of any other activity on a commercial basis.
is a question of law. The judge must make any findings of fact necessary
to decide this question.
• An organisation is guilty of the offence of corporate manslaughter if
the way in which any of the organisation's activities are managed or
organised by its senior managers:
(a) causes a person's death (determined by the usual principles of causation in criminal law); and
(b) amounts to a gross breach of the duty of care owed by the organization to the deceased. Such a breach of a duty of care is 'gross' if the failure in question constitutes conduct falling far below what can reasonably be expected of the organisation in the circumstances.
• A person is a 'senior manager' of an organisation if he or she plays a
significant role in:
(a) the making of decisions about how the whole or a substantial part of its activities are to be managed or organised; or
• An individual cannot be guilty of aiding, abetting, counselling or
(b)the actual managing or organising of the whole or a substantial part of those activities.
procuring the offence of corporate manslaughter.
• The offence of corporate manslaughter does not abolish the existing
statutory offence of manslaughter in its application to corporations.
The proposed offence draws on a critical examination of some aspects of enacted or proposed offences present in the United Kingdom, Australia and Canada. The elements outlined above are discussed fully in the following sections of this article.
It is convenient at this point to outline the situation in Australia. In 1995, the federal government of Australia enacted the Criminal Code Act 1995 (Cth). Part 2.5 of the Act specifically brings corporations within the full gamut of the Australian criminal law by setting down basic principles of corporate responsibility which will apply to any offence, including those punishable by imprisonment such as manslaughter. In Australia, each state has responsibility for enacting and enforcing offences in relation to general and serious crimes including the offence of homicide.[125] Only the Australian Capital Territory ('ACT') has incorporated the provisions of the Criminal Code Act 1995 (Cth), through the Criminal Code 2002 (ACT).[126] The ACT amended its Crimes Act 1900 (ACT) by the Crimes (Industrial Manslaughter) Amendment Act 2003 (ACT), which commenced operation on 1 March 2004. The Crimes Act 1900 (ACT) now contains two new 'industrial manslaughter' offences: an employer offence and a senior officer offence.[127] The offences only relate to the death of an employee, not a member of the public.
Section 49C of the Crimes Act 1900 (ACT) introduces an employer offence of industrial manslaughter. An employer commits an offence if:
(a) A worker of the employer -
(i) dies in the course of the employment by, or providing services to, or in
relation to, the employer; or
(ii)is injured in the course of employment by, or
providing services to, or in relation to, the employer and later dies; and
(b) the employer's conduct causes the death of the worker; and
(c) the employer is -
(i) reckless about causing harm to the worker, or any other worker of the
employer, by the conduct; or
(ii) negligent about causing the death of the
worker, or any other worker of the employer, by the conduct.
If the employer who is being prosecuted is a corporation, then Part 2.5 of the Criminal Code Act 1995 (Cth) applies, which, as already mentioned, provides company-specific provisions.
The offence should apply as widely as possible, not just to incorporated bodies, but also to other forms of business organisation, for example, partnerships and public bodies.[128] This is because although the aim of this article is to extend liability for corporations due to the current restrictions in the law that relate only to corporations, many unincorporated and public bodies in New Zealand are in practice indistinguishable from corporations. The aim of the proposed offence is to target management and organisation failings in behaviour, and such behaviour, unfortunately, is often demonstrated by unincorporated and public bodies and, arguably, their liability for fatal accidents should be the same. The proposed corporate killing offence in the United Kingdom's Corporate Manslaughter Bill does not apply to unincorporated bodies.[129] However, not including such unincorporated bodies could lead to an arbitrary distinction and inconsistency of approach when management failings have caused death.[130] This should override any concerns about the appropriateness of prosecuting an unincorporated body with no separate status and a potentially changing membership for an offence that seeks to identify failings within the organisation that can be considered as failings of the organisation itself. Therefore, this article proposes an offence that applies where an organisation owes a duty of care:
(a) to its employees as such;
(b) in its capacity as occupier of land; or
(c) in connection with -
(i) the supply by the organisation of goods or services (whether for consideration or not); or
(ii)the carrying on by the organisation of any other activity on a commercial basis.[131]
The effect is to include within the offence the type of activities pursued by companies and other bodies corporate, whether performed by commercial organisations, or by the Crown, or by other public bodies.[132] Included would be a range of bodies which have not been traditionally classified as corporations including schools, hospital trusts, partnerships and unincorporated charities.
The new offence would only apply in circumstances where an organisation owed a duty of care to the victim. This would reflect the current position under the offence of gross negligence manslaughter. The duty of care can be a common law or statutory duty of care, and whether an organisation owed a duty of care to a particular individual would be a question of law.
There are two aspects to the conduct requirement. First, the defendant must have acted, or omitted to act, in a particular way; and second, the death must have resulted from that act or omission. The critical inquiry would be: in what circumstances can it properly be said that it is not merely the conduct of a corporation's agents that has caused the death, but it is the conduct of the corporation itself that has caused the death.[133] The focus should be on the kind of conduct that should incur liability, not on the identity of the person or persons responsible for it, which is the focus of the identification principle. The conduct requirements in each of the offences of the United Kingdom, Australia and Canada are now discussed.
The United Kingdom
Clause 1(1) of the draft Corporate Manslaughter Bill states that an 'organisation to which this section applies is guilty of the offence of corporate manslaughter if the way in which any of the organisation's activities are managed or organised by its senior managers causes a person's death.'[134] This involves the notion of 'management failure.' The concept of 'management failure' is derived from the law governing an employer's common law obligation to take care of the safety of employees, and one aspect of that obligation in particular, namely, the employer's duty to provide a safe system of work.[135] The 'management failure' approach focuses on the arrangements, systems and practices for carrying out the corporation's work.
With offences involving negligence, such as the ACT's industrial manslaughter offences, section 12.4 of Part 2.5 of the Criminal Code Act 1995 (Cth) states that the company itself may be taken as negligent if its 'conduct is negligent when viewed as a whole (that is, by aggregating the conduct of any number of its employees, agents or officers)' if no individual employee, agent or officer is negligent.[136] Alleged negligence of a company 'may be evidenced by the fact that the prohibited conduct was substantially attributable to inadequate corporate management, control or supervision of the conduct of one or more of its employees, agents or officers; or failure to provide adequate systems for conveying relevant information to relevant persons in the body corporate'.[137] The Australian Law Reform Commission states that this arrangement is consistent with Fisse's concept of 'organisational blameworthiness' as the determinant of liability for corporations.[138]
The Canadian Criminal Code was amended by Bill C-45, An Act to Amend the Criminal Code (criminal liability of organizations).[139] Like the Australian provisions, with offences requiring negligence such as manslaughter, Bill C-45 uses an aggregation approach. Clause 2 of Bill C-45 amends the Criminal Code by adding section 22.1:
22.1 In respect of an offence that requires the prosecution to prove negligence, an organization is a party to the offence if
(a) acting within the scope of their authority
(i) one of its representatives is a party to the offence, or
(b) the senior officer who is responsible for the aspect of the organization's activities that is relevant to the offence departs - or the senior officers, collectively, depart -markedly from the standard of care that, in the circumstances, could reasonably be expected to prevent a representative of the organization from being a party to the offence.[140]
(ii) two or more of its representatives engage in conduct, whether by act or omission, such that, if it had been the conduct of only one representative, that representative would have been party to the offence; and
Section 22.1 of the Criminal Code requires individual or collective negligence of senior officers. It is clear that this is intended to cover conduct similar to the United Kingdom's notion of management failure:[141]
The heart of [section 22.1] relates to a failure in risk management and within the corporate context, a failure of the organization as a whole to properly implement risk management systems to prevent negligence. The new definition recognizes the organic structure of modern corporations.
The provisions of the United Kingdom, Australia and Canada all concentrate on the way in which an organisation's activities are managed. In New Zealand, as well as overseas, death or personal injury resulting from a major disaster is rarely solely caused by the negligence of a single individual. Rather, they are generally the result of failure in systems for controlling risk of harm.[142] Such systems are the responsibility of management, and therefore the proposed offence should target failings in such management. To achieve this, under the proposed offence for New Zealand, an organisation would be guilty of the offence of corporate manslaughter if the way in which any of its activities were managed caused death.
Thus, organisations would not be liable for any immediate, operational negligence causing death, or indeed for the unpredictable, maverick acts of its employees (or potentially others). Instead, the proposed offence focuses on how, at a wider and senior management level, activities were organised and managed. It is not limited to examination of an organisation's working practices, but also considers organisational culture. Compared to the identification principle, the 'management failure' principle (borrowing from the United Kingdom's terminology) better reflects the complexities of decision taking and management within large organisations, but it is also relevant for smaller bodies.[143]
The key inquiry is whether there has been a management failure that has caused death. For example, if a courier driver causes death by dangerous driving in the course of the courier company's business, this act would not of itself involve a management failure so as to incur corporate liability; nor would the company be vicariously liable for the driver's negligence. The company might, however, be liable if the incident occurred because the driver was pressured by the company to drive quickly in order to meet excessive delivery quotas, or because he or she consistently worked very long hours in the desire to earn overtime, and the company had no adequate system of monitoring to ensure that this did not happen.[144] It is accepted that there will be some cases in which the jury will have to draw a somewhat fine line between an employee's 'casual' negligence and a management failure. However, as the English Law Commission concluded in relation to the United Kingdom proposals, the distinction between 'management failure' and operational negligence is an appropriate way of differentiating, in the context of involuntary homicide, between the conduct of a corporation and the conduct of its employees alone.[145]
A corporate killing offence should focus on the overall way in which an activity was being managed or organised by an organisation. More localised or junior management failings should be excluded as a basis for liability (although these might provide evidence of management failings at more senior levels).[146]
The United Kingdom's draft Bill attributes liability to the organisation only for failures by an organisation's 'senior managers' (and similarly in Canada, for the failures of 'senior officers'). 'Senior manager' is defined in clause 2 of the draft Bill:
A person is a 'senior manager' of an organisation if he plays a significant role in-
(a) the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or
(b)the actual managing or organising of the whole or a substantial part of those activities.[147]
The proposed offence for New Zealand adopts this definition. The definition is useful because whether a part of an organisation's activities is 'substantial' will need to be considered in the context of the individual organisation and will depend on its overall scale of activities, recognising the fact that activities forming a substantial part of a smaller organisation will differ from those representing a substantial part of a larger one. Although the focus is not on localised management failings, the management failings of the 'substantial' business of a large company which operates a number of businesses in different locations or industries (each of which may have different policies and management structures) would be covered. Furthermore, by identifying two strands to management responsibility, it ensures that managers who set and monitor workplace practices (those making decisions) as well as those providing operational management (those actually managing those activities) are covered. In either respect, a person must play a significant role in the management responsibility.[148]
It could be argued that a corporation could delegate all of the health and safety responsibilities to lower management who make management decisions or provide operational management for only an insubstantial part in its activities, thereby avoiding prosecution.[149] However, inappropriate delegation itself could be seen as gross negligence.[150] Although concentration on senior managers seems to contradict the earlier contention that the focus should be on the kind of conduct that should incur liability, not on the identity of the person or persons responsible for it (which is the focus of the identification doctrine), the difference lies in the fact that the kind of conduct that the proposed offence attempts to incriminate is management failure rather than any failure. The determination of management failure depends on the acts and omissions of senior managers. In contrast, under the identification doctrine, the focus on the controlling individuals is used to determine whose acts and omissions are the acts and omissions of the 'embodiment' of the company, rather than to determine the kind of conduct that should incur liability. On the contrary, in relation to the ACT offence, section 12.4 of the Criminal Code Act 1995 (Cth) does not mention who the conduct may be done by, other than to say that the 'body corporate's conduct is negligent when viewed as a whole.' But the negligence can only be viewed as a whole if no individual employee, agent or officer can be shown to be criminally negligent. Woolf points out that this seems to imply that it may be possible to establish corporate negligence by proof of individual negligence without resort to the collective negligence provision. Thus, an individual may be relatively junior or localised but his or her failure (i.e. inadequate corporate management or failure to provide communications) may cause a corporation to be liable.[151] This should not be the effect of New Zealand's offence.
The physical element for manslaughter is killing of a human being. Section 12.2 of Part 2.5 of the Australian Criminal Code Act 1995 (Cth) attributes the 'physical element' of an offence to a corporation if it was committed 'by an employee, agent or officer of a body corporate acting within the actual or apparent scope of his or her employment, or within his or her actual or apparent authority.'
Similarly, s 22.1 of the Canadian Code provides that an organisation's 'representatives' who are 'acting within the scope of their authority' are a party to the offence.[152] A 'representative' is a director, partner, employee, member, agent or contractor of the organisation.[153]
For the purposes of the proposed New Zealand offence, no mention is made of the physical element of killing.[154] This is because an organisation should be liable where its management failure led to the commission of the killing, even though it is impossible to identify which particular employee, agent or officer had committed the killing.[155] Furthermore, unlike the Australian and Canadian Codes, an organisation's liability should not depend on whether the killing occurred within the scope of employment or authority.[156] For example, a (renegade) pilot wishes to take his friends on a sightseeing flight. After work hours and without any authority to do so, he steals a plane which belongs to his employer, an air transport company. During the flight he negligently crashes the plane killing all the passengers on board. This act could not be said of itself to involve a management failure and therefore the company will not be liable. Even if it was found that the plane crashed due to some technical failure which was itself caused by a management failure, rather than the pilot's negligence, it could be said that the management failure no longer caused the victims' deaths because the pilot's intervening act broke the chain of causation.[157] But if the pilot believed on reasonable grounds, or entertained a reasonable expectation, that a senior manager had or would have authorised or permitted his actions, this belief or expectation could be proof of a corporate culture that could be considered to be a management failure in itself. Alternatively, if it was clear that the pilot had an irresponsible type of character (which may be evidenced by past convictions), and the company failed to take adequate precautions in hiring the pilot, this may be a management failure in itself. In these last two scenarios, the pilot was not acting within the scope of his employment or authority.
An important element of the proposed offence for New Zealand is that the management failure must have caused the victim's death. It is submitted that the ordinary rules of causation in the criminal law should apply to determine this question. Thus, if the jury is satisfied beyond reasonable doubt that the death would not have occurred had it not been for the management failure, the causation element would be proved. However, the offence would not be proved if an intervening act broke the 'chain of causation', and, therefore, the management failure was not itself a cause of death but merely part of events leading up to it. In many, possibly most, cases it will be the operational negligence (rather than a deliberate act) of one or more of the organisation's employees that is most closely connected in point of time with the death. However, for there to be a novus actus interveniens the employee's conduct must be 'free, deliberate and informed',[158] and this does not include innocent, accidental or negligent acts.[159] If the employee's input was not free, deliberate, and informed, an intervention that is reasonably foreseeable (ie. predictable) does not break the chain of causation; but if the intervention was unforeseeable and extraordinary, it is a novus actus interveniens.[160]
The proposed offence for New Zealand should be targeted at the most serious management failings that warrant a conviction for manslaughter. A corporation should not be liable for every breach of an organisation's common law and statutory duties to ensure the health and safety of its employees. Additionally, the new offence should not catch organisations that are making proper efforts to operate safely or responsibly or whose efforts do not quite meet appropriate standards.[161] Furthermore, the offence should be one of last resort, available only when all other existing sanctions seem inappropriate or inadequate, because the negligence involved was very serious.[162] Therefore, for the proposed offence, there is no reason to depart from the high threshold of gross negligence that the law of gross negligence manslaughter in New Zealand currently requires,[163] which is that a breach of a reasonable standard of care that was so bad that it should be judged to be criminal and deserving of punishment.[164] The proposed offence requires a gross breach of the defined duty of care, which constitutes a management failure falling far below what can be reasonably expected of the organisation in the circumstances.[165]
It follows that the offence of corporate killing should be triable only on indictment, to mark the seriousness of an offence which causes death from conduct which falls far below an acceptable standard.[166] Furthermore, to clarify the meaning of the term 'falling far below' in relation to the United Kingdom's proposed offence, clause 3 of the United Kingdom's draft Bill provides:
(2) In deciding that question [of whether the defendant's conduct falls far below what can reasonably be expected of it in the circumstances] the jury must consider whether the evidence shows that the organisation failed to comply with any relevant health and safety legislation or guidance, and if so-
(a) how serious was the failure to comply;
(b) whether or not senior managers of the organisation-
(i) knew or ought to have known, that the organisation was failing to comply with that legislation or guidance; (ii) were aware, or ought to have been aware, of the risk of death or serious harm posed by the failure to comply; (iii) sought to cause the organisation to profit from that failure.
(4) Subsection (2) does not prevent the jury from having regard to any other matters they consider relevant to the question.
Neither the Australian or Canadian provisions provide any such statutory guidance, and this article rejects the need for it on the basis that it would be neither practicable nor desirable. In every case it would be for the jury to decide when the defendant's conduct could be said to fall far below that which could be reasonably expected of it 'in the circumstances.'[167] In particular, the requirement under the United Kingdom's draft Bill that the jury must consider whether the organisation sought to profit from its breach in order to find the organisation liable is ambiguous. The clause can be read to mean that a gross breach cannot be found unless the defendant sought to profit from its failure, or it could be read to mean that a gross breach can be found even if the defendant did not seek to profit from its failure. It is submitted that the former interpretation should not be adopted because there may arise a situation where an organisation, which causes death as a result of gross (management) failure but which is not done with a view to profit, is culpable enough to be made liable of involuntary manslaughter. Indeed, the offence of gross negligence manslaughter by human beings does not require the defendant to have a view to benefit from his or her breach.
The existing offence of gross negligence manslaughter in New Zealand provides no particular guidance for the jury to determine whether the defendant's conduct amounts to gross negligence, and likewise statutory guidance for a corporate killing offence is unnecessary. It is, and should be, a matter for the jury, with guidance from the judge, to decide upon the considerations that are relevant, and the weight attached to them.[168]
Clause 13 of the United Kingdom's draft Bill abolishes the application of the existing individual offence of manslaughter by gross negligence to corporations. However, the English Law Commission were of a different view: 'just because it would not normally be necessary to charge the corporation with an individual offence, it does not follow that it would never be appropriate; still less does it follow that it should not be possible.'[169] The Law Commission pointed out that there may be the occasional case where, although under the identification principle the conduct of the individual responsible is the conduct of the company, it is arguable that the conduct does not amount to a management failure. Even where a management failure is found, where a case involves a one-person company, there is no reason why it should not continue to be possible for the company to be convicted of the same offence as the individual responsible.
This article, while noting the concerns of Woolf,[170] supports the Law Commission's view. Under the proposed offence for New Zealand, the prosecution would be able to choose whether to charge a company for the individual offence of gross negligence manslaughter.[171]
As a general rule, a director or controlling member of a corporation is not criminally liable for the acts of the company simply because of his or her position in the company. It does not follow that because a company may be criminally liable for the acts of its officers acting within the scope of their employment, an individual officer must also be criminally liable.[172] Generally, an individual officer is criminally liable only if he or she himself or herself committed a crime. The argument for punitive sanctions on company officers of a company found guilty of a corporate killing offence arises from the need to provide sufficient deterrent force to a corporate killing offence; and the need to prevent culpable individuals from setting up new businesses or managing other companies or businesses, thereby leaving the public at risk again. These concerns prompted the English Government in its consultation paper in 2000 to ask for views on whether individual officers 'contributing' to a management failure should face disqualification from acting [as officers or directors of a company].[173] The English Government also noted that the public interest in encouraging officers to take health and safety issues seriously is so strong that officers should face criminal sanctions in circumstances where, although the company has committed the corporate offence, it is not (for whatever reason) possible to secure a conviction against them for the individual gross negligence manslaughter offence. However, it would not be possible for an individual officer to be made criminally liable on the sole basis of the conviction of an organisation for the corporate offence. The English Government therefore concluded that it would be necessary to create an additional criminal offence in respect of substantially contributing to an offence committed by a corporation which lead to the death of a person.[174] In the end, the English Government declined to enact punitive sanctions against individuals or enact a separate offence. Clause 1(5) of the United Kingdom's draft Bill states that 'an individual cannot be guilty of aiding, abetting, counselling or procuring an offence of corporate manslaughter.'[175]
In contrast, in addition to the 'employer' offence, the Crimes Act 1900 (ACT) provides a 'senior officer' offence of 'industrial manslaughter.' Section 49D provides that a senior officer of an employer commits an offence if:
(d) A worker of the employer -
(i) dies in the course of employment by, or providing services to, or in relation to, the employer; or
(e) the senior officer's conduct causes the death of the worker; and
(ii) is injured in the course of employment by, or providing services to, or in relation to, the employer and later dies; and
(f) the senior officer is -
(i) reckless about causing serious harm to the worker, or any other worker of the employer, by the conduct; or
(ii) negligent about causing the death of the worker, or any other worker of the employer, by the conduct.
Senior officers are liable to a maximum fine of $200,000, or to a maximum prison sentence of 20 years, or both.[176] The ACT's Minister for Industrial Relations stressed that the senior officer offence was not based on vicarious liability. The senior officer offence 'will only apply if the officer's own conduct caused the death of a worker,'[177] so that the officer will not be held responsible for the negligent or reckless actions of others, nor for the failure of the employer's systems to prevent the death of a worker.[178] Additionally, in Canada, a duty of reasonable care for the safety of workers or others has been codified by Bill C-45. Section 217.1 of the Criminal Code now provides:
217.1 Every one who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task.
A breach of this duty is not in itself a criminal offence but may become an offence if the breach of duty is done with criminal negligence defined in s 219 of the Code as 'wanton or reckless disregard for the lives or safety of other persons.' The relevant charge would then be criminal negligence causing death under s 220; criminal negligence causing bodily harm under s 221; or manslaughter under s 222(5)(a) (killing by an unlawful act), all of which are punishable by imprisonment.
It is submitted that neither a separate offence like those in the ACT and in Canada, nor punitive sanctions for individuals should be enacted in New Zealand, for several reasons. First, the individual manslaughter offence in New Zealand is punishable by imprisonment for life only.[179] It can be argued that the availability of a fine or other penalties, such as disqualification, against individuals, devalues a workplace death over a death outside work, and counteracts any symbolic value that accrues from having an offence directed at workspace fatalities.[180] Second, the ACT senior officer offence can be criticised. Wheelwright writes that
[t]he senior officer offence in the ACT legislation is very narrow and adds nothing to the manslaughter laws already applying to individuals in the ACT, except that the senior officer offence applies specifically in the workplace. The officer's conduct must have caused the death directly in circumstances meeting the tests of recklessness or criminal negligence. It is highly unlikely these requirements will be satisfied in the workplace context.[181]
Similarly, section 217.1 of the Canadian Criminal Code can be criticised because liability arises only for an individual's own breach of duty - it is not related to an organisation's breach of duty - and such breaches of duty are already covered by gross negligence manslaughter. The ACT and Canadian provisions contrast with the English Government's proposals in 2000 to enact an offence for individuals who substantially contribute to an organisation's liability for the corporate offence. A provision imposing liability on the officers of a company is commonly included in legislation creating an offence which is likely to be committed by a corporation.[182] However, the question of whether individuals should be criminally liable for the gross negligence of the organisation is 'a very difficult one, even in regulatory statutes',[183] but especially for manslaughter. Therefore, for New Zealand's purposes, any such proposed offence should be avoided.
Moreover, the requirements of a separate offence, or to have punitive sanctions against individuals for the corporate offence, would be difficult: proving, for example, that an officer 'contributed' to a management failure (as the English Government proposed) is potentially complicated and the concept of contribution to a management failure is vague. Finally, in relation to adopting punitive sanctions against individuals (without considering a separate offence), this article supports the view that it would be inappropriate for an offence that deliberately focuses on the liability of the corporation itself, to include punitive sanctions for individuals. However, under the proposed offence for New Zealand, individuals within the company could still be concurrently liable with the company for the individual offence of gross negligence manslaughter and Health and Safety in Employment Act 1992 offences; and regardless of whether they are individually liable, their conduct might still be relevant to any case against the company for the corporate offence.
Where an organisation is indicted for the offence proposed in this article, the provisions of the Health and Safety in Employment Act 1992 would still apply to those that are currently affected by the Act.[184] In contrast with the employer's liability under s 6 of the Act, under the proposed offence the organisation would not be automatically liable for the negligence (however gross) of an employee. A management failure must be proved.[185]
To demonstrate how the proposed offence will operate in practice, reference is made to the 1987 Zeebrugge ferry disaster which prompted the corporate manslaughter debate in the United Kingdom.[186] A ferry, Herald of Free Enterprise, capsized with the loss of 150 passengers and 38 crew members. The immediate cause of the capsize was that the ferry had set sail with her inner and outer bow doors open. The assistant bosun had fallen asleep in his cabin and missed the 'Harbour Stations' call to shut the doors. The Chief Officer, as loading officer of the G deck, was under a duty to ensure that the bow doors were closed, but he interpreted this as a duty to ensure that the assistant bosun was at the controls. The report of the inquiry into the disaster ('the Sheen Report') said that the Chief Officer's failure to ensure that the doors were closed was the most immediate fault that lead directly or indirectly to the disaster.[187]
The Master of the ferry was responsible for the safety of the ship and those on board, and thus the inquiry found that he was responsible for losing the ship. However, he had followed the system approved by the Senior Master, and no mention was made in the company's 'Ship's Standing Orders' to the closing of the doors. The Senior Master failed to enforce issued orders, and also failed to issue orders relating to the closing of the bow doors on G deck. The Sheen Report found that he 'should have introduced a fail-safe system.' Furthermore, this was not the first occasion that one of the company's ships had gone out to sea with its doors open, and management had not acted upon earlier incident reports. The Sheen Report's criticism went further than just to those on board the ferry:[188]
The Board of Directors did not appreciate their responsibility for the safe management of their ships ... There appears to have been a lack of thought about the way in which the Herald ought to have been organised for the Dover/Zeebrugge run. All concerned in management, from the members of the Board of Directors down to the junior superintendents, were guilty of fault in that they all must be regarded as sharing responsibility for the failure of management. From top to bottom the body corporate was infected with the disease of sloppiness ... The failure on the part of the shore management to give proper and clear directions was a contributory cause of the disaster.
As explained above,[189] the prosecution against P & O European Ferries (Dover) Ltd failed. In order to convict the company of manslaughter, one of the individual defendants who could be 'identified' with the company had to himself or herself be guilty of manslaughter.[190] Because there was insufficient evidence on which to convict any of those individual defendants, the case against the company had to fail.[191] If the same facts came before a court again, it is submitted that it would probably be open to a jury to conclude beyond reasonable doubt:
• that the company owed a duty of care to its crew and passengers;
• that the company was in breach of that duty of care because of the way its senior managers, the shore management, managed or organised a particular aspect of its activities, that is, they failed to devise a safe system for the operation of the company's ferries;
• that this management failure caused the resulting deaths, even if the immediate cause of the deaths was the conduct of the assistant bosun, the Chief Officer or both; and
• that the breach of duty fell far below what could reasonably have been expected of the company in the circumstances.
If these same circumstances occurred in New Zealand, the company could be convicted of the offence proposed in this article.
This section will only briefly consider the complex issue of sentencing organisational offenders.[192] There are four main sentencing options:[193] fine,[194] adverse publicity,[195] corporate probation,[196] and incapacitation and restraint.[197]
The United Kingdom's Corporate Manslaughter Bill and the Canadian Criminal Code impose unlimited fines for conviction of corporate manslaughter.[198] Unlimited fines seem appropriate because a person has been killed, and the deterrent effect of a fine will vary greatly with the size and nature of the organisation.[199] There is a danger that for some large organisations a fine will simply be seen to be a cost of doing business: 'a public morality tax.'[200] However, there is the problem of a 'deterrence trap': once a certain monetary level is reached the company will become insolvent and the fine will likely go unpaid. An 'equity fine' can avoid this problem.[201] Furthermore, even where a company is able to absorb a large fine, there is the problem of 'overspill': that is, the phenomenon that the higher the fine the more likely the cost and burden of the fine will fall onto shareholders, creditors, employees (if the fine is severe enough to result in cutting staff) and consumers (through increased prices).
Therefore, new creative types of penalties for organisations are being developed around the world which may better meet the deterrent and retributive functions of the criminal law where the offender is an organisation.[202] In relation to the ACT offence, s 49E of the Crimes Act 1900 (ACT) states:
(2) In addition to or instead of any other penalty the court may impose on the corporation, the court may order the corporation to do 1 or more of the following:
(a) take any action stated by the court to publicise—
(b) take any action stated by the court to notify 1 or more stated people of the matters mentioned in paragraph (a);
(i) the offence; and
(ii) the deaths or serious injuries or other consequences resulting from or related to the conduct from which the offence arose; and (iii) any penalties imposed, or other orders made, because of the offence;
(c) do stated things or establish or carry out a stated project for the public benefit even if the project is unrelated to the offence.Example for par (a)
advertise on television or in a daily newspaperExample for par (b)
publish a notice in an annual report or distribute a notice to shareholders of the corporation Example for par (c) develop and operate a community service[203]
Such adverse publicity orders are welcome, bringing home to convicted organisations the stigma of a manslaughter conviction and thus provide a significant deterrent effect, both specific and general, which may encourage rehabilitation.[204]
Moreover, the sanctions discussed so far, if they have any rehabilitative effect at all, leave it to the corporation to decide how it will respond to the sanction. In cases involving death, it is desirable to enforce change by subjecting the organisation to a period of probation. The United Kingdom's Corporate Manslaughter Bill allows the courts to impose remedial orders on offending organisations, requiring that specific remedial action be taken to address, within a specified time, the failures that led to death. Canada's Bill C-45 introduces into the Canadian Criminal Code a new s 732.1(3.1), which contains a list of conditions that a probation order for an 'organisation' may prescribe. A court may order an organisation to:[205]
• make restitution to victims of the offence;[206]
• carry out adverse publicity;
• implement policies and procedures to reduce the likelihood of further criminal activity;
• communicate those policies and procedures to employees;
• name a senior officer to oversee the implementation of those policies and procedures; and
• report to the court on the implementation of those policies and procedures.
Although not without its problems and criticisms,[207] the notion of corporate probation is appealing in order to enforce remedial and rehabilitative change in an offending organisation.
The fourth sentencing option, incapacitation and restraint, aims to replicate imprisonment (which is the punishment for individuals who are convicted of homicide) for organisations. The essence of imprisonment is restraint and there are a number of ways in which the business of an organisation may be restrained. For example:[208]
• ceasing certain commercial activities for a particular period or in a particular geographic region;
• revocation or suspension of licences;
• disqualification from certain contracts, especially government contracts; or
• freezing the organisation's profits.
Furthermore, the gravity of the offence of corporate manslaughter arguably justifies that a corporation be subject to the corporate equivalent of capital punishment, that is, deregistration. However, with both incapacitation and restraint, the problem of overspill is likely to be considerable and, in the case of medium to large corporations, would often be too great to justify such sanctions.[209] Therefore, the offence proposed by this article would not include these sanctions. In general, this article supports the use of unlimited fines, adverse publicity and corporate probation as punishment for its proposed offence in New Zealand.
Public and workplace disasters 'graphically demonstrate the shattering impact of corporate misconduct upon human life.'[210] However, the current law in New Zealand fails to hold accountable at fault organisations in an effective way. It is obviously not ideal to await the occurrence of such disasters before pressing the case for law reform. This article has concluded that the best option for reform is to enact a special corporate manslaughter offence in New Zealand. Due to the inadequacy of the Health and Safety in Employment Act 1992, and the existence of large, complex organisations in this country, the basis of liability for the proposed offence is a failure by senior management of a corporation to organise and develop its systems, arrangements and culture to avoid serious harm to others. The concept of management failure recognises the fact that death is rarely solely caused by individual operational negligence, and ideally reflects the complex decision making structures of organisations that the identification principle fails to address. The proposed offence is designed to be a new and effective way to target the worst cases of management failure which cause death to workers or members of public.
This article has drawn on the proposals made overseas in an attempt to develop an offence which is suitable for New Zealand. However, these overseas proposals have yet to be tested and their effect is presently unknown. The same can be said of this article's proposed offence. Furthermore, many issues relating to the proposed offence have not been discussed, such as territorial application and jurisdiction; who, in fact, should investigate and prosecute the offence; enforcement of the offence; and the effect of insolvency and dissolution of companies during criminal proceedings. Moreover, the regulatory impact of the offence in New Zealand needs to be examined.[211]
Nevertheless, this article has highlighted some of the important issues surrounding corporate manslaughter. In particular, in relation to the sentencing of organisations, New Zealand has the opportunity to be proactive and novel in adopting punishments that will best promote remedial and rehabilitative change in our offending organisations.
There is a current lack of academic debate in New Zealand on corporate manslaughter. It is hoped that this article will stimulate discussion, and ultimately place corporate manslaughter on the legislative agenda. The time has come for organisations that have paid little regard to the safety of their workers and members of the public to be held accountable in New Zealand in an effective and meaningful way. An offence of corporate manslaughter would have this effect.
[*] BCom/LLB (Hons). The author is currently employed in investment banking. Thanks is given to Richard Scragg for his guidance and supervision in the writing of this paper.
[1] Seventy-three claims for work-related fatalities were reported to ACC last year. In 2003 there were 83 claims. (From Statistics New Zealand <http://www.stats.govt.nz.html> .)
[2] For the purposes of this article, the terms 'company' and 'corporation' are used interchangeably and have the same meaning.
[3] An Air New Zealand plane crashed into Mount Erebus in Antarctica, killing all 237 passengers and 20 crew, in what is New Zealand's biggest single tragedy, with one more death than in the 1931 Napier earthquake.
[4] A 'roll-on roll-off’ passenger and freight ferry, Herald of Free Enterprise, capsized with the loss of 150 passengers and 38 crew members. See below Part VI - 'An Illustration of the Proposed Corporate Manslaughter Offence'.
[5] In this tragedy, 26 miners died. Manslaughter charges were laid against two Westray managers, but were dropped after particularly protracted legal proceedings.
[6] This explosion in Victoria resulted in the deaths of two workers.
[7] For example, the Mount Erebus disaster was followed by a Royal Commission of Inquiry, chaired by Justice Peter Mahon. The 'Mahon Report', released on April 27 1981, cleared the crew of blame for the disaster. Justice Mahon said the single, dominant and effective cause was the changing of the aircraft's navigation computer co-ordinates to route the aircraft directly towards Mount Erebus, without the crew being advised. The new flight plan took the aircraft directly at the mountain, rather than along its flank. Thus, the Mahon Report placed blame squarely on airline systems. In addition, Justice Mahon controversially claimed airline executives engaged in a conspiracy to whitewash the enquiry, covering up evidence and lying to investigators, famously accusing them of 'an orchestrated litany of lies': Royal Commission of Inquiry, Report of the Royal Commission to inquire into the Crash of Mount Erebus, Antarctica of a DC 10 Aircraft FT Aircraft operated by Air New Zealand Ltd (1981) (Mahon Report).
[8] Corporate Manslaughter: The Government's Draft Bill for Reform (March 2005) (Cm 6497), 8.
[9] See for example, B Fisse, 'Consumer Protection and Corporate Criminal Responsibility: a Critique of Tesco Supermarkets Ltd v Nattrass' [1971] AdelLawRw 5; (1971-72) 4 Adelaide Law Review 113; Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Australian Government Attorney General's Department, Model Criminal Code: Final Report (Dec 1992), Chapter 2; P French, Collective and Corporate Accountability (1993); C M V Clarkson, 'Kicking corporate bodies and damning their souls (1996) 59 Modern Law Review 557; J Gobert, 'The Politics of Corporate Manslaughter - The British Experience' [2005] FlinJlLawRfm 1; (2005) 8 Flinders Journal of Law Reform 1; H Glasbeek, 'More Criminalisation in Canada: More of the Same?' [2005] FlinJlLawRfm 2; (2005) 8 Flinders Journal of Law Reform 39; and R Sarre and J Richards, 'Responding to Culpable Corporate Behaviour - Current Developments in the Industrial Manslaughter Debate [2005] FlinJlLawRfm 4; (2005) 8 Flinders Journal of Law Reform 93.
[10] At the end of March 2005, the long awaited draft Corporate Manslaughter Bill was published, accompanied by a consultation document on the proposed new law. Submissions on the Bill closed on 17 June 2005: Home Office (UK), Corporate Manslaughter: The Government's Draft Bill for Reform (March 2005) (Cm 6497)). This is the culmination of a series of works by the English Law Commission and the English Government: Law Commission (UK) Involuntary Manslaughter: a Consultation Paper, Law Com no 135, 1994; Legislating the Criminal Code: Involuntary Manslaughter, Law Com no 237, (1996); Home Office (UK), Reforming the Law on Involuntary Manslaughter: The Government's Proposals (May 2000).
[11] This article focuses on how corporate manslaughter is currently being dealt with in common law jurisdictions, particularly in Australia, Canada and the United Kingdom. For discussion on how corporate manslaughter is approached in other civil law jurisdictions (for example, corporate criminal liability which has been introduced in the Netherlands, France and Spain) see C Wells, Corporations and Criminal Responsibility (1993) 116-122; C Wells, 'The Millennium Bug and Corporate Criminal Liability' (1999) The Journal of Information, Law and Technology 2.
[12] That is, killing where the defendant is guilty of culpable homicide, but not of murder; manslaughter under provocation; killing in furtherance of a suicide pact; or of infanticide. See below Part II - 'Applying the Substantive Law of Manslaughter to Corporations'.
[13] Manslaughter due to neglect or omission could fall within s 160(2)(b) Crimes Act 1961 (killing by an omission without lawful excuse to perform or observe any legal duty).
[14] See below Part II - 'The Doctrine of Identification (Rules of Attribution)'.
[15] See Involuntary Manslaughter: a Consultation Paper, above n 10.
[16] A P Simester and W J Brookbanks, Principles of Criminal Law (2nd ed, 2002) 213.
[17] As a general principle, where legislation expressly mandates a particular penalty which is apposite only to natural persons, a company may still be prosecuted, provided at least one other penalty (applicable to companies) is available. This requirement is usually met by the possibility of imposing a fine, which is available for most offences as an alternative to imprisonment. Section 26 of the Criminal Justice Act 1985 allows a court to sentence an offender to pay a fine in lieu of imprisonment.
[18] Police v Purser Asphalts & Contractors Ltd [1990] 1 NZLR 693, 695, per Eichelbaum J.
[19] Perjury cannot be committed vicariously.
[20] This is because bigamy can only be committed by a natural person: R v ICR Haulage Ltd [1944] 1 KB 551, 554; [1944] 1 All ER 691, 693 (CA).
[21] See below Part II - 'Corporate Liability for Manslaughter' and 'Applying the Substantive Law of Manslaughter to Corporations'.
[22] Salomon v Salomon [1897] AC 22.
[23] Meridian Global Funds Management Asia Ltd v The Securities Commission [1995] UKPC 5; [1995] 2 AC 500, 506H-507A, per Lord Hoffmann.
[24] Launchbury v Morgans [1971] 2 QB 253; [1971] 1 All ER 642.
[25] 'It is a point not to be disputed but that in criminal cases the principal is not answerable for the act of his deputy, as he is in civil cases; they must each answer for their own acts, and stand or fall by their own behaviour': R v Huggins [1790] EngR 401; (1730) 2 Ld Raym 1574; 92 ER 518 per Raymond CJ.
[26] Simester and Brookbanks, above n 16, 216.
[27] Allen, Textbook on Criminal Law (3rd ed, 1995) 200. See also Simester and Brookbanks, above n 16, 216. Such an interpretation depends upon 'the object of the statute, the words used, the nature of the duty laid down, the person upon whom it is imposed, the person by whom it would in ordinary circumstances be performed, and the person upon whom the penalty is imposed'.
[28] For example, see Coppen v Moore (no 2) [1898] UKLawRpKQB 103; [1898] 2 QB 306, where vicarious liability was held to exist in relation to the offence of selling goods to which a forged trademark or false trade description is applied.
[29] Simester and Brookbanks, above n 16, 217.
[30] [1971] UKHL 1; [1972] AC 153, 170E-F. (Emphasis added).
[31] Leonards Carrying Co v Asiatic Petroeum [1915] AC705 (HL); Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1; [1972] AC 153. See also Simester and Brookbanks, above n 16, para 7.2.4.
[32] [1971] UKHL 1; [1972] AC 153, 170F-G.
[33] [1995] UKPC 5; [1995] 3 NZLR 7; [1995] 2 AC 500.
[34] Simester and Brookbanks, above n 16, 218. See Morris v Wellington City Corp [1969] NZLR 1038; and Nordik Industries Ltd v Regional Controller of Inland Revenue [1976] 1 NZLR 194.
[35] Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 3 NZLR 7, 16- 17; [1995] UKPC 5; [1995] 2 AC 500, 512 (PC) (Lord Hoffmann). See Simester and Brookbanks, above n 16, 218-220.
[36] Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 3 NZLR 7, 12- 13; [1995] UKPC 5; [1995] 2 AC 500, 507 (PC), per Lord Hoffmann:
In such a case, the court must fashion a special rule of attribution for the particular substantive rule. This is always a matter of interpretation: given that it was intended to apply to a company, how was it intended to apply? Whose act (or knowledge, or state of mind) was for this purpose intended to count as the act etc of the company? One finds the answer to this question by applying the usual canons of interpretation, taking into account the language of the rule (if it is a statute) and its content and policy.
[37] See R B Grantham and C E F Rickett, Company and Securities Law: Commentary and Materials (2002), 291-292.
[39] Thus, in this case the defendant company, which conducted a chemist business, could not be liable as a principal offender on a charge of negligent manslaughter where the incorrect preparation of a prescribed medicine was the cause of death. The inclusion of the word 'human being' in s 158 Crimes Act 1961 is interesting considering that s 2 defines a 'person' to include 'any board, society, or company, and any other body of persons, whether incorporated or not'.
[40] See, for example, R v Robert Millar (Contractors) Ltd [1970] 2 QB 54; [1970] 1 All ER 577 (CA).
[42] ICR Haulage Ltd [1944] KB 551, 556. In the unreported 1965 case of Northern Strip Mining Construction Co Ltd (The Times 2, 4 and 5 February 1965), although the defendant company was acquitted for manslaughter on the facts of the case (a welder-burner was drowned when a railway bridge which the company was demolishing collapsed), neither counsel nor the presiding judge appeared to have any doubt about the validity of the indictment; and the defence counsel seemed to have conceded its propriety. See Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 6.41.
[43] (1991) 93 Cr App R 72 (Central Criminal Court).
[44] R v Murray Wright (1991) [1970] NZLR 476. In Murray Wright, Turner J (of the New Zealand Court of Appeal, reasoned: (at 484)
Manslaughter is culpable homicide. Homicide is the killing of one human being by another. No act or omission of a company which causes death can itself amount to manslaughter, because the act or omission which kills must ex hypothesi be the act or omission of a human being. On the other hand, if the act or omission of the company is relied on, not as directly causing death, but as causing some human being to cause death, the chain of causation is broken in law: what has in law caused death in such a case is not the act or omission of the company, but the act or omission of the human being concerned, for which the company cannot be held vicariously criminally responsible, except under the provisions of s 66.
[45] (1991) 93 Cr App R 72. The report includes citations from certain State Courts in the United States which demonstrate a diversity in approach. In the New Zealand case of R v Murray Wright Ltd [1970] NZLR 476, McCarthy J at 485, found the reasoning of the Court of Appeals of New York 'most persuasive' in People v Rochester Railway and Light Co 195 NY 102; (1909) 88 NE Reporter 22.
[46] (1991) 93 Cr App R 72, 73.
[47] (1991) 93 Cr App R 72, 83-84.
[48] [1995] 3 NZLR 7, 16-17; [1995] UKPC 5; [1995] 2 AC 500, 512 (PC), per Lord Hoffmann.
[49] Simester and Brookbanks, above n 16, 214.
[50] Trotter, 'Corporate manslaughter' (2000) 150 New Law Journal 454; Maakestad, 'Corporate homicide' (1990) 140 New Law Journal 356 (Footnote in original).
[51] The entire text of s 160(2) is as follows:
(2) Homicide is culpable when it consists in the killing of any person-
(a) By an unlawful act; or
(b) By an omission without lawful excuse to perform or observe any legal duty; or
(c) By both combined; or
(d) By causing that person by threats or fear of violence, or by deception, to do an act which causes his death; or
(e) By wilfully frightening a child under the age of 16 years or a sick person.
[52] See Simester and Brookbanks, above n 16, section 16.5.2.
[53] R vMwai [1995] NZCA 306; [1995] 3 NZLR 149, 156-157; (1995) CRNZ 273, 281 (CA). Whether a person owes a duty on admitted or established facts is a question of law: R v Singh [1999] Crim LR 582.
[54] Section 150A was inserted into the Crimes Act 1961 by the Crimes Amendment Act 1997. The report and explanatory note accompanying the Crimes Amendment Bill stated that for each of ss 151-153 and 155-157 the requirement of gross negligence is needed for criminal responsibility.
[55] Simester and Brookbanks suggest that this is implicit in the case of R v Burney [1958] NZPoliceLawRp 4; [1958] NZLR 745 (CA): Simester and Brookbanks, above n 16, 566.
[56] [2000] EWCA Crim 91; [2000] 3 WLR 195, 214.
[57] R v Stanley and others [1990] Central Criminal Court No. 900160 (Unreported, Turner J, 19 October 1990). This case involved the prosecution against P & O European Ferries (Dover) Ltd. RvP&O European Ferris (Dover) Ltd (1991) 93 Cr App R 72 (Central Criminal Court) mentioned above in Part II - 'Corporate Liability for Manslaughter' was the case that dealt with the issue of whether an indictment for manslaughter could lie against a company.
[58] See below Part VI - 'An Illustration of the Proposed Corporate Manslaughter Offence'.
[59] R v Stanley and others [1990] Central Criminal Court No. 900160 (Unreported, Turner J, 19 October 1990) transcript p 13. In this case, six of the eight defendants, including the company, were charged with manslaughter.
[60] The Caldwell test from R v Caldwell [1081] 1 All ER 961(HL) was adopted for manslaughter in R v Seymour[1983] 2 AC 493. The application of Caldwell recklessness in the P & O European Ferries (Dover) Ltd prosecution required that each defendant either gave no thought to an obvious and serious risk that the vessel would sail with her bow doors open and capsize, or that if they had given thought or consideration to that risk,, each defendant, nevertheless, went on to run it. The prosecution evidence was insufficient to justify such finding. It consisted of the testimony of a number of ships' masters who said that it had not occurred to them that any risk existed, let alone that it was an obvious one. Therefore, even a method of aggregation would not have led to a corporate conviction. See R v Stanley and others [1990] Central Criminal Court No. 900160 (Unreported, Turner J, 19 October 1990), transcript pp 9E-10B, 16G-17F. Turner J also referred to the evidence of witnesses from other shipping lines as to practice adopted on their ships (atp 17D-F):
I do not understand that the statements of any of these witnesses condescend to criticism of the system employed by the defendants in this case as one which created an obvious and serious risk, except to the extent that any legitimate deduction may be made from the fact that they took precautions other than those employed by any of these defendants.
[61] The rejection of the aggregation approach in the criminal law was confirmed by the English Court of Appeal in Re A-G's Reference (No 2 of 1999) [2000] EWCA Crim 91; [2000] 3 All ER 182, 214.
[62] Legislating the Criminal Code: Involuntary Manslaughter, above n 10, paras 6.55-6.56. (Emphasis in original).
[63] R v Bateman (1925) 19 Cr App R 8.
[64] See C Wells, 'Manslaughter and Corporate Crime' (1989) 139 New Law Journal 931.
[65] S Field and N Jorg, 'Corporate Liability and Manslaughter: should we be going Dutch?' [1991] Criminal Law Review 156, 158-159.
[66] Meridian Global Funds Management Asia Ltd v Securities Commission [1995] UKPC 5; [1995] 3 NZLR 7; [1995] 2 AC 500.
[67] Rv Stanley and others [1990] Central Criminal Court No. 900160 (Unreported, Turner J, 19 October 1990).
[68] Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 1.17.
[69] Department of Transport (UK),MV Herald of Free Enterprise: Report of the Court No 8074, Department of Transport (1987) ('Sheen Report'), para 14.1.
[70] Section 2 states that 'employer':
(a) means a person who or that employs any other person to do any work for hire or reward; and, in relation to any employee, means an employer of the employee; and
(b) includes, in relation to any person employed by the chief executive or other employee of a Crown organisation to do any work for the Crown organisation for hire or reward, that Crown organisation.
[71] Section 2A defines 'all practicable steps' as 'all steps to achieve the result that it is reasonably practicable to take in the circumstances, having regard to—
(a) the nature and severity of the harm that may be suffered if the result is not achieved; and
(b) the current state of knowledge about the likelihood that harm of that nature and severity will be suffered if the result is not achieved; and
(c) the current state of knowledge about harm of that nature; and
(d) the current state of knowledge about the means available to achieve the result, and about the likely efficacy of each of those means; and
(e) the availability and cost of each of those means.'
Section 2A(2) states: 'To avoid doubt, a person required by this Act to take all practicable steps is required to take those steps only in respect of circumstances that the person knows or ought reasonably to know about.'
[72] The whole of section 6 stipulates that:
Every employer shall take all practicable steps to ensure the safety of employees while at work;
and in particular shall take all practicable steps to—
(a) Provide and maintain for employees a safe working environment; and
(b) Provide and maintain for employees while they are at work facilities for their safety and
health; and
(c) Ensure that plant used by any employee at work is so arranged, designed, made, and maintained
that it is safe for the employee to use; and
(d) Ensure that while at work employees are not exposed to hazards arising out of the arrangement,
disposal, manipulation, organisation, processing, storage, transport, working, or use of things—
(i) In their place of work; or
(ii) Near their place of work and under the employer's control; and
(e) Develop procedures for dealing with emergencies that may arise while employees are at
work.
[73] Health and Safety in Employment Act 1992, ss 49 and 50.
[74] Chapman Tripp, Employment Trippwire - Does New Zealand need a corporate manslaughter offence?, (September 2002) Chapman Tripp Employment Trippwire <http://www.chapmantripp.co.nz/resource_library/published_article.asp?id=1690#block2.html> at December 2005; and Mark Ryan, Corporate Manslaughter! (2005) Haigh Lyon Website <http://www.haighlyon.co.nz/index.cfm?page=latest.html> at December 2005.
[75] See Katy Gallagher MLA, Minister for Industrial Relations, Industrial Manslaughter Fact Sheet (26 September 2003), ACT WorkCover website <http://www.psm.act.gov.au.html> , 1 at December 2005.
[76] For an Australian perspective of this argument in relation to its existing occupation health and safety regimes, see K Wheelwright, 'Prosecuting corporations and officers for industrial manslaughter - recent Australian developments' (2004) 32 Australian Business Law Review 239. Wheelwright, at 241-242, writes:
A number of theories are advanced for this failure to treat workplace deaths as seriously as deaths caused by reckless or negligent behaviour outside the workplace. These include the still pervasive view that workplace 'accidents' that harm workers are the worker's fault, that they are to a large extent unavoidable, and that 'workers have assumed the risk of being maimed and killed at work within the set rules.' This view is itself reflected in the nature of OHS offences. They are inchoate offences 'in the sense that they require no specific harm to be proven, but rather contemplate the possibility of risk of harm.' The offence is the failure to provide a safe workplace, rather than the act of killing or injuring a worker. Health and safety breaches are 'regulatory offences', as opposed to 'real crimes.' Breaches of these 'welfare' offences are investigated by public servants, and are rarely referred to police, even where criminal negligence may be present. The emphasis of the OHS enforcement regimes is to educate, assist and to persuade employers to comply with their legal duties, to prefer lower levels of enforcement (such as infringement notices) and to prosecute only as a last resort. (Footnotes omitted).
[77] Section 50 of the Health and Safety in Employment Act 1992 states that persons who commit an offence under the Act are liable to summary conviction.
[78] Wheelwright, above n 76, 242.
[79] From the period of 1 July 2004 to 31 March 2005, the average fine for Health and Safety in Employment Act 1992 offences was $4,850. See Department of Labour, Health and Safety in Employment Act 1992 Prosecution Statistics: Period to 31 March 2005, Department of Labour <http://www.osh.govt.nz/resources/stats/prosecutions/prosec-hseact.shtml> at December 2005. A possible reason for the small fines imposed for these offences which do not reflect the serious consequences of the offences is the fact that the conduct proscribed is failure to comply with a duty, whether or not death or injury resulted. Thus the fact that an employee died or has been seriously injured is immaterial: D Bergman, The Perfect Crime? How Companies Escape Manslaughter Prosecution (1994), 102. However, the High Court in Labour v De Spa & Co Ltd (1994) 4 NZELC (digest) 98,275; [1994] 1 ERNZ 339, stated that the degree of harm resulting to the employee was one of the factors which would play a role in determining the level of a fine under the Health and Safety in Employment Act 1992.
[80] A startling Australian example is the AUS$2 million fine for Esso under the Victorian Occupational Health and Safety Act 1985 (Vic) as a result of safety breaches from the Longford explosion: see DPP v Esso [2001] VSC 263. Esso's parent company Exxon earns $14 billion per year.
[81] Of the 154 prosecutions brought under the Health and Safety in Employment Act 1992 last year, only four involved directors. See Department of Labour, Prosecutions statistics Period 1 July 2004-31 March 2005, Department of Labour <http://www.osh.govt.nz/resources/stats/prosecutions/prosec-sum-2004-05.shtml> at 2005.
[82] By the Health and Safety Amendment Act 2002.
[83] The number of prosecutions initiated by the Department of Labour has reduced since the 2003 amendments, but the average fine remains the same: see Department of Labour, Summary of Prosecutions (2005) Department of Labour <http://www.osh.govt.nz/resources/stats/prosecutions/index.shtml> at December 2005. Furthermore, the number of work-related injury claims remains the same (245,000 claims in 2004; 246,600 in 2003; 244,000 in 2003; 234,800 in 2002) (from Statistics New Zealand - <http://www.stats.govt.nz.html> ).
[84] This list is mainly taken from Legislating the Criminal Code: Involuntary Manslaughter, above n 10, paras 7.8-7.25.
[85] See above Part II - 'Corporate Liability for Manslaughter'.
[86] 'Neo-liberal reasoning cautions against "government overreach and overload", including warning against the purported benefits of welfarism and assumed responsibility of the state for addressing all social and economic problems': Steven Bittle, 'Constituting the Corporate Criminal: Corporate Criminal Liability in Post-Westray Canada', 5, in Governing the Corporation: Mapping the Loci of Power in Corporate Governance Design (20-21 Sept 2004).
[87] R Johnstone, Occupational Health and Safety Law and Policy Text and Materials (2nd ed, 2004), 474-475.
[88] See below Part VI - 'Sentencing an Organisation'.
[89] See discussion above Part III.
[90] Other reasons against the extension of corporate liability for manslaughter include the fact that a company's profit belongs to its shareholders and that shareholders should not be penalised for something which is no fault of theirs by the imposition of a fine on the company; and that the fine imposed on a corporation does not go to the victims or that a fine may be misunderstood as in some way placing a value on the lives that were lost. The English Law Commission refutes both these arguments Legislating the Criminal Code: Involuntary Manslaughter, above n 10, paras 7.24-7.25.
[91] R v Stanley and others [1990] Central Criminal Court No. 900160 (Unreported, Turner J, 19 October 1990).
[92] Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 7.21.
[93] Ibid, para 7.22.
[94] For example, consultation for the United Kingdom's Corporate Manslaughter Bill started in 1994 and is still ongoing: see Involuntary Manslaughter: a Consultation Paper, above n 10; Legislating the Criminal Code: Involuntary Manslaughter, above n 10; Reforming the Law on Involuntary Manslaughter, above n 10; Corporate Manslaughter: The Government's Draft Bill for Reform, above n 10.
[96] Such a failure constitutes an offence under section 33(1) of the Health and Safety at Work etc Act 1974 (UK).
[97] Professor John Smith comments that this is an unsatisfactory response. He contends that the failure of a hypothetical lorry driver to observe a red light cannot really be described as a failure by the employer to perform his or her duty. He argues that the answer may lie in the adoption of anarrower interpretation of the words in the subsection, 'conducthis undertaking.' He concludes that the effect 'might be to limit liability to failures to establish and maintain safe systems of work and to exclude individual failures to apply them': [1995] Criminal Law Review 655, 656.
[98] [1995] ICR 586, 594D-E.
[99] [2001] NZCA 125; [2001] 2 NZLR 639.
[100] The Court of Appeal in this case stated that the effect of the New Zealand Act and the English Act is the same: Linework Ltd v Department of Labour [2001] NZCA 125; [2001] 2 NZLR 639, 646-647.
[101] Seaboard Offshore Ltd v Secretary of State for Transport [1994] 1 WLR 541, in which the House of Lords held that the relevant provision, s 31 Merchant Shipping Act 1988 (UK), did not impose liability. Section 31 provides:
It shall be the duty of the owner of a ship to which this section applies to take all reasonable steps to secure that the ship is operated in a safe manner.
If the owner of a ship to which the section applies fails to discharge the duty imposed on him by subsection (1), he shall be guilty of an offence...
Lord Keith of Kinkel (who made the only reasoned speech) rejected that a manager is vicariously liable for a breach of duty under s 31 arising from any act or omission by any of the manager's servants or agents, emphasising the words in subsection (4) that state that the taking of 'all reasonable steps' is construed as a reference to the taking of all such steps as are reasonable to 'him', ie. the owner, charterer or manager. His Lordship concluded that Parliament intended that such steps for 'him' would not include any act or omission by any officer of the company or member of the crew which resulted in unsafe operation of the ship, ranging from a failure by the managing director to arrange repairs to a failure by the bosun or cabin steward to close portholes. Such steps for 'him', his Lordship stated (at 545E-G), included 'the idea of laying down a safe manner of operating the ship by those involved in the actual operation of it and taking appropriate measures to bring it about that such safe manner is adhered to.'
[102] [2001] NZCA 125; [2001] 2 NZLR 639, 648.
[103] [2001] NZCA 125; [2001] 2 NZLR 639, 645.
[104] [2001] NZCA 125; [2001] 2 NZLR 639, 650. (Emphasis added).
[105] For an argument to address the issues raised by this article by strengthening existing regulatory occupational safety and health offences, see A Hall and R Johnstone, 'Exploring the Re-Criminalising of OHS breaches in the context of Industrial Death' [2005] FlinJlLawRfm 3; (2005) 8 Flinders Journal of Law Reform 57.
[106] Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 7 .26-7 .27.
[107] For an in-depth discussion of vicarious liability as used in the United States, see C Wells, Corporations and Criminal Responsibility (1993) 119; and Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 7.28.
[108] Except for public nuisance and criminal libel, as mentioned in Part II - 'Vicarious Liability of Corporations' above.
[109] In 'Corporate Personality and Criminal Liability' (1995) 6 Criminal Law Forum 1, 8, Professor Eric Colvin points out that vicarious liability has been criticised by academic commentators for being both 'underinclusive' and 'overinclusive':
It is underinclusive because it is activated only through the criminal liability of some individual. Where offences require some form of fault, that fault must be present at the individual level. If not present at that level, there is no corporate liability regardless of the measure of corporate fault. Yet vicarious liability is also overinclusive because, if there is individual liability, corporate liability follows even in the absence of corporate fault. The general objection to vicarious liability in criminal law - that it divorces the determination of liability from an inquiry into culpability - applies to corporations as it does to other defendants. The special characteristics of corporations do not insulate them from the stigmatizing and penal consequences of a criminal conviction.
[110] Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 7.31.
[111] Gobert points out that' [i] t is often the case that different corporate officers and employees bear varying degrees of responsibility for any given offence. Fault may be diffused throughout the company, and may be particularly difficult to pin down when the crime is alleged to consist of the failure to prevent the harm in question from occurring': J Gobert, 'Corporate Criminality: Four Models of Fault' (1994) 14 Legal Studies 393, 398.
[112] For a detailed discussion, see C Wells, Corporations and Criminal Responsibility (2001), 156; and S Field and N Jorg, above n 65, 161-162. An aggregation approach, in general, finds support from Simester and Brookbanks: Simester and Brookbanks, above n 16, 225. Furthermore, Smith and Hogan drew from English civil cases that the principle of aggregation should apply to gross negligence manslaughter: if a company owed a duty of care and its actions fell far below the standard required, even if this was the fault of a number of officers, the company would still be guilty of gross negligence: J C Smith and B Hogan, Criminal Law (7th ed, 1992), 184.
[113] This is not to say that an aggregation approach of fault may not be used for a special corporate killing offence. See below Part VI - 'Conduct of the Defendant that Causes Death'.
[114] Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 7.33.
[115] '[O]nce the derivative model [a model of liability derived from the traditional insistence that corporate liability be derived from individual liability] is abandoned in favour of a model of true organizational responsibility, aggregation becomes a weak conceptual tool. The question to be asked in not whether responsibility can be constructed from bits and pieces of information, but rather whether it inheres in the organization itself: E Colvin, 'Corporate Personality and Criminal Liability' (1995) 6 Criminal Law Forum 1, 23.
[116] B Fisse and J Braithwaite, 'The Allocation of Responsibility for Corporate Crime: Individualism, Collectivism and Accountability' [1988] SydLawRw 3; (1988) 11 Sydney Law Review 468.
[117] The concurrence principle states that as a general rule, the actus reus and mens rea of a crime must coincide in time. This is illustrated by the comment of French, in criticism of the reactive fault model, that it is not true that a failure to 'mend one's ways after being confronted with an unhappy outcome of one's actions is strong presumptive evidence that one had originally intended that outcome ... If it were not intentional, nothing after the action could make it intentional when it occurred': French, 'Principles of responsibility, Shame and the Corporation' in Fisse and French (eds) Corrigible Corporations and Unruly Laws (1985) 31, cited by T Woolf, 'The Criminal Code Act 1995 (Cth) - Towards a Realist Vision of Corporate Criminal Liability' (1997) 21 Criminal Law Journal 257, 266.
[118] Simester and Brookbanks, above n 16, 227.
[119] The English Law Commission also refused to adopt 'reactive fault': Involuntary Manslaughter: a Consultation Paper, above n 10, para 5.76; Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 7.35. Laufer argues that a corporation's reaction after an offence should affect the degree of blame attached to the corporation at the sentencing stage: W S Laufer, 'Corporate Body and Guilty Minds' (1994) 43 Emory Law Journal 648, 671.
[120] Such as at the federal levels in Australia and Canada (see below Part VI).
[121] Such as the industrial manslaughter offence in the Australian Capital Territory's Crimes Act 1900 (ACT), and the corporate manslaughter offence proposed in the United Kingdom's draft Corporate Manslaughter Bill (see below Part VI).
[122] See Involuntary Manslaughter: a Consultation Paper, above n 10, para 5.77.
[123] The presence of such a corporate manslaughter offence in New Zealand's statutes would also ensure that an indictment could lie against a corporation for manslaughter in New Zealand. See above Part II - 'Corporate Liability for Manslaughter'. It is noted that another option for reform is the development of 'safety cultures'. This article does not consider this method to be particularly practical or effective. For a discussion of this method see Simester and Brookbanks, above n 16, 226.
[124] This approach is used by the English Government for its Corporate Manslaughter Bill: Corporate Manslaughter: The Government's Draft Bill for Reform, above n 10, 6.
[125] However, offences at the federal government level apply to deaths of a federal government employee.
[126] The other respective states continue to apply their own principles of criminal responsibility. In relation to corporate criminal liability, most of the states follow the common law doctrine of identification. However, debate about the extension of corporate criminal responsibility is on the agenda of most states. For a discussion of the developments in the Australian States, see Wheelwright, above n 76, 248-251.
[127] The senior officer offence is considered in Part VI - 'Punitive Sanctions Against Corporate Individuals when a Corporation is Found Guilty of the Corporate Killing Offence?' below.
[128] The application in ACT and Canada is wide. The ACT's employer offence of industrial manslaughter applies to an 'employer'. Section 49Aof the Crimes Act 1900 (ACT) states that a person is an 'employer' of a worker if 'the person engages the worker as a worker of the person' or ' an agent of the person engages the worker as a worker of the agent'. Section 49A defines an 'agent' as a person engaged by the employer (whether an independent contractor or otherwise), or engaged by another agent of the employer, to provide services to the employer in relation to matters over which the employer has control, or would have had control apart from an agreement between the employer and the agent. A 'worker' means an employee, an independent contractor, an outworker, an apprentice or trainee, or a volunteer. The Act covers both government and private sector employers, and both corporate and natural persons. The Act will not apply, however, to any Commonwealth authorities and government business enterprises in the ACT if the Commonwealth Parliament passes the Occupational Health and Safety (Commonwealth Employment) Amendment (Promoting Safer Workplaces Bill) 2004. Corporate criminal liability in Canada under Bill C-45, An Act to amend the Criminal Code (criminal liability of organizations applies to an 'organisation', which is a public body, body corporate, society, company, firm, partnership, trade union or municipality; or an association of persons that is created for a common purpose, has an operation structure and holds itself out to the public as an association of persons.
[129] Furthermore, because unincorporated bodies do not have a distinct separate legal personality, they cannot be prosecuted for gross negligence manslaughter in the United Kingdom, although the individual members might be: Corporate Manslaughter: The Government's Draft Bill for Reform (March 2005), above n 10, 16. See also D Macpherson, 'Extending Corporate Criminal Liability?: Some thoughts on Bill C-45' (2004) 30 Manitoba Law Journal 253, 256-258.
[130] See Reforming the Law on Involuntary Manslaughter: The Government's Proposals, above n 10, paras 3.2.3-3.26. Another reason not to exclude unincorporated bodies from an offence is that enterprises may be deterred from incorporation, although this argument is doubted in M Coutino, 'How will corporate manslaughter change?' (2005) 155 New Law Journal 1344.
[131] This is borrowed from the United Kingdom's Corporate Manslaughter Bill. However, unlike the proposed offence for New Zealand the offence in the Corporate Manslaughter Bill only applies to a corporation and a government department or other bodies listed in its Schedule. The offence applies where an organisation owes a duty of care under the law of negligence as employer or occupier of land, or when supplying goods or services or when engaged in other commercial activities (for example, in mining or fishing) but not when exercising an exclusively public function. Exclusively public functions are functions that fall within the prerogative of the Crown or are, by their nature, exercisable only with authority conferred by the exercise of that prerogative, or by under an enactment. Examples of this are civil emergency services or functions relating to the custody of prisoners. Organisational failings in exclusively public functions were considered 'more appropriately matters for wider forms of public and democratic accountability': Corporate Manslaughter: The Government's Draft Bill for Reform, above n 10, 11. Furthermore, an organisation that is a public authority does not owe a duty of care in respect of decisions as to matters of public policy (including in particular the allocation of public resources or the weighing of competing public interests). Moreover, the Bill confirms that whether an organisation owes a duty of care to a particular individual is a question of law.
[132] A parent company (as well as any subsidiary) is included where it owed a duty of care to the victim in respect of one of the activities covered by the offence.
[133] See Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 8.8.
[134] The complete clause 1(1) states:
(1) An organisation to which this section applies is guilty of the offence of corporate manslaughter if the way in which any of the organisation's activities are managed or organised by its senior managers-
(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.
[135] See Legislating the Criminal Code: Involuntary Manslaughter, above n 10, paras 8.10-8.35. At para 8.19, the Law Commission writes:
The question is always: was adequate provision made for the carrying out of the job in hand under the general system of work adopted by the employer or under some special system adapted to meet the particular circumstances of the case? We have adopted a similar approach for the corporate offence: under our recommendations, the crucial question would be whether the conduct in question amounted to a failure to ensure the safety in the management or organisation of the corporation's activities (referred to as a 'management failure' for short). This would be a question of fact for the jury to determine ...
[136] Criminal Code Act 1995, s 12.4(2).
[137] Criminal Code Act 1995, s 12.4(3).
[138] Australian Law Reform Commission, Principled Regulation , Report 95 (2002), para 7.144, referring to B Fisse, 'The Attribution of Criminal Liability to Corporations; A Statutory Model' [1991] SydLawRw 23; (1991) 13 Sydney Law Review 277, 374.
[139] See Department of Justice (Canada), Government Response to the Fifteenth Report of the Standing Committee on Justice and Human Rights: Corporate Liability (November 2002); and D Coetz, Parliamentary Research Branch: Law and Government Division (Canada), Legislative Summary: Bill C-45: An Act to amend the Criminal Code (Criminal Liability of Organizations) (July 2003), (LS-457E).
[140] Furthermore, a duty of reasonable care for the safety of workers or others has been codified. Section 217.1 of the Criminal Code now provides:
217.1 Every one who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task.
Section 1(1) of the Criminal Code defines 'every one' to include an 'organisation.' See below Part VI - 'Punitive Sanctions Against Corporate Individuals when a Corporation is Found Guilty of the Corporate Killing Offence?'.
[141] T Archibald, K Jull and K Roach, 'The Changed Face of Corporate Criminal Liability' (2004) 48 Criminal Law Quarterly 367, 386.
[142] This comment was made by the Health and Safety Executive (HSE) in response to the English Law Commission's 1994 Consultation Paper: Involuntary Manslaughter: a Consultation Paper, above n 10. An example of this fact in relation to New Zealand organisations is the Mount Erebus disaster., where the Mahon Report placed blame on airline systems rather than the plane crew: Report of the Royal Commission to inquire into the Crash of Mount Erebus, Antarctica of a DC 10 Aircraft FT Aircraft operated by Air New Zealand Ltd, above n 7.
[143] Corporate Manslaughter: The Government's Draft Bill for Reform, above n 10, 12.
[144] See the example used in R v British Steel Plc [1995] ICR 586, 594-595; and the 'lorry driver' example used by the English Law Commission to illustrate the concept of 'management failure': Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 8.21.
[145] Ibid para 8.23.
[146] In contrast, Woolf is of the view that where a single localised department, whatever its size, has a policy of bending the rules to fulfil it quotas, it seems reasonable to hold the entire corporation liable for a negligence offence as it has arguably breached its standard of care by failing to have in place an effective system of monitoring the levels of compliance in all its departments: T Woolf, 'The Criminal Code Act 1995 (Cth) - Towards a Realist Vision of Corporate Criminal Liability' (1997) 21 Criminal Law Journal 257, 264.
[147] The Canadian Criminal Code requires a 'senior officer' to be implicated in the criminal activity. 'Senior officer' is defined in s 1(2) of Bill C-45, An Act to Amend the Criminal Code (criminal liability of organizations) in similar but narrower terms than the United Kingdom's Corporate Manslaughter Bill's definition of 'senior manager'.
[148] See Corporate Manslaughter: The Government's Draft Bill for Reform, above n 10, 35.
[149] G Forlin, 'Corporate manslaughter: where are we now?' (2005) 155 New Law Journal 717, 720.
[150] M Coutino, 'How will corporate manslaughter change?' (2005) 155 New Law Journal 1344.
[151] Woolf notes that this drafting problem causes other difficulties: Woolf, above n 146, 271.
[152] See Department of Justice (Canada), A Plain Language Guide, Bill C-45, (2003) Department of Justice (Canada) <http://Canada.justice.gc.ca/en/dept/pub/c45/index.html> , 6, at December 2005.
[153] Bill C-45, An Act to Amend the Criminal Code (criminal liability of organizations), s 1(2).
[154] The United Kingdom's draft Bill also does not mention the physical element of killing, and the Law Commission and Government commentary leading up to the Bill does not make reference to it at all. Therefore, the reason for its absence in the Bill is not apparent.
[155] This view is shared by E Colvin in 'Corporate Personality and Criminal Liability' (1995) 6 Criminal Law Forum 1, 31. On the contrary, Laufer argues that the use of agency principles waters down the pure primary liability of companies because it renders companies liable for the conduct of their employees, regardless of whether their actions were the actions of the company itself: corporations should only be punished for 'primary actions' that are 'owned or authored' by the corporation, and not for 'secondary actions', which are those of individual agents: W S Laufer, 'Corporate Bodies and Guilty Minds' (1994) 43 Emory Law Journal 648, 680.
[156] Scope of employment and authority would most likely be interpreted by the courts in the same way as the term is defined in the context of statutory provisions imposing vicarious liability: Woolf, above n 146, 259-260.
[157] See, however, the problem noted in n 158 below.
[158] R v Pagett [1983] EWCA Crim 1; (1983) 76 Cr App R 279, 288-289; [1984] Crim LR 393, 394 (CA). However, the leading judgment in the House of Lords decision of Environment Agency v Empress Car Co (Abertillery) Ltd [1998] UKHL 5; [1999] 2 AC 22 (HL), given by Lord Hoffmann, did not afford special status to interventions of a third party that were free, deliberate and informed, and failed to distinguished such acts from acts which are either uninformed or not free. The same test was to apply to all, and Lord Hoffmann, at 35d, stated that '[t]he true common sense distinction is, in my view, between acts and events which, although not necessarily foreseeable in the particular case, are in generality a normal and familiar fact of life, and acts or events which are abnormal and extraordinary.' Hence an intervention, even if fully informed and deliberate, would only break the chain of causation linking the defendant to the ultimate outcome if it was extraordinary. This may cause problems with the pilot example given in the previous paragraph of the text above with the facts altered so that the plane crashed due to some technical failure which was itself caused by a management failure: under Empress, a management failure may be found in such an example. Simester and Brookbanks criticise Empress and, notwithstanding the persuasive authority of House of Lords decisions, hope that this decision will be disregarded in New Zealand: Simester and Brookbanks, above n 16, 75-77.
[159] Simester and Brookbanks, above n 16, 67-68.
[160] Ibid 78-79.
[161] This view is shared by the English Government: Corporate Manslaughter: The Government's Draft Bill for Reform, above n 10, 13.
[162] This view was shared by the English Law Commission: Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 8.5.
[163] As stated above in Part II - 'Applying the Substantive Law of Manslaughter to Corporations', the mens rea requirement for involuntary manslaughter by omission is gross negligence.
[164] R vAdomako [1994] UKHL 6; [1995] 1 AC 171,187; [1994] UKHL 6; [1994] 3 All ER 79, 89 (HL). See Simester and Brookbanks, above n 16, section 16.5.2.
[165] Similarly, in the United Kingdom, Australia and Canada, a high standard of serious misconduct is required. Clause 1 (1) of the United Kingdom's draft B ill requires ' a gross breach of a relevant duty of care owed by the organisation to the deceased.' Clause 3(1) defines a 'gross breach' as 'conduct falling far below what can reasonably be expected of the organisation in the circumstances.' For the ACT offence, s 49D of the Crimes Act 1900 (ACT) requires recklessness or negligence. A person is reckless in relation to a result or circumstance if the person is aware of a substantial risk that the result will happen, or that the circumstance will exist, and having regard to the circumstances known to the person, it is unjustifiable to take the risk: s 20 Criminal Code 2002 (ACT). Section 21 defines negligence (in relation to the physical element of the offence) as conduct meriting criminal punishment for the offence because it involves:
(a) such a great falling short of the standard of care that a reasonable person would exercise in the circumstances; and
(b) such a high risk that the physical element exists or will exist.
Under the Canadian Criminal Code, manslaughter requires criminal negligence, defined as a 'wanton or reckless disregard for the lives or safety of other persons': Criminal Code, s 219. Section 22.1 also requires that the senior officer or officers collectively departed 'markedly from the standard of care that, in the circumstances, could reasonably be expected to prevent a representative of the organization from being a party to the offence.'
[166] Cases arising out of fatal accidents which are prosecuted under regulatory legislation such as the Health and Safety in Employment Act 1992 are often proceeded with summarily, but in these cases the causing of death is not part of the offence. Section 50 of the Health and Safety in Employment Act 1992 states that a person who commits an offence under the Act is liable to summary conviction.
[167] This view was shared by the English Law Commission, as opposed to the subsequent view of the English Government. See Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 8.6.
[168] Such considerations may actually include those stated in clause 3(2) of the draft Bill. In many cases, the jury will have to balance such matters as the likelihood and possible extent of the harm arising from the way in which the company conducted its operations against the social utility of its activities and the cost and practicability of taking steps to eliminate or reduce the risk of death or serious personal injury. The jury might also think it right to take account of the extent (if any) to which the defendant organisation's conduct diverged from practices generally regarded as acceptable within the trade or industry in question: see discussion in Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 8.6-8.7.
[169] Legislating the Criminal Code: Involuntary Manslaughter, above n 10, para 8.77. (Emphasis in original).
[170] Woolf is concerned that by continuing to allow corporate criminal liability to be based upon the identification of particular senior officers with the corporate entity, the legislature detracts from any bold attempt to move away from derivative corporate liability to genuine corporate fault based on organisational criteria: Woolf, above n 146, 260.
[171] This is assuming that the view argued earlier that R v Murray Wright [1970] NZLR 476 would be decided differently today and thus an indictment for manslaughter could lie against a company in New Zealand, is adopted. See above Part II - 'Corporate Liability for Manslaughter'.
[172] Simester and Brookbanks, above n 16, 224. An individual officer of the company may avoid liability if he or she did not know of the facts which were constitutive of the offence or offences committed by other senior officials of the company and by which the company was itself impugned: Cardin Laurant Ltd v Commerce Commission [1989] NZHC 201; [1990] 3 NZLR 563; (1989) 3 TCLR 470. But where a company employee is knowingly concerned in the commission of offences committed by the company, he or she can be prosecuted for the identical acts and decisions that were relied on as the acts of the company: Simester and Brookbanks, above n 16, 224; and see Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121, 125; [1988] HCA 65; 82 ALR 626, 628 (HCA). Individual liability may also attach to company directors or managers in respect of an offence committed by the company where the statute creating the offence specifically provides, as does s 340 of the Resource Management Act 1991, that the directors or persons involved in the management of the corporation are liable unless they can prove that they did not know that the offence was being committed or that they took all reasonable steps to prevent its commission. See Machinery Movers Ltd v Auckland Regional Council [1993] NZHC 2908; [1994] 1 NZLR 492; (1993) 2 NZRMA 661.
[173] Reforming the Law on Involuntary Manslaughter: The Government's Proposals, above n 10, paras 3.4.7-3.4.13.
[174] Ibid paras 3.4.12-3.4.13. (Emphasis added).
[175] The English Government reasons that its proposal, of which the focus is to tackle the restrictions in the law for holding corporations accountable for gross negligence manslaughter, is a matter of corporate not individual liability: Corporate Manslaughter: The Government's Draft Bill for Reform, above n 10, 17. Forlin notes that although this proposal will be subject to criticism, more individuals are being prosecuted than ever before in the United Kingdom for gross negligence manslaughter and individual health and safety charges under the current law, and the trend is accelerating: G Forlin, 'Corporate Manslaughter: where are we now?' (2005) 155 New Law Journal 717.
[176] The general manslaughter offence under ACT law carries a penalty of imprisonment only (maximum 20 years): Crimes Act 1900 (ACT), s 15(2).
[177] Gallagher, above n 75, 3.
[178] This is in contrast to the unsuccessful Victorian Bill, which proposed that certain company officers be held liable for an offence where the officer was 'organisationally responsible' for the death or serious injury; the officer materially contributed to the offence by performing or failing to perform his or her organisational responsibilities; and the officer knew that as a consequence of his or her conduct, the company would engage in high risk conduct: Crimes (Workspace Deaths and Injuries) Bill 2001, s 14C. For a brief discussion, see K Wheelwright, 'Corporate Liability for Workspace Deaths and Injuries - reflecting on Victoria's Laws in the Light of the Esso Longford Explosion' (2002) 2 Deakin Law Review 323.
[179] Crimes Act 1961, s 177. However, it is noted that under s 81 of the Sentencing Act 2002 a court may impose a term of imprisonment for a lesser term.
[180] K Wheelwright, 'Prosecuting corporations and officers for industrial manslaughter – recent Australian developments' (2004) 32 Australian Business Law Review 239, 247.
[181] Ibid 252. Wheelwright explains that' [t]he ACT senior officer offence is very narrowly confined, perhaps reflecting that the government anticipated strong opposition to any increase in individual liability for workplace deaths. The Minister's openness in contrasting this offence with its failed Victorian counterpart from the outset suggests this.' Ibid 256.
[182] For example, s 56(1) of the Health and Safety in Employment Act 1992 provides:
Where a body corporate fails to comply with a provision of this Act, any of its officers, directors, or agents who directed, authorised, assented to, acquiesced in, or participated in, the failure is a party to and guilty of the failure and is liable on conviction to the punishment provided for the offence, whether or not the body corporate has been prosecuted or convicted. See above Part VI - 'Conduct of the Defendant that Causes Death', which discusses this provision.
[183] Wheelwright, above n 180, 252. (Footnote omitted).
[184] Currently, it appears that an employer may face indictment under s150Aof the Crimes Act 1961 for its failure to provide a safe working environment or to ensure the safety of an employee even though its company has already been convicted for a breach of the Health and Safety in Employment Act 1992 for the same incident. See R v Spencer (2001) 6 NZELC (digest) 98,631.
[185] As Lord Aitchison (the Lord Justice-Clerk) explained in Wilsons and Clyde Coal Co Ltd v English 1936 SC 883 (at 904):
[B]roadly stated, the distinction is between the general and particular, between the practice and method adopted in carrying on the master's business of which the master is presumed to be aware and the insufficiency of which he can guard against, and isolated or day to day acts of the servant of which the master is not presumed to be aware and which he cannot guard against; in short, it is the distinction between what is permanent or continuous on the one hand and what is merely casual and emerges in the day's work on the other hand.
[186] This is adopted from the illustration used by the English Law Commission to show how its proposed offence in 1996 would operate: see Legislating the Criminal Code: Involuntary Manslaughter, above n 10, paras 8.45-8.50.
[187] M V Herald of Free Enterprise: Report of the Court, above n 69, para 10.9.
[188] Ibid para 14.1. (Emphasis added).
[189] See above Part II - 'Applying the Substantive Law of Manslaughter to Corporations'.
[190] There were eight defendants in total, six of which, including the company, were charged with manslaughter.
[191] R v Stanley and others [1990] Central Criminal Court No. 900160 (Unreported, Turner J, 19 October 1990).
[192] Sentencing options for a New Zealand court in relation to criminal offences are contained in the Sentencing Act 2002.
[193] For a detailed explanation of these four options, see J Clough, 'Will the Punishment fit the Crime? Corporate Manslaughter and the Problem of Sanctions' [2005] FlinJlLawRfm 5; (2005) 8 Flinders Journal of Law Reform 113.
[194] Currently, s 308 of the Companies Act 1993 states nothing in Part XVI of the Act (Liquidations) limits or affects the recovery, whether before or after the commencement of the liquidation, of a fine imposed on a company for the commission of an offence or a monetary penalty payment to the Crown imposed on a company for any enactment, or costs ordered to be paid by the company in relation to proceedings for the offence or breach.
[195] Adverse publicity as a sentencing option for a criminal offence in the sense that it is referred to in this article, does not currently exist in New Zealand. However, s 320 of the Companies Act 1993 states that when a company is liquidated and removed from the companies register, the Registrar must give public notice of, inter alia, the company's name, the section of the Act used and the grounds on which it is intended to remove the company.
[196] Corporate probation as a sentencing option for a criminal offence in the sense that it is referred to in this article, does not currently exist in New Zealand.
[197] Corporate incapacity and restraint as a sentencing option for a criminal offence in the sense that it is referred to in this article, does not currently exist in New Zealand.
[198] Bill C-45 also added into the Canadian Criminal Code sentencing guidelines for imposing a fine on 'organisations': Bill C-45, An Act to Amend the Criminal Code (criminal liability of organizations), s 14. For a critical discussion of these sentencing guidelines, see D Macpherson, 'Extending Corporate Criminal Liability?: Some thoughts on Bill C-45' (2004) 30 Manitoba Law Journal 253, 276-277; and T Archibald, K Jull and K Roach, 'The Changed Face of Corporate Criminal Liability' (2004)48 Criminal Law Quarterly 367, 389-391. For a list of factors which would play a role in New Zealand in determining the level of a fine imposed under the Health and Safety in Employment Act 1992, see Department of Labour v De Spa & Co Ltd (1994) 4 NZELC (digest) 98, 275; [1994] 1 ERNZ 339.
[199] There was great outcry at the AUS$2 million fine for Esso as a result of safety breaches from the Longford explosion under the Victorian Occupational Health and Safety Act 1985 (Vic): see DPP v Esso [2001] VSC 263. Esso's parent company Exxon earns A$14 billion per year.
[200] See Clough, above n 193, 120.
[201] Coffee describes an 'equity fine' as follows: J C Coffee, ' "No soul to damn: no body to kick": an unscandalized enquiry into the problem of corporate punishment' (1981) 79 Michigan Law Review 386, 413)
[W]hen very severe fines need to be imposed on the corporation, they should be imposed not in cash, but in securities of the corporation. The convicted corporation should be required to authorise and issue such number of shares to the state's crime victim compensation fund as would have an expected market value equal to the cash fine necessary to deter illegal activity. The fund should then be able to liquidate the securities in whatever manner maximises their return. For a detailed discussion of equity fines, see New South Wales Law Reform Commission, Sentencing: corporate offenders, Report 102 (2003), chapter 7.
[202] See Sentencing: Corporate Offenders ibid; J Clough and C Mulhern, The Prosecution of Corporations (2002), chapter 5.
[203] In making an order under subs (2), the court must take into account the corporation's financial circumstances and the nature of the burden that compliance with the order will impose: s 49E(5). If a corporation fails to carry out the orders made, the Commissioner for Occupational Health and Safety may do anything necessary or convenient to carry out any action that remains to be done under the order that it is still practicable to do, and to publicise the corporation's failure to comply with court orders: s 49E(7). The total cost to a corporation of compliance with orders under s 49E cannot exceed $5 million, including any fine imposed for the offence.
[204] Wright states that 'the strongest motivator identified by research is the fear that the adverse publicity, loss of confidence and regulatory attention subsequent to a serious incident will cause curtailment of operations, imposition of additional costs, loss of corporate credibility and loss of business/interruption of operations': M Wright, Factors Motivating Proactive Health and Safety Management (1998), 12, cited in N Gunningham, CEO and Supervisor Drivers: Review of Literature and Current Practice (1999), 17.
[205] Bill C-45, An Act to Amend the Criminal Code (criminal liability of organizations), s 18(2). Section 732.1(3.2) of the Criminal Code requires the court to consider whether another body would be more suitable to supervise the organisation, because, for example, the organization may already be subject to extensive regulation by government bodies: see A Plain Language Guide, Bill C-45, above n 152, 9.
[206] In New Zealand, a criminal court only has the power to award reparation for loss of or damage to property, emotional harm, or loss or damage consequential on any emotional or physical harm or loss of, or damage to, property: Sentencing Act 2002, s 32(1).
[207] See Clough, above n 193, 125-129.
[208] See Sentencing: Corporate Offenders, above n 201, 116.
[209] Clough, above n 193, 130. Clough also points out that in the context of smaller companies, there is little to be gained by deregistering the corporation unless some limitation is placed upon company officers to prevent them simply forming a new corporation.
[210] Woolf, above n 146.
[211] The English Government, in relation to the Corporate Manslaughter Bill, published a regulatory impact assessment of its proposed corporate killing offence: Home Office (UK), Corporate Manslaughter: A Regulatory Impact Assessment of the Government's Draft Bill(March 2005), Home Office (UK) <http://www.homeoffice.gov.uk/documents/2005-corporate-manslaughter/ria-corp-manslaughter-230305?view=Binary.html> at December 2005.
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