Corporate chiefs must face music

HOW far can companies and their managers be held responsible for tragedies where customers or workers lose their lives? The issue has been hotly debated following the recent decision by the Crown Prosecution Service to prosecute over the Hatfield disaster, where four people died and 70 were injured.

Six rail managers have been charged with manslaughter. Two large companies - Network Rail and maintenance firm Balfour Beatty - have been charged with corporate manslaughter over the disaster in October 2000.

In the five years since 1998, when police established new procedures for investigating work-related deaths, more companies have been prosecuted for manslaughter than in the previous 50 years.

At the moment, a company can only be prosecuted if a director or senior manager has been individually charged with the offence. The rise in charges of corporate manslaughter has gone hand-in-hand with an increase in the prosecution of senior company officers.

But almost all the companies prosecuted - and all the five companies convicted - were small. Only two large corporations have ever been prosecuted: P&O European Ferries over the Zeebrugge disaster, which killed 192 people in 1987; and Great Western Railways over the Southall disaster, which killed seven people in 1997. Both of these cases collapsed before a jury was required to give a verdict.

In informed legal circles, many people had come to believe that large companies could never successfully be prosecuted for manslaughter. The main barrier is that, in big corporations, managerial responsibilities are shared and delegated to juniors.

That makes it difficult to identify individual senior managers whose conduct could be deemed to be grossly negligent and a significant cause of a death, and therefore charged with manslaughter. The fact that the law does not impose any positive health and safety duties upon company directors also helped businesses to avoid the courts.

Against this background, the recent decision by the Crown Prosecution Service to prosecute Balfour Beatty and Network Rail is highly significant. It shatters the perception that senior bosses of large firms are above the law.

Prosecutions over the Hatfield disaster will not change the existing scenario overnight, and whether it will have any long-term impact is difficult to predict. It will depend, in part, on whether the evidence the CPS brings to court is exceptional. If so, it may be seen as a one-off, even if it is successful.

How does this prosecution affect the arguments for legal reform? The Government has committed itself to enacting a new offence of 'corporate killing', an offence first proposed by the Law Commission in 1996. That would make it easier to prosecute companies for a homicide offence without the need to prosecute a director or senior manager.

Our organisation provides free and independent advice to families bereaved through corporate activities. A number of our clients understandably feel it is wholly unjust that companies which caused the death of their relatives are getting away with pleading guilty to a regulatory offence when a more serious charge would be appropriate.

Under the current law, companies can escape criminal accountability even if there have been gross and systemic management failures, so long as no individual director or senior manager has alone acted with gross negligence. The exception is where there has been a breach of health and safety law.

This brings the criminal justice system into disrepute in the eyes of bereaved families, and is a strong argument for reform.

David Bergman is the Director of the Centre for Corporate Accountability (www.corporateaccount.org) - an advice and research organisation concerned with worker and public safety.