The expert group appointed to consider introducing a new statutory offence of
corporate culpable homicide in Scotland issued its report yesterday,
Thursday 17 November.

Corporate killing offence

As expected the group propose a new statutory offence of corporate
killing. This will apply to companies/organisations guilty of
recklessness which leads to death and will apply, so far as possible,
to all Crown bodies. It differs from the offence proposed for England
and Wales, in part because of the existing differences between the
crime of manslaughter in England and Wales and the crime of culpable
homicide in Scotland, but also because the expert group have some
criticisms of the English proposals. In particular they consider that
the English proposals may still require identification of a company's
'controlling mind' - the problem at the heart of all common law
prosecutions against large organisations - and, by concentrating on the
failures of "senior managers" the English proposals may have the effect
of encouraging companies to transfer certain management decisions to a
lower level in their corporate structures. For these reasons the
proposed Scottish offence has a different content from the offence in
the draft bill for England and Wales.

In addition, the group goes further than the draft bill and make
several proposals - albeit on a majority basis - recommending the
introduction of individual offences.

Individual offences

The draft bill for England and Wales proposes a corporate offence,
carrying an unlimited fine as the maximum penalty. In contrast, a
majority of the expert group in Scotland recommends introducing, in
addition to the new corporate killing offence, two individual offences.

The first offence will apply in circumstances where individuals are
directly responsible for death. The second is directed at senior
managers and directors whose acts/omissions directly contribute to a
death; this 'secondary' offence would only apply where there has been a
successful prosecution against the company/organisation for the new
statutory corporate killing offence.

Opposition to individual offences

The report makes it clear that there was opposition to the
introduction of the individual offences from both the business
representatives on the expert group and from the HSE representative.

The business community is concerned that a more stringent regime in
Scotland could inhibit new investment in Scotland, and inhibit
individuals from taking up senior management posts. The position taken
by HSE was that, in reality, most failings leading to death are
"organisational, not individual and therefore there is a danger that an
individual offence could lead to scapegoating of individuals within
organisations". The rest of the membership of the expert group did not
share these significant reservations. It is noticeable that they are
not directly responded to. The report notes simply that the majority
view of the group is that individual offences would " encourage
directors and managers to take health and safety more seriously and
therefore promote good management". With respect to the majority, that
does not address the issues raised either by business or HSE, which
will undoubtedly give rise to significant comment and debate.

Penalties

In line with the majority proposal that individual offences should
be enacted, custodial sentences are recommended in appropriate cases.
In addition, a range of innovative corporate penalties is discussed
(cash fines are the only option proposed for England and Wales). These
include

  • Equity fines - where a company is required to issue new shares,
    possibly to a share compensation fund with the value of shares equaling
    the cash fine. These are seen as more punitive than cash fines as they
    water down a company's value.
  • Corporate probation - where the court orders action in relation to
    organisational matters connected with the offence. This could include
    implementing a compliance programme enforced by a court appointed
    expert.
  • Community service orders - where a corporate offender is required to undertake a project that benefits the community.

Next steps?

At present, the Executive has confirmed that it will consider in
detail the legal and practical issues surrounding the recommendations
before indicating how it proposes to take matters forward.

We expect that a consultation process will be announced at some
point in the future. A new corporate homicide law will have significant
consequences both for business and organisations operating in the
public sector. Given the complexities of the law in this area, we would
welcome an opportunity to work with clients to ensure that any
proposals the Executive make following this report are examined
rigorously and reflect the views and concerns of both the private and
public sector. Please contact Natasha Durkin if you would like to be
kept updated on developments.

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