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Corporate criminality: four models of fault

Published online by Cambridge University Press:  02 January 2018

James Gobert
James Gobert*
Affiliation:
University of Essex
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Extract

‘Corporation - an ingenious device for obtaining individual profit without individual responsibility.’

(A Bierce The Devil’s Dictionary, 1958)

The problem of how to hold a company criminally accountable for the harm produced in the course of its business activity continues to vex the English judiciary. The attempt to apply conventional criminal law to companies has not been a resounding success. This was perhaps predictable, as the relevant rules and doctrines had been developed in cases involving human defendants. Their transposition to an inanimate organizational entity such as a company was never going to be easy. Not only did the judges fail to rise to the challenge, however, they managed to construe the relevant law in a regressive manner that has all but insulated large companies from criminal liability.

Type
Research Article
Information
Legal Studies , Volume 14 , Issue 3 , November 1994 , pp. 393 - 410
Copyright
Copyright © Society of Legal Scholars 1994

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References

2. The topic has attracted significant attention in recent years. Among the rich academic literature, see C Wells Corporations and Criminuf Responsibility (1993); D Bergman ‘Deaths at Work: Accidents or Corporate Crime’ (1991); J Braithwaite Corporate Crime in the Pharmaceutical Industry (1984); L Leigh The Criminal Liability of Corporations in English Law (1969); Fisse ‘The Attribution of Criminal Liability to Corporations: A Statutory Model’ [1991] Sydney LR 277; Fisse and Braithwaite ‘The Allocation of Responsibility for Corporate Crime: Individualism, Collectivism and Accountability’ [1988] Sydney L R 468; Note ‘Developments in the Law - Corporate Crime: Regulating Corporate Behavior Through Criminal Sanctions’ (1979) 92 Harv LR 1227.

3. Slapper. for example, reports that since 1969 there have been 18,151 persons killed at work without a single conviction of a company for an offence of homicide. Slapper ‘Corporate Manslaughter: An Examination of the Determinants of Prosecutorial Policy’ [1993] Social and Legal Studies 423,425.

4. See Health and Safety at Work Act 1974.

5. See generally Reiss ‘Selecting Strategies of Social Control over Organisational Life’ in Enforcing Regulation (K Hawkins & J Thomas eds 1984). See generally G Rhodes, Inspectorates in British Government (1981).

6. Criminal Justice Act 1991, s 17(2)(c).

7. Slapper ‘Corporate Manslaughter: An Examination of the Determinants of Rosecutorial Policy’ [1993] Social and Legal Studies 423,429–30.

8. See Bergman ‘Corporate Sanctions and Corporate Probation’ (1992) NLJ 1312.

9. In a subsequent article I attempt to address what form criminal liability might take. See Gobert ‘Corporate Criminality: New Crimes for the Times’ [1994] Crim LR 722.

10. See below n 26.

11. See below notes 17–22 and accompanying text.

12. See below notes 32–36 and accompanying text.

13. See below notes 43–58 and accompanying text.

14. (1989) 88 Cr App R 10.

15. See below notes 60–68 and accompanying text.

16. See Lloyd & Grace, Smith & Co [1912] AC 716.

17. See, eg Mouse11 Bros v London and Northwestern Ry [1917] 2 K B 836.

18. This phenomenon could also be perceived in civil cases where courts invoked technical doctrines such as privity of contract to limit the scope of the company' s liability. See, eg Winterbottom v Wright (1842) 10 Meeson & Welsby 109.

19. [1994] 2 All ER 99.

20. Ibid at 104.

21. Ibid.

22. Ibid at 105.

23. Ibid at 104.

24. See Gobert'Corporate Criminality: New Crimes for the Times' [1994] Crim L R 722.

25. See Leigh ‘The Criminal Liability of Corporations and Other Groups’ (1977) 9 Ottawa LRev 247, 275.

26. See United States v Bank of New England, 821 F2d 844 (1 st Cir) cert denied 484 US 943 (1987); United States v Hilton Hotels Cop, 467 F2d lo00 (9th Cir 1972) cert denied 409 US 1125 (1973); Egan v. United States, 137 F2d 368 (8th Cir) cert denied 320 US 788 (1943); NY Central & HRRR v US, 212 US 481 (1909); Continental Baking Co v US, 281 Fed 137 (6th Cir 1960); Steere Tank Lines Inc v United Stares, 330 F2d 719 (5th Cir 1963). See generally ‘Developments in the Law’, above n 2.

27. See Standard Oil Co v United States 307 F 2d 120 (5th Cir 1962).

28. See Gobert ‘Corporate Criminality: New Crimes for the Times’ [1994] Crim LR 722.

29. See Allen v Whitehead [1930] 1 KB 211. But see Vane v Yiannopoullos [1965] AC 486 (delegation must be complete).

30. The Times, 3 February 1994.

31. [1972] AC 824.

32. [1971] 2 All ER 127.

33. [1944] 2 All ER 515.

34. Ibid at 516–17.

35. The ‘hands-brains’ analogy was explained by Lord Denning in HL Bolton (Engineering) Co Ltd v TJ Graham & Sons Ltd [1957] 1 QB 159,172: ‘A company may in many ways be likened to a human body. It has a brain and a nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company and control what it does.’

36. Investigation into the Clapham Junction Railway Accident (Cmnd. 820 HMSO 1989).

37. See Field & Jorg ‘Corporate Liability and Manslaughter: Should we be Going Dutch’ [1991] Crim L R 156 169 (‘While the company formally forbade the faulty wiring practices of its technician, the climate it generated led inexorably towards them.’).

38. See C Wells Corporations and Criminal Responsibility (1993) pp 57–59. The company was, however, prosecuted for failing to ensure the safety of its employees and passengers, and pleaded guilty to the charge. It received a fine of £250,000. The Guardian, 15 June 1991.

39. [1983] 2 AC 161.

40. [1977] 1 QB 354.

41. A thorough analysis of gross negligence manslaughter can be found in R v Prentice [1993] 3 WLR 927 and in R v Adomako [1994] 3 All ER 79.

42. See Railway Employment (Prevention of Accidents) Act 1900; Regulations of Railways Act 1871. The violation of such statutes could in theory give rise to a prosecution for unlawful act manslaughter. See R v Church [1966] 1 QB 59. However, under the Andrews doctrine (Andrews v DPP [1937] AC 576) the company might escape liability by arguing that it was simply doing a lawful act in a negligent manner rather than a truly unlawful act.

43. 821 F2d 844 (1st Cir) cert denied 484 US 943 (1987).

44. 821 F2d at 855.

45. (1989)88 Cr App R10.

46. Ibid at 16–17.

47. Another possibility, which will not be pursued, is that of liability under the unlawful act head of manslaughter. This avenue of liability may not be that promising because of the Andrews doctrine. See above n 42. In its recent consultation paper on involuntary manslaughter, the Law Commission recommends the abolition of this category of manslaughter. See Criminal Law: Involuntary Manslaughter: A Consultation Paper (Law Com Paper no 135 (HMSO 1994) discussed in McColgan ‘The Law Commission Consultation Document on Involuntary Manslaughter - Heralding Corporate liability’ [1994] Crim L R 547.

48. R v Cunningham [1957] 2 All ER 412.

49. R v Caldwell [1981] 1 All ER 961.

50. R v Adomako [1994] 3 All ER 79.; R v Prentice [1993] 3 WLR 927.

51. See Armstrong v Strain [1952] 1 KB 232, 246.

52. See generally Coffee ‘Beyond the Shut-Eyed Sentry: Toward a Theoretical View of Corporate Misconduct and the Effective Legal Response’ (1977) 63 Virginia Law Review 1099.

53. See Bergman, ‘Recklessness in the Boardroom’ (1990) NLJ 1496.

54. See generally, Sheen Report MV Herald of Free Enterprise: Report of the Court No 8074, Dept of Transport (HMSO, 1987)

55. The Sheen Report specifically recognised a shared responsibility for the resulting deaths, part of which consisted of the failure of the Board of Directors to appreciate the dangers involved. See para 14.1

56. See Yugotours Ltd v Wadsley [1988] Crim LR 623.

57. See Roper v Taylor's Central Garages (Exeter), Ltd 1951] 2 TLR 284.

58. [1993] 1 WLR 1037.

59. I am indebted to my colleague, Sheldon Leader, who suggested this useful analogy tome.

60. See R Dworkin Law's Empire (1986) at 314 etc.

61. See P French Collective and Corporate Responsibility (1984).

62. French refers to these as the Corporate Internal Decision (CID) Structure. hid ch 4.

63. Criminal Law: Involuntary Manslaughter: A Consultation Paper. (Law Corn Paper no135, HMSO 1994).

64. Ibid at 123, para 5.57.

65. Ibid at 127, para 5.73.

66. Ibid at 129–30, paras 5.77. 580 (emphasis added).

67. The liability, however, should perhaps not be for the substantive offence that has occurred as a result of the employee's acts, but for the failure to prevent the offence from occumng. This theme is developed in Gobert ‘Corporate Criminality: New Crimes for the Times’ [1994] Crim LR 722.