Bringing the bosses to book

As the Ladbroke Grove rail inquiry opens, pressure is mounting for changes in the law that would make it easier to prosecute the companies involved in disasters
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The Independent Online

When the public hearings of the Ladbroke Grove rail inquiry begin tomorrow, no witnesses will be scrutinised more closely than the directors of Thames Trains and First Great Western. Lawyers acting for the relatives of the 31 killed in the crash have said they want manslaughter charges brought against these companies. But as the law stands, the companies can be found guilty only if their directors or managers are also convicted.

High-profile failures to prosecute after the rail crash at Southall, in which seven died, and the Zeebrugge ferry disaster, which killed 192, have meant a loss of faith in the law of corporate manslaughter.

Now pressure is mounting to bring negligent companies and their directors into the dock.

Frances McCarthy, chair of the Association of Personal Injury Lawyers (APIL) - which is lobbying for changes to the law - says: "Our clients keep asking us why the company people are getting off without being punished. We get very upset when there's obviously been a complete failure and the company just gets away with it. And we are constantly faced with the same companies doing the same things."

It is certainly striking that trains owned by First Great Western, formerly Great Western Trains, were involved in both the Southall and the Ladbroke Grove disasters. Following Southall, the company was fined £1.5m for breaches of health and safety regulations. However, the Great Western Trains director responsible for safety was never prosecuted and is now a director of the First group, a bus operator.

Bringing criminal charges against directors is difficult. Over the past 10 years - during which time there have been more than 3,000 deaths at work - only six directors have been convicted for manslaughter following a work-related death, and only two have served a prison sentence.

After more than a decade of disasters - including the King's Cross fire, which killed 31 people, and the Clapham rail crash, which killed 35 - there is now a strong belief within the Cabinet that directors should be made more accountable for failures in management systems. The Home Secretary, Jack Straw, the Deputy Prime Minister, John Prescott, and the Attorney General, Lord Williams of Mostyn, are all believed to support the principle that directors of incompetently managed companies ought to be subject to disqualification or even imprisonment.

Next month, the Home Office will publish its long-awaited consultation paper on changes to the law of corporate manslaughter. It is expected to endorse many of the Law Commission's 1996 proposals on the subject. These include the creation of a new offence of corporate killing, which would allow companies to be convicted even if no individual within them is guilty.

Corporate manslaughter prosecutions collapsed after Southall and Zeebrugge because no individual within the company could be convicted of manslaughter, despite the fact that a judicial inquiry into Zeebrugge found that "the body corporate was infected with the disease of sloppiness". These failures highlighted the fact that companies escape prosecution because of complex structures that make it difficult to pinpoint responsibility.

Last month, calling for changes to the "absurd" law of manslaughter, Labour MP and APIL member Andrew Dismore told the Commons: "Corporate guilt rests entirely on proof of the individual guilt of a senior company officer. However reckless or grossly negligent the company as a whole may have been, it will escape conviction... The law is thus biased against small companies, in which it is easier to identify the individual director who is to blame. Large companies escape."

Under the proposed new offence of corporate killing, a company would be found guilty if a management failure alone caused a death. New penalties could also require a company to put right failings in its systems and fine it up to £20,000 if did not do so.

The Government believes that these measures do not go far enough. It wants to see directors hit as well as the companies. One government source said: "Even if you fine companies £10m, they're going to call that insurance and write it off the profits. There's a strong view that directors ought to be liable to go to prison."

The forthcoming consultation paper is believed to propose that if a company is found guilty of corporate killing, directors could be disqualified from acting in a management role in any company. Mr Dismore says: "The issue of public safety is never at the top of the agenda for directors. If the chief executive is personally liable, it will concentrate minds."

The City is apprehensive about the suggestion of prison sentences. The Institute of Directors' head of policy, Ruth Lea, says: "It would be unfair to send individual directors to prison simply because there is a corporate culture of slovenliness. If the director knows something's going badly wrong, the full force of the law should be used against them. But if they genuinely don't know, they are not responsible as an individual."

The head of environmental affairs at the Confederation of British Industry, Janet Asherson, also stressed that "the legislation should identify a director who had both responsibility and authority. You can't just set up any director and expect them to have total authority, because companies don't work like that."

Ms Asherson believes that the current law provides adequate protection. In addition to the manslaughter provisions, breaches of the health and safety laws are criminal offences that can result in unlimited fines for companies and imprisonment for directors, if the corporate offence is due to their neglect or consent. However, the executive director of the Centre for Corporate Accountability, David Bergman, points out that "under the current health and safety regulations the key offence is against the company as an employer. Directors have no legally imposed safety duties."

There have recently been indications that the existing corporate manslaughter laws may be more powerful than previously realised. Last month, the High Court found that the Crown Prosecution Service (CPS) had applied the wrong test for manslaughter [R v the DPP and others, ex parte Timothy Jones]. Mr Bergman says: "The case opened the possibility that the CPS has been misapplying the law in many workplace deaths and failing to prosecute the directors of companies when they could have done so."

Any suggestion that the current law is strong enough will be welcomed by the injured parties in the Ladbroke Grove inquiry, currently awaiting the result of the police investigation into the crash, because any criminal charges that emerge will be brought under the old law. Government moves to legislate will not come soon enough for the families of those who have already died.