Kicking Corporate Bodies and Damning Their Souls

Author(s): C. M. V. Clarkson
Source: The Modern Law Review , Jul., 1996, Vol. 59, No. 4 (Jul., 1996), pp. 557-572
Published by: Wiley on behalf of the Modern Law Review

Stable URL: https://www.jstor.org/stable/1097227

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 Kicking Corporate Bodies and Damning Their Souls
C.M.V. Clarkson*

In the fierce controversy over corporate criminal liability, one phrase rin
through the literature: a company has 'no soul to be damned and no body to be
kicked.'" Less often quoted are the words that preceded these: 'Did you eve
expect a corporation to have a conscience?' and the ones that allegedly followed
them: 'by God, it ought to have both.'2 The argument in this article is that, for t
purposes of the criminal law, modem companies can be regarded (at least
metaphorically) as having both bodies and souls that, through the censure a
stigma of punishment,3 can be both kicked and damned in the hope of inculcatin
a corporate conscience.

The context

Interest in this subject is the result of two sets of developments. First, there h
been a series of highly publicised 'disasters' in which large numbers of persons
have been killed. In 1988 there was the Piper Alpha oil rig explosion in whic
167 people were killed, with the alleged cause being 'mundane design faults
human error and unsafe working conditions.'4 In 1987 there was the King's Cro
fire in which 31 people died, the cause being the failure of the various groups
and individuals within the overall corporate structure to identify their respectiv
areas of responsibility.s Most infamously, in 1987 there was the Zeebrugg
'disaster' in which the ferry, Herald of Free Enterprise, capsized killing 19
people. The official enquiry found that 'from top to bottom the body corporate
was infected with the disease of sloppiness ... The failure on the part of th

*Professor of Law, University of Leicester.

1 Edward, First Baron Thurlow. The quote was given wide publicity by Coffee's influential articl
"'No Soul to Damn: No Body to Kick": An Unscandalized Inquiry into the Problem of Corporate
Punishment' (1981) 79 Michigan L Rev 386.
2 ibid.
3 The wide range of possible punishments other than the fine that could be imposed on comp
not be considered in this article. For penalties such as equity fines, corporate probation
dissolution, see Coffee, ibid. Other radical alternatives could include incarceration
temporary nationalisation and the appointment of public directors (Box, Crime and My
(London: Tavistock, 1983) p 72) or incarceration through 'quarantine,' whereby companie
forbidden to engage in certain activities or barred from specific areas (Meister, 'Criminal
for Corporations that Kill' (1989-90) 64 Tulane L Rev 919, 946). See also the proposals in
Braithwaite, 'The Allocation of Responsibility for Corporate Crime: Individualism, Collectiv
Accountability' (1988) 11 Sydney L Rev 468.
4 The Cullen Report, Public Inquiry into the Piper Alpha Disaster (London: HMSO, 1990) C
found that the cause of the disaster was a breakdown in communications between the da
night shifts. The day shift had removed a pressure safety valve from an injection pump; t
shift were not told of this. Occidental had previously received specific warnings about p
dangerous breakdowns in communications. There had been a similar breach of safety th
year which had caused the death of one employee.
5 Fennell Report, Investigation into the King's Cross Underground Fire (London: HMSO,
499.

C The Modern Law Review Limited 1996 (MLR 59:4, July). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 IJF and 238 Main Street, Cambridge, MA 02142, USA. 557

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 The Modem Law Review [Vol. 59

shore management to give proper

the disaster.'6
Secondly, there has been an increased awareness of the numbers of persons
annually being killed and seriously injured in their places of work. In the last 10
years, some 5,774 people have been killed at work.7 In 1993/94 there were 379
people killed in workplace incidents. In the same year, 28,924 persons sustained
serious injuries at their workplace.8 These deaths and injuries were the result of
violent incidents - people being 'crushed, electrocuted, asphyxiated, burnt,
drowned, impaled and so forth.'9 These figures merely represent reported cases. It
has been estimated that only one-sixth of 'accidents' at work are reported to the
authorities.'0 In addition, it is calculated that some 10,000 workers die annually
from the effects of industrial disease."

The practice

From this gruesome litany of deaths and injuries, the reasonable observer might
have expected the criminal justice system to have been active in trying to combat
such corporate violence. When a doctor, for instance, kills through gross
negligence, a prosecution for manslaughter can, and sometimes does, follow.12
When companies kill and injure, however, the practice is different. Only one
company has ever been convicted of manslaughter'13 and prosecutions for other
serious offences are virtually unknown.
There are two main reasons for this. The first relates to enforcement procedures
and public attitudes moulded by the media, the state and companies themselves.
When persons are killed or seriously injured at work (even when they are not
employees), the typical response is to describe this as an 'accident' - which in
turn structures the official response. In an attempt to increase safety at work and
prevent such 'accidents,' the Health and Safety at Work Act 1974 makes it an
offence for an employer to breach a duty 'to ensure, so far as is reasonably
practicable, the health, safety and welfare at work of all his employees.' 14 This and

6 Department of Transport, The Merchant Shipping Act 1894, my Herald of Free Enterprise, Report of
Court No 8074 (Sheen Report) (London: HMSO, 1987), at para 14.1. Other 'disasters' that have
contributed to the growing clamour for corporate accountability have included the Clapham Junction
rail disaster in 1988, where faulty signalling caused the death of 35 people, the Purley train crash in
1989, where five people were killed and there were strong claims that British Rail management
shortcomings had contributed to the crash, and the sinking of the Marchioness pleasure cruiser on the
Thames in 1989, with 51 people being killed in circumstances that resulted in an unsuccessful private
prosecution for manslaughter against four managers of the company that owned the dredger that
collided with the Marchioness.
7 This figure reflects the number of reported deaths to employees, the self-employed and members of
the public from workplace incidents from 1983 to 1992/93 (Health and Safety Commission, Annual
Report 1992/93 (London: HMSO, 1993) p96). This is only slightly fewer than the number of
homicides (6,606 for murder, manslaughter and infanticide) recorded over the same period (Criminal
Statistics England and Wales (London: HMSO, 1993) Cm 2680). The numbers killed at work have
gradually been decreasing over the past decade.
8 Health and Safety Commission, Annual Report 1993/94 (London: HMSO, 1994). In comparison,
16,526 persons were the victims of reported 'major non-fatal' attacks (Criminal Statistics, ibid).
9 Slapper, 'Corporate Manslaughter: An Examination of the Determinants of Prosecutorial Policy'
[1993] SLS 423, 427.
10 Health and Safety at Work, April 1992, p 8.
11 Bergman, Deaths at Work: Accidents or Corporate Crime (London: WEA, 1991) p3.
12 Adomako (1994) 99 Cr App R 362.
13 Kite and Others, The Independent, 9 December 1994.
14 s 2(1).

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July 1996] Kicking Corporate Bodies and Damning Their Souls

other similar offences under the Act are drafted without any reference to whether
worker is killed or injured or not. The crime is simply the failure to maintain
proper safety standards. This stands in strong contrast to the available offenc
when persons are killed or injured outside their workplaces, which are structured
terms of the seriousness of the harm caused. This is true not only in cases
personal violence, but also under the Road Traffic Act 1988. The differe
structure of the health and safety offences contributes to the overall sense th
death and injury at work is not 'real crime.' "5
The main body set up to enforce this legislation is the Health and Safet
Executive (HSE), which has the power to notify companies that certain saf
matters require attention, or to bring a criminal prosecution. The result is th
when someone is killed or seriously injured at work it is extremely rare for t
police to conduct an investigation into the incident.'6 Instead, the usual practi
after a death or serious injury at work is for an investigation to be conducted b
the HSE. However, the HSE does not regard its primary function as being one
initiating prosecutions, but rather as one of 'assisting and advising the generali
of well-conducted companies, and of determining good practice.'17 The HSE, a
under-manned18 and under-resourced, will only press charges in cases tha
believes represent a flagrant breach of the 1974 Act, with the result that only
per cent of workplace deaths lead to companies being prosecuted by the agency.
In 1993/94, for example, the HSE commenced 1,793 prosecutions yet, in contras
issued 10,523 notices (improvement notices, which constituted 61.5 per cent of
notices, immediate prohibition notices and deferred prohibition notices).20 W
it can be argued that there are distinct advantages in issuing notices rather th
initiating prosecutions when dealing with strict liability offences,21 the same
claim can hardly be made when corporate wrongdoing has caused the death
serious injury of workers. When a prosecution is brought, it tends to be in th
magistrates' court (60 per cent), as this is quicker and cheaper for the HSE
Until 1992 the maximum fine there was ?2,000 (now raised to ?5,000 for
offences23 and to ?20,000 for breaches of sections 2-6 of the 1974 Act24). The
average fine in all courts in 1993/94 was ?3,061.25 Despite the fact that this fig

15 For this reason, the proposal in Gobert, 'Corporate Criminality: New Crimes for the Times' [1
CLR 722, must be rejected. He argues that the focus in corporate offences should be on the creati
of risks likely to lead to serious harm and that structuring offences in terms of results 'mak
conviction subject to the fortuity of consequences' (at p 729).
16 Neither the Home Office nor the HSE keep statistics on this, but Bergman's research revealed
between 1989 and 1991, out of a total of 1,016 deaths at work, there was only a criminal pol
investigation in one case (op cit n 11, at p 17).
17 Health and Safety Executive, Annual Report 1988/89 (London: HMSO, 1989). See generally
Baldwin, Rules and Government (Oxford: Clarendon Press, 1995) pp 125-192.
18 The HSE suffered bad cuts in their numbers of inspectors in the 1980s (Baldwin, ibid p 172).
19 Bergman, op cit n l1, at p 17.
20 Health and Safety Commission, op cit n 8, at p 129.
21 Leigh, Strict and Vicarious Liability (London: Sweet & Maxwell, 1982) pp 84-100.
22 Hutter and LLoyd-Bostock, 'The Power of Accidents' (1990) 30 Brit J Criminol 409: 'an inspec
working on a prosecution or on a public inquiry is not out making visits to other premises' (p421
Preparing and presenting a prosecution takes inspectors an average of three person-days eac
(Baldwin, op cit n 17, at p 146). It has been estimated that the P&O manslaughter prosecution in t
Crown Court cost some ?10 million (Bergman, 'Recklessness in the Boardroom' (1990) 140 NL
1496).
23 Magistrates' Courts Act 1980, s32(9), as amended by the Criminal Justice Act 1991, s 17(2)(c).
24 Offshore Safety Act 1992, s4(2).
25 Health and Safety Commission, op cit n 8.

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 The Modern Law Review [Vol. 59

has been steadily increasing,26 the

still apposite: 'the law was specify
than people.'27 This displacement
HSE simply marginalises corpora
where there is a prosecution, to t
are not really 'crime' or the produ
This marginalisation of corporate
at inquests into workplace deaths w
automatic.28 Bereaved families have
are represented, often financed by
interested in civil compensation
responsibility for safety are seldo
simply legitimate the current role
reinforce public conceptions that
The second reason for the lack of
the difficulty of obtaining a conv
was developed as a mechanism f
Individuals can be held responsi
punishment can be used to mark t
when dealing with crimes involv
responsibility do not naturally enc
applied by humanising companie
phorically, into their underlyin
individual within the company wh
the appropriate mens rea. This ind
corporate structure to be said to re
and for his or her acts to be ident
stances, the company could be dire
This 'identification doctrine' became the established and main route to the
imposition
33
of corporate criminal liability, at least for crimes involving proof
mens rea.

This approach of 'humanising companies' might be app

managed companies where it is not too difficult to pinpo
whom the company can be identified. Indeed, the

26 In 1990/91 the average fine imposed following an HSE prosecution

stressed that these overall averages are being pushed up by a few en
individual cases - for example, in 1993 a fine of ?200,000 was im
Consortium TML after the death of a worker crushed between tw
Punishment' (1994) 144 NLJ 29). It would seem that the amount o
majority of cases has not risen to any marked extent.
27 (1991) 187 Health and Safety Information Bulletin 21, in (1991) 49
Report. The average fine imposed on a company in all cases (both Cr
1991-92 after conviction in cases where death resulted was ?994 (H
Annual Report 1991/92 (London: HMSO, 1992)).
28 Bergman, op cit n 11, at p 40.
29 ibid at p43.
30 Slapper, op cit n 9, at p 433.
31 Wells, Corporations and Criminal Responsibility (Oxford: Clarend
32 As Denning LJ put it famously in HL Bolton (Engineering) Co Ltd
1 QB 159, 172: 'A company may in many ways be likened to a human
centre which controls what it does. It also has hands which hold the t
directions from the centre.' A company can only be identified with
corporate structure as to represent the 'brains' of the company as op
33 Tesco Supermarkets Limited v Nattrass [1972] AC 153.

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July 1996] Kicking Corporate Bodies and Damning Their Souls

manslaughter conviction was against just such a company. In Kite and O

following the death of four teenagers during a canoeing trip in Lyme Bay
company, OLL Ltd, that organised the canoeing trip and its managing d
Kite, were convicted of manslaughter. As the trial judge, Ognall J, put it
and the company, OLL, of which he is managing director, stand or fall
One for all and all for one.'35 There were further distinctive features in
facilitating the conviction. First, the risks involved were clearly ob
serious, and could be so perceived by anyone; no technical expertise was n
to understand just how dangerous the activities were. Indeed, the compa
received written warnings from former instructors in 'chillingly clear terms'
fatalities could result unless safety was improved at the centre. Second, t
Centre industry at that time was not subject to inspection by the HSE.37 T
that blame could not be deflected to the agency and, further, helped to en
the ensuing prosecution was for manslaughter rather than an offence u
Health and Safety legislation.
However, there are major problems with this identification doctrine38
the past decade there has been a growing realisation that it simply does n
modem corporate practice, particularly in larger companies.39 The doctri
the reality of modem corporate decision-making which is often the pro
corporate policies and procedures rather than individual decisions. In
case (which resulted from the capsize of the Herald of Free Enterpr
instance, it was uncertain who within the company was responsible for
one were to try to pinpoint the human causers of the deaths in that case,
have to list the assistant bosun who failed to close the bow doors; the bos
failed to supervise and check on the assistant bosun; the captain who set
maximum speed in an overcrowded boat without checking with anyone
doors had been closed; and, finally, the directors of Townsend Car Fe
(taken over by P&O) who had been told of previous open-door incidents
taken no action. On facts such as these, it is hardly surprising that at the end
prosecution case the trial judge, Turner J, directed acquittals against P&O
five most senior employees.40 It could not be proved that the risks of o
sailing were obvious to any of the senior managers; accordingly, no mens
be attributed to the company.
As a result of the intense publicity attracted by the above cases, the t
seem to be turning. More prosecutions (relatively) are being broug

34 op cit n 13.
35 Cited in Smith and Smith, 'The Company Behind Bars,' Health and Safety at Work, Feb
p 10.
36 Health and Safety at Work, January 1995, p4.
37 There are now proposals for all adventure centres for under-18s to be licensed. See Health and Safety
at Work, November 1995, p 5.
38 At an interpretive level there is the inevitable quandry whether relatively senior persons within a
company can be said to represent the 'brains' of the company, especially in cases where duties have
been delegated. Compare, for instance, Boal [1992] BCLC 872 with Bolton (Engineering) Co v T.J.
Graham & Sons [1957] QB 159, a decision approved in Tesco v Nattrass (n 33 above).
39 While there are no official statistics, the Government estimates that around 90 per cent of all
companies are 'small' (1985) Cmnd 9749, para 8.5. See generally Freedman, 'Small Businesses and
the Corporate Form: Burden or Privilege' (1994) 57 MLR 555, 567. However, the definition of
'small' under s 249(3) of the Companies Act 1985 means that fairly sizeable companies can be
classed as 'small.'
40 R v Alcindor and Others (Central Criminal Court, 19 October 1990). See Bergman, op cit
Buries, 'The Criminal Liability of Corporations' (1991) 141 NLJ 609.

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 The Modern Law Review [Vol. 59

manslaughter.41 Greater fines ar

legislation.42 Nonetheless, the cen
held criminally responsible and, if

Corporate or personal liabi

The first question is whether an

opposed to convicting and punishi
would argue that it is the individua
deterrence and that in order to det
A company will only be deterred i
There is a further problem here wi
apprehension is so low that no pen
with corporate homicide, where
England, it might well be that even
as a deterrent. In terms of incapa
individuals who are the ones who s
made to improve their work pract
company by way of a fine amou
creditors, employees who might
ultimately have to bear the burden
suffer will be those whom the law
Such arguments, however, miss t
culpable, then it is the company th
dealing with individuals, nobody w
the culpable agent should be prosecuted on consequentialist grounds. If
blameworthy individuals within the company can be pinpointed, one might well
wish to prosecute them additionally. However, prosecution of such individuals
alone might be pointless and inappropriate as it ignores the corporate pressures that
might have been placed upon them by the corporate structure. One might simply be
punishing the 'vice-president responsible for going to jail,'45 and the institutional
practices and pressures will continue after the sacrifice. Even with small close-held
companies there is a strong case for criminal liability and removing any illegal
profits, as in such companies the directors will usually be shareholders and so will
be penalised by a loss of profit,46 and encouraged to correct the practices that led to
the wrongdoing.
If it is the company that is to be blamed for the harm caused, it is the company
that deserves the stigma and shaming associated with the adverse publicity
attached to a criminal conviction.47 It is a telling fact that the relatives of the
41 See, for example, the manslaughter prosecution commenced against Jackson Transport (Ossett) Ltd
after the death of an employee who died while cleaning a road tanker vehicle which contained
chemical residues (Health and Safety at Work, August 1995, p4). In Hong Kong recently, a company
was convicted of corporate manslaughter for the first time after pleading guilty (Health and Safety at
Work, July 1995, p5).
42 op cit n 26.
43 Coffee, op cit n 1, at p 389, drawing on the work of Posner, Economic Analysis of Law (Boston: Little
Brown & Co, 2nd ed, 1977), at p 167. See also Baldwin, op cit n 17, at pp 134-135.
44 Coffee, ibid at p 390.
45 Braithwaite, Corporate Crime in the Pharmaceutical Industry (London: Routledge, 1984) p 308.
46 Cartwright, 'Defendants in Consumer Protection Statutes: A Search for Consistency' (1996) 59 MLR
225, 235.
47 The names of individual directors will usually mean nothing to the public.

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July 1996] Kicking Corporate Bodies and Damning Their Souls

victims who died on the Herald of Free Enterprise were primarily inte
prosecution of P&O and not of the individuals.48 Even the prosecution s
similar mind when it dropped the charges against the two most i
'causers' of the sinking as soon as the judge had directed acquittals again
and its senior executives. Perhaps there was a realisation that the assist
should never have been left in a position where the entire safety of the ferry
passengers depended on him without any adequate system of checks or
The true fault lay with the company. Further, in many cases there will be
individual responsible for the particular policies and procedures that lea
resultant harm. Many large corporations have complex structures which
difficult for outsiders to ascertain who is responsible for a particular d
Punishing the company can trigger the most appropriate institutional re
that the company is in the best position to identify and discipline its e
Only in this way can one hope for a positive corporate response of imple
of appropriate safety procedures.
With regard to the argument that punishing companies amounts to puni
innocent shareholders and creates risks of redundancies, it must be born
that such persons are not themselves subject to the stigma of convi
criminal punishment. Those who take the benefits should also sho
burdens. A company should not be permitted to 'cut corners in its desire
profits for its shareholders, and in particular it must not cut overhead co
expense of safety.'49 Not to punish a company at fault is to allow corpor
accumulate and distribute to associates a pool of resources which does not reflect
cost of production. Justice as fairness requires, as a minimum, that the cost of
offences be internalised by the enterprise.50

Direct or vicarious liability?

The next question for consideration is how companies should be held cr

responsible. The flaws in the identification doctrine have already been ex
alternative device courts have recently started employing to circumvent t
of the identification doctrine has been that of vicarious liability. For ins
National Rivers Authority v Alfred McAlpine Homes East,51 two emplo
company, the site manager and the site agent, accepted responsibility for
wet cement to enter controlled waters contrary to section 85(1) of t
Resources Act 1991. At their trial the company was acquitted on the basis
could not be directly liable under the identification doctrine of Tesco v
However, on appeal by way of case stated, the Divisional Court ap
doctrine of vicarious liability. Looking at the purpose of pollution legisla
bearing in mind it was dealing with a strict liability offence, it held tha
way of enforcing such laws, where the pollution will often be caused by p

48 Wells, 'Manslaughter and Corporate Crime' (1989) 139 NLJ 931.

49 Law Com No 237, Legislating the Criminal Code: Involuntary Manslaughter (Lond
1995) para 7.24.
50 Fisse and Braithwaite, op cit n 3, at p 508. It has further been argued that concerned shar
seek to have safety systems implemented or sell their shares if the measures are not imp
(Colvin, 'Corporate Personality and Criminal Liability' (1995) 6 Criminal Law For
However, it seems unlikely that most shareholders, other than those with substantial sta
company, would be aware of the absence of such safety systems.
51 [1994] CLR 760.

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 The Modern Law Review [Vol. 59

low position in the corporate hiera

company.
In this context, Wells suggests that 'the general understanding is that ...
vicarious liability ... applies to strict liability offences and ... direct (liability) to
offences requiring a mental element.'52 This approach has found support. In R v
British Steel plc,53 the Court of Appeal, having decided that section 3(1) of the
Health and Safety at Work Act 1974 was an offence of strict liability, concluded,
or rather assumed, that the identification doctrine could not apply:
If... (an offence were one of) absolute criminal liability, it would drive a juggernaut through
the legislative scheme if corporate employers could avoid criminal liability where the

potentiallynharmful
company. event is committed by someone who is not the directing mind of the
The position is, however, not that straightforward. First, the doctrine of vicarious
liability has now been applied beyond the confines of strict liability offences to
offences of negligence or hybrid offences (ie prima facie strict liability offences
which provide due diligence or reasonable knowledge defences such as are
common in consumer protection legislation).55 Further, it has been argued that the
doctrine was applied in Re Supply of Ready Mixed Concrete (No 2)56 to the crime
of contempt, an offence requiring mens rea.57 However, while there are dicta
consistent with such an approach,58 liability ultimately turned on the wording of
the restraining order the companies had allegedly breached, which prohibited each
company 'whether by itself or by its servants or agents or otherwise' from giving
effect to restrictive practice agreements. Secondly, the House of Lords has recently
rejected the notion that vicarious liability can necessarily be imposed in strict
liability offences. In Seaboard Offshore Ltd v Secretary of State for Transport,59 a
company was prosecuted under section 31 of the Merchant Shipping Act 1988,
which makes it an offence to fail to take reasonable steps to secure that a vessel is
operated in a safe manner. A ship's engine had broken down three times within 24
hours, leaving her drifting at sea. The chief engineer who was responsible for the
mechanical running of the ship had boarded the vessel less than three hours before
it set sail, in circumstances where it was accepted that he needed some three days
to familiarise himself with the machinery. He then made a serious error of
judgment in opening a wrong valve, causing the engines to flood with water. The
company was convicted in the magistrates' court, but the House of Lords
concluded that as a matter of interpretation of the statute and its policy (it would be
surprising if Parliament intended that the owner of the ship be liable for any act
committed by any employee, no matter how lowly, such as the failure by the bosun
or cabin steward to close portholes), the company could not be vicariously liable
for breach of a duty under section 31 for the acts of its servants or agents. The
House of Lords went on to stress that this conclusion applied irrespective of
whether the offence was one of strict liability or not.60

52 Wells, 'Corporate Liability and Consumer Protection: Tesco v Nattrass Revisited' (1994) 57 MLR
817; Wells, 'A Quiet Revolution in Corporate Liability for Crime' (1995) 145 NLJ 1326; Cartwright,
op cit n 46, at p 227.
53 [1995] ICR 586.
54 ibid 593.
55 See, for instance, Tesco Stores Ltd v Brent LBC [1993] 2 All ER 718, discussed by Wells,
56 [1995] 1 All ER 135.
57 This is the interpretation adopted by Wells (1995), op cit n52, at p 1327.
58 op cit n 56, at pp 142C, 149C, 150E.
59 [1994] 2 All ER 99.
60 ibid 105.

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July 1996] Kicking Corporate Bodies and Damning Their Souls

It is difficult to reconcile these two lines of authority. What if the chief en

actions in the Seaboard case had resulted in the pollution of protecte
Would the company still have escaped criminal liability? The position ap
be that whether the doctrine of vicarious liability applies or not is a ma
statutory interpretation, taking into account the language, content and policy
law, and whether vicarious liability will assist enforcement. In the Nation
case, the law could only be made effective by holding the company vica
liable,61 whereas in the Seaboard case, the statute, passed in the wa
Zeebrugge disaster, was aimed at the company and its policies and
mechanisms rather than the aberrant actions of underlings. In National Ri
offences could only be committed by employees. In Seaboard, the reasona
could have been easily and effectively undertaken by the company itself.
A more promising approach was recently adopted by the Privy Co
Meridian Global Funds Management Asia Ltd v Securities Commission.62
case, two senior investment managers, employed by Meridian, improper
their authority to invest in a New Zealand company. By doing this,
breached a New Zealand statute63 requiring notice of substantial investme
given to the company and the stock exchange. The question was whe
knowledge of the investment managers could be attributed to Meridian. R
the doctrine of vicarious liability, the Privy Council held that a person
found within the company whose acts and knowledge could be attribute
company. Significantly, however, Lord Hoffman was not prepared to lim
attribution of knowledge on the basis of the test of 'directing mind and w
'anthropomorphisms'64 were a 'generalisation' and only appropriate i
cases.65 In other cases:

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?66

The answer was simple. The investment managers had the authority to acquire the
relevant interests. Their knowledge had to be attributed to the company, otherwise
the policy of the statute ('to compel, in fast-moving markets, the immediate
disclosure of the identity of persons who become substantial security holders in
public issuers'67) would be defeated.
This reinterpretation of the identification doctrine is of great importance and
opens the door to establishing criminal liability of companies in a broader range of
cases. However, Lord Hoffman entered a major caveat:
their Lordships would wish to guard themselves against being understood to mean that
whenever a servant of a company has authority to do an act on its behalf, knowledge of that
act will for all purposes be attributed to the company. It is a question of construction in each
case as to whether the particular rule requires that the knowledge that an act has been done,
or the state of mind with which it was done, should be attributed to the company.68

61 The same is true of Tesco v Brent, n 55 above.

62 [1995] 3 All ER 918.
63 Securities Amendment Act 1988, s 20(3) and (4).
64 n 62 above, 926.
65 As in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [ 1915] AC 705, where the person
responsible for all the relevant functions in the company was the shipowner himself, Mr Lennard,
who was the 'directing mind and will' of the company (n 62 above, 925).
66 n 62 above, 924 (italics in original).
67 ibid 927.
68 ibid 928.

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The Modern Law Review [Vol. 59

Lord Hoffman then proceeded to g

guilty of manslaughter because its
someone by reckless driving.69
There are problems with this app
person not representing the direc
attributed to the company. How do
'terms and policies of the substanti
for a common law offence such as
can only be done for white-collar
Secondly, it must be stressed that
human being) must be found withi
acts before liability can be attribut
organisations such as P&O where no
be no criminal liability.

Corporate culpability

A better approach would be to eff

and hold companies, as such, dire
central issue. Culpability can on
commentators have argued that
culpability-bearing agents in th
company's operations must be der
Wolf argues, by analogy with soci
consciences, and therefore are not
that organisations cannot be mora
capacities and therefore criminal l
lack the unified consciousness n
organisations lack souls.'73 She goe
can be practically responsible be
moral goals and constraints and, if
paying for the consequences, that
Such an analysis must be reject
necessarily involve 'emotional ca
would surely involve our holding
any moral concerns and simply ope
responsibility. Even with 'sociop
prepared to hold such persons resp

69 ibid.
70 ibid.
71 Sullivan, 'Expressing Corporate Guilt' (1995) 15 OJLS 281. This view was echoed in
where Lord Hoffman stated that 'there is no such thing as the company as such' (ibid 92
72 Wolf, 'The Legal and Moral Responsibility of Organisations' in Pennock and Chapm
Criminal Justice: Nomos 27 (New York: New York University Press, 1985): 'It seems w
particular, to blame them, in the deep sense, for failing to constrain their behaviour according
they are incapable of being motivated to obey' (pp 278-279). A similar view is expr
Arenella who argues that moral responsibility involves an actor being capable of moral eva
which can be incorporated into practical judgments about how to act (Arenella, 'Convi
Morally Blameless: Reassessing the Relationship between Legal and Moral Accountabilit
39 UCLA L Rev 1511).
73 Wolf, ibid at p 279.

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July 1996] Kicking Corporate Bodies and Damning Their Souls

do not lack responsibility to the degree necessary for a finding

responsibility (ie insanity). They do not lack cognitive capacity or the
engage in practical reasoning, or to exercise control over their act
classic hallmarks of responsibility. While the law might well regar
lacking full responsibility in some cases (namely, where murder is
manslaughter on grounds of diminished responsibility74), it seems indisp
they bear some moral responsibility for their actions and are therefore
being accurately described as moral agents. Finally, the Wolf test of e
capacity cannot be accepted as a general test of culpability because of its
encompass negligence. Given the extensive role of negligence as a
culpability in English criminal law, it hardly seems plausible to retrea
subjectivist thinking and devise a rationale of culpability that is only
with a cognitive theory of mens rea.
There are two75 main theories of responsibility, the capacity and the
theory. The capacity theory, based largely on the work of Hart,
responsible agent as one that is capable of reason and capable of e
control, and choosing whether to comply with the law. A moral agent
opportunity to avoid wrongdoing. Because the agent can choose to do o
we are entitled to judge the choices made and blame the agent if we dis
the choice made. The advantage of this theory, particularly in relation t
liability, which will so often be based on a failure to take precautions,
encompasses and explains negligence liability. In making choices we exp
to take reasonable steps to avoid causing harm or exposing others to r
they act in disregard of such obvious risks, we are entitled to blame t
failing to exercise the appropriate degree of care.
The character theory, on the other hand, insists that we hold persons
for those actions that express their character. Causing harm inte
recklessly or negligently demonstrates an undesirable character trait o
indifference to others; such harm is the product of a bad character." Th
who act with valid excuses or justifications, for example, duress, are not
their usual character. Because they have been compelled to act in that
way, an inference of flawed character is inappropriate and blame is not
This theory clearly explains negligence liability. A person who fai
reasonable care is demonstrating an undesirable character trait - that of
or indifferent person. We might not lay the same degree of blame at th
with the intentional wrongdoer who manifests malevolence,78 but indif
the rights of others is nevertheless an undesirable character trait dese
censure.

Both these main theories of responsibility can encompass organ

agents capable of being regarded as culpable in their own right, i

74 Even then it is probably necessary to establish that the 'sociopath' lacked 't
willpower to control physical acts.' See Byrne (1960) 44 Cr App R 246.
75 For two alternative views, see Horder, 'Criminal Culpability: The Possibility
(1993) 12 Law and Philosophy 193, who discusses the 'defiance theory' and h
'agency theory.' This latter theory, however, is not a theory of culpability in th
why a person can be regarded as blameworthy as an agent, as distinct from
because a harm has been caused. For instance, it cannot tell us the basis upon wh
could or could not be held responsible and whether a company could be regar
76 Hart, Punishment and Responsibility (London: Oxford University Press, 196
77 See generally Bayles, 'Character, Purpose and Criminal Responsibilit
Philosophy 5; Lacey, State Punishment: Political Principles and Communi
Routledge, 1988) pp 65-68.
78 Horder, op cit n 75.

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 The Modern Law Review [Vol. 59

culpability of the human agents be

viewed as a simple conglomeratio
making, policy and behaviour depe
authority within the corporation, w
as those relating to safety, being sp
the capacity theory, the exercise of
of action can often only be fairly attr
of it) may well have been set up bef
the scene. A corporation 'marches o
succession of riders.'79 In implemen
it is the decision-making of the com
or blame. As in the P&O case, it
system had been introduced or t
responsible for the failure. The com
was the company that was responsib
of a fair opportunity to avoid wro
Similarly, under the character theo
organisation demonstrates an undes
The board of P&O had been warned
and allegedly responded with fa
'infected' the company 'from top t
regarded as the product of the bad
the senior personnel. Where, as in t
system failure, it is difficult to ass
part of individuals who might have ha
the system - or perhaps no knowle
According to these arguments, a c
Wells has argued, companies sho
machines' that can be blamed for th
to reflect this, English law need
suggested solution,83 but one reject
under which one would aggregate a
persons in the company whose actio
result. Thus, in the P&O case, one w
of the assistant bosun, the bosun, t
together they might be held to ha
elements of the crime.
However, the aggregation doctrine must also be rejected as, again, not reflecting
corporate decision-making and reality. All it does is perpetuate the personalisation
of companies myth. Instead of trying to find one person with whom the company
can be identified, one simply finds several such persons. While this approach does

79 Boulding, The Organizational Revolution (New York: Harper and Brothers, 1968) p 139, cited in
Fisse and Braithwaite, op cit n 3, at p 497.
80 The Times, 8 July 1987, p2. My thanks to Paul Roberts for this reference.
81 op cit n6.
82 Wells, op cit n 3 1, at p 92. See also Fisse and Braithwaite, op cit n 3; Dan-Cohen, Rights, Persons and
Organizations: A Theory for Bureaucratic Society (London: University of California Press, 1986);
Foerschler, 'Corporate Criminal Intent: Towards a Better Understanding of Corporate Misconduct'
(1990) 78 California L Rev 1287.
83 Wells, op cit n48; Colvin, op cit n 50, at pp 18-23.
84 R v HM Coroner for East Kent, exp Spooner and Others (1989) 88 Cr App R 10.

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July 1996] Kicking Corporate Bodies and Damning Their Souls

have advantages over the identification doctrine in that persons low

corporate hierarchy can be included in the equation, it restricts one,
Wells' metaphor, to the proposition that 2 + 2 = 4 and does not enable one
account of companies' organisational structures, procedural rules and
in short, the essential matters that make companies something more than
the sum of their human components. Or, to continue her metaphor, th
cases 2 + 2 = 5.85

Structuring corporate liability

Once this central premise is accepted, it ought not to be difficult for the crimina
law to capture and express the notion that a company is more than the sum total o
its human components, and that a company itself can commit the basic elements o
a criminal offence.
However, an important initial question arises at this point. Should companies be
liable for the same offences as individuals or should special offences, that can only
be committed by companies, be created? In relation to manslaughter, the Law
Commission has opted for the latter solution in proposing a new crime of
'corporate killing.'86 This offence would be committed when there was a
'management failure' (as opposed to 'operational negligence' by an employee) that
'fell far below what could reasonably be expected of [the company] in the
circumstances.'87 This proposed offence would be additional to the Law
Commission's new offences of reckless killing and killing by gross carelessness
(which together would replace the existing crime of involuntary manslaughter),
and companies could still be convicted of these other new offences if the
identification doctrine could be satisfied.88
This proposal has the advantage that it would facilitate convictions in cases such
as P&O where there was clearly a 'management failure' that caused the deaths.
However, this solution is problematic and should be resisted for two reasons. First,
while it would remove some of the obstacles to a corporate conviction where a
death has resulted, it would have no effect on any other offence that can be
committed by a company. For all remaining offences, the identification doctrine
would still have to be overcome, or vicarious liability imposed. Indeed, by lancing
the most controversial boil (corporate killings), there is the danger that pressure for
reform of the general law of corporate criminal liability would subside. Second,
and critically, the creation of a separate offence could mean that corporate killings
would be perceived as different from 'manslaughter' or the new substitute
offences. This could lead to a downgrading of the stigma and seriousness of the
new offence, and could contribute to its continued marginalisation in terms of
enforcement. If a company has killed recklessly or by gross carelessness, there are
strong fair-labelling reasons that only a conviction for the full offence will convey

85 Wells, op cit n 31, at p 88.

86 op cit n 49, paras 8.1-8.77. See also the TUC's proposal for a new offence of 'manslaughter at work'
(TUC, Paying the Price for Deaths at Work (London: TUC, 1994)).
87 ibid at para 8.34.
88 ibid at para 8.77. The Law Commission has proposed that when a corporation is convicted of
corporate killing the court should have power to order the corporation to take such steps as is
considered necessary to remedy any matter which has been a cause of the death (para 8.76). It would
appear from the Report that this power will not be available if the company is convicted of reckless
killing or killing by gross carelessness. This is presumably an oversight. Such powers ought clearly to
be available in all cases of corporate convictions.

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 The Modern Law Review [Vol. 59

adequately the seriousness of the cr

rejection of the wrongdoing.89
Accordingly, companies should be
and subject to the same normal prin
actus reus requirements, the first
acts (for example, pumping effluent
failing to implement a safety system
to omissions, it has been argued that
upon corporations to prevent their
measure seems unnecessary as su
construed as having created a dan
manner, and therefore would be un
materialising.91
Next, the problem of establishing
in cases of human causation. There i
operations and procedures lead to th
alleged intervention of third par
determined under the normal princi
or inactions of an employee that di
solution seems clear. If the emplo
employment and duties, the com
(although, as we shall see, it might
liability offences). To emphasise th
express provision that a manageme
even if the immediate cause is the act
will even include an employee act
company. It would be too easy othe
basis that it had ordered its employ
other hand, if the employee is actin
then he or she effectively becomes
be determined under the general pr
With regard to the culpability (
crimes, a company through its cor
own culpability. Manslaughter, for
gence.96 If a company blatantly fai
gross negligence can be attributed
Fisse:

Corporate policy is the corporate equivalent of intention (recklessness or negligence), and a

89 For a discussion of the principle of fair labelling, see Ashworth, Principles of Criminal Law (Oxford:
Clarendon Press, 2nd ed, 1995) p 86; Williams, 'Convictions and Fair Labelling' [1983] Cambridge
LJ 85.
90 Colvin, op cit n 50, at p 26.
91 Miller [1983] 2 AC 161.
92 As in, for example, National Rivers Authority v Yorkshire Water Services [1995] 1 All ER 225. See
Padfield, 'Clean Water and Muddy Causation: Is Causation a Question of Law or Fact, or Just a Way
of Allocating Blame?' [1995] CLR 683.
93 As in, for example, Southern Water Authority v Pegrum and Pegrum [1989] CLR 442.
94 op cit n 49, at para 8.39.
95 Jones, Textbook on Torts (London: Blackstone Press, 4th ed, 1995) p 279. This is also the position
under the criminal doctrine of vicarious liability: see Law Com No 237, op cit n 49, at paras 6.23-
6.26.
96 Adomako, n 12 above.

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July 1996] Kicking Corporate Bodies and Damning Their Souls

company that conducts itself with an express or implied policy of non-complian

criminal prohibition exhibits corporate criminal (culpability).97

The Law Commission, in proposing the new offence of corporate killin

recommended that the requisite culpability standard should be tha
management failure 'constitutes conduct falling far below what can reas
be expected of the corporation in the circumstances.'98" This differs fr
Commission's test for the offence of 'killing by gross carelessness
additionally requires that 'the risk of death or serious injury would h
obvious to a reasonable person in her position, and that she was ca
appreciating that risk.'"99 The omission of this latter requirement from th
of corporate killing is based on the Law Commission's view that com
only metaphysical entities and therefore:
to hypothesise a human being who could be in the same position as the corpor
logical impossibility, and it would therefore be meaningless to enquire, as in the o
killing by gross carelessness, whether the risk would have been 'obvious' to such
Moreover, corporations have no 'capacity,' in the sense in which we use that ter
report in relation to an individual, so it would be equally impossible to enquire wh
defendant corporation had the capacity to appreciate the risk.l'?

This approach misses the central point that, while corporations

metaphysical entities, this does not prevent them being culpability-bearin
who through their rules, policies and operational procedures can ex
requisite degree of mens rea and be blamed therefor. The Law Comm
proposed general test for the offence of killing by gross carelessness can
applied to companies. The issue would be whether the risks would h
obvious to a reasonable corporation in that position and whether the cor
had the capacity to appreciate the risks. Of course, this latter requirement
company have capacity to appreciate risks will be of little significance in
because a company, by definition, will necessarily have this capacity if
are obvious.0'1 However, it is important, if corporate killings are to be co
appropriately, that liability be limited not only to cases where the c
conduct fell far below what could reasonably be expected, but also to ca
the risks would have been obvious to other companies in that situation. A
of the same test to both individuals and companies will serve to emphas
corporate offences are not 'poor cousins' of crimes committed by indivi
The one outstanding issue relates to the burden of proof. The Council o
has proposed that whenever a company's activities or those of its emplo
to a prohibited harm, the company should be prima facie liable; the
burden would then switch to the company itself to prove that it had a safety
that could not be faulted.102 At first sight this approach might seem que
in that it involves holding all offences committed by companies to be off
strict liability with due diligence defences attached (ie in reality, of
negligence) when proof of mens rea (in the form of intention or reckle

97 'Recent Developments in Corporate Criminal Law and Corporate Liability to Monetary

(1990) 13 UNSW LJ 1, 15 (words in parenthesis added).
98 op cit n49; Involuntary Homicide Bill, cl 4(l)(b).
99 ibid at para 8.2.
100 ibid at para 8.3.
101 There is simply no room for an argument based on Elliot v C (a minor) (1983) 77 Cr Ap
a corporation is backward or in some other way unable to appreciate risks.
102 Council of Europe, Liability of Enterprises for Offences, Recommendation No R (88)
6-7.

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 The Modern Law Review [Vol. 59

would be required if the same offe

such a differential approach could
of their enormous power and oper
is no injustice in holding compan
provided fair warning is given.'03
operations often being impenetrab
route to convictions. However, c
work well for those offences with
such as pollution, consumer pro
which are already offences of str
liability. However, transforming
facie crimes of strict liability sim
smacks of overkill and unfairn
productive in that 'corporate mans
'manslaughter,' which could again
such offences.
Accordingly, especially in cases where companies are prosecuted for common
law offences, such as manslaughter, the burden of proof should not be reversed. As
explained, direct proof of mens rea should not pose any particular problems once it
is understood that this can be located in the company's policies and organisational
structures. Convicting companies of the same offences, established in the same
way as those committed by individuals, is the best route to emphasising the
seriousness of the crime and expressing the appropriate degree of censure.

Conclusion

Implementation of these proposals would make the conviction of companies f

corporate violence as well as other offences a real possibility. It would certain
facilitate a conviction in cases such as Herald of Free Enterprise. In turn, it mi
induce a change of policy by the police and the HSE in cases of death and ser
injury at work. If there were a realistic prospect of a conviction, fulle
investigations might seem worthwhile. Kicking a few more corporate bodies
damning a few more corporate souls might stimulate the development of a f
more consciences in those companies that have the lives and safety of th
workers in their hands, and who operate in spheres that pose serious risks to t
public and the environment.

103 Ashworth, op cit n 89, at p 161.

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