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Grenfell Tower Fire: A Turning Point for Corporate Manslaughter?

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About The Author

Peter Lennon (Consulting Editor)

Peter Lennon is a trainee solicitor at a Top 50 UK law firm, with experience in insurance, commercial disputes, and contentious probate. Prior to law, Peter studied History at Selwyn College, Cambridge, before completing the GDL and LPC at the University of Sheffield.

His main areas of interest are litigation, law reform, history and foreign policy. Outside work, Peter enjoys books, cooking, and pretending to know about football.

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People must be held to account for what has happened at Greenfell Tower and as the details come out I think we need to see criminal charges brought and we need to see those accountable in the dock before a judge and jury.

David Lammy MP

In the weeks following the Grenfell tower fire, Jack Slone wrote an impassioned piece for Keep Calm Talk Law covering the emerging facts of the disaster, and expressing much of the raw outrage that surrounded Grenfell at the time. More than a year after the fire, however, little seems to have happened. The police only finished their inspection of the site in August, the Grenfell Tower Inquiry is ongoing, and prosecutions may not be brought until 2020.

While the disaster is no less tragic today, as lawyers Grenfell should also be a source of interest. The Grenfell fire was an unprecedented event - the largest loss of life in London since World War Two - and the result not of terrorism or war, but of a domestic fire run amok. Any prosecutions resulting from the Grenfell investigation will feature intense media scrutiny and public interest. The subject matter is almost certainly serious enough to reach the higher courts, not least because there is so little precedent for a disaster of this kind, on this scale.

In many ways Grenfell is comparable to the Hillsborough stadium disaster, and just as Hillsborough led to major precedents regarding psychiatric harm (see Alcock v Chief Constable of South Yorkshire [1991]) and end-of-life decisions (see Airedale NHS Trust v Bland [1993]), Grenfell may be a test case for numerous areas of the law - in particular, as this article examines, the law on corporate responsibility for death.

Back in July, the Metropolitan Police were quoted as saying they had “reasonable grounds” to investigate and pursue corporate manslaughter offences on the part of the local council and the building management company responsible for Grenfell. This is significant because the offence of corporate manslaughter is a surprisingly recent creation, little over a decade old, and has never been brought in a case of this scale. If successful prosecutions are brought over Grenfell, an entirely new precedent could be set for corporate manslaughter. A failed prosecution, on the other hand, could expose some of the shortcomings of the law as it stands, and the intense public and political pressure surrounding Grenfell could lead to legislative change at a time when law reform would normally be low on the government’s list of priorities.

Corporate Manslaughter: The Personality Problem

The principle of separate corporate personality has been the foundation of almost all English company law since Salomon v Salomon and Co Ltd [1896]. Private companies, in short, are persons - not “natural” persons like the man or woman in the street, but “legal” persons nonetheless. They may enter into contracts, own land, act tortiously - and commit crimes.

This presents an interesting problem for criminal law: how can a company satisfy the mental element of a crime? What constitutes the “mind” of a private company, and how can it be evidenced?

The traditional answer, which remains good law in all cases except manslaughter, comes from Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915]. Asked to adjudicate on a company’s liability under the Merchant Shipping Act 1894, the House of Lords found that a limited company could be found liable for the negligence of its controllers, as they were in effect its mind. To quote Viscount Haldane:

My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation…

The “directing mind and will” principle therefore holds that companies may be liable where their directors or controllers possess the requisite state of mind for an offence. This is sometimes referred to in reverse as the “alter ego” principle, in that the company is the “alter ego” of the director (usually a single person), and therefore cannot be used as a shield to his or her negligence.

This has been the general principle in English law since 1915, but it is not without issues. Lennard's Carrying Co Ltd [1915] was a response to a particular problem arising from separate corporate personality, which at the time was a relatively recent development. It was a solution to the situation where a company has committed a guilty act but has no provable state of mind, and that company’s director possessed the requisite state of mind but did not carry out the act (due to separate corporate personality). The main purpose of the rule was to prevent companies and their directors escaping punishment for fraud and negligence, in a way that never accounted for large modern corporations or their potential to cause harm by oversight or accident.

However, in a large modern corporation (for instance, the two corporations responsible for Grenfell), it is extremely unlikely that any one person could be described as the “directing mind and will”. The directing mind principle has not aged well, and this is particularly plain to see in the case of disasters involving widespread loss of life.

In March 1987, the ferry Herald of Free Enterprise capsized shortly after leaving the port of Zeebrugge in Belgium, killing 193 passengers and crew. Despite the Sheen report into the disaster describing the company – which had since rebranded to P&O European Ferries to avoid the media fallout - as “infected by the disease of sloppiness”, prosecutions for manslaughter in the subsequent case of R v P&O European Ferries (Dover) Ltd [1991] 93 Cr App Rep 72 were unsuccessful.

While P&O European Ferries [1991] confirmed that a company could in theory be charged with gross negligence manslaughter, in practice there were similar failures to prosecute following the Piper Alpha oil rig disaster in 1988, the Southall train crash in 1997 (see Attorney General’s Reference No 2/1999 [2000]) and the Hatfield train crash in 2000. The only successful prosecution of a company for manslaughter under this regime was in R v Kite and OLL Ltd [1996] (unreported), after four teenagers were swept out to sea and drowned while kayaking at an activity centre.

Clearly, there was demand for a legal instrument that could achieve two aims in the wake of disasters like these: firstly, to hold companies and their directors accountable beyond the scope of existing health and safety laws, and secondly, to properly compensate victims and their families who might otherwise be left searching for compensation from a single lower-level employee or a government compensation fund. The existing law of corporate liability was not fit for this purpose.

Reforming the Law: The New Offence of Corporate Manslaughter

The Corporate Manslaughter and Corporate Homicide Act 2007 (CMCHA 2007) sought to address these issues. Building on the recommendations of a 1996 report by the Law Commission, the CMCHA 2007 created a new offence of corporate manslaughter, and abolished the old offence of gross negligence manslaughter for companies.

One of the major selling points of the CMCHA 2007 was the severe penalties attached to the new offence. The courts were given powers to force guilty parties to take specific remedial steps, or even to publicise their own convictions. The offence is triable only in the High Court, and carries an unlimited fine on conviction. In a case involving the deaths of more than 70 people, this could mean a truly eye-watering fine for the council or the tenant management organisation if convicted.

The new offence is made out where:

  1. a relevant organisation;
  2. manages or organises its activities;
  3. in a way which grossly breaches a relevant duty of care; and
  4. causes a person’s death.

So, how do these elements apply to Grenfell?

A relevant organisation

This is clearly defined in the CMCHA 2007. Section 1(2) of the CMCHA 2007 defines a relevant organisation as a corporation, a police force, a partnership or a trade union that employs workers, or one of a number of public bodies set out in Schedule 1. A “corporation” for these purposes includes public bodies incorporated by statute, and therefore could include the local authority. A prosecution could therefore be brought against Kensington and Chelsea London Borough Council, or against Kensington and Chelsea Tenant Management Organisation, the corporation which owned the tower. It is worth noting, however, that the courts may be less willing to impose a large fine on the council (which will ultimately be paid by taxpayers) than the tenant management organisation, a company.

Manages or organises its activities

This element is more vague. Section 1(3) of the CMCHA 2007 says only that the way the organisation’s activities are managed and organised “by senior management” must be a substantial element in the breach. Section 4(c) of the CMCHA 2007 in turn defines “senior management” as those who have a significant decision-making role in either the whole or a large part of the organisation’s activities (most likely the directors of a company) or those responsible for the “actual” managing of those activities. This second part is new and potentially significant – it could be argued that the manager of a franchise (or the operator of the Herald of Free Enterprise) could be liable regardless of their position in the whole company’s structure. This appears to be a much broader test than the old “directing mind and will”.

For Grenfell, this would likely mean a focus on Kensington and Chelsea councillors and the directors of the tenancy management organisation, but also those responsible for the day-to-day management and maintenance of the tower. If one of those persons contributed in a substantial way to a breach, then the company itself might be liable.

Grossly breaches a relevant duty of care

What is a “relevant duty of care”? Section 2 of the CMCHA 2007defines the relevant duties, but not exhaustively. A duty may be owed by a corporation in connection with “the carrying on of maintenance operations” or “the carrying on of any other activity on a commercial basis” under Section 2(1)(c) of the CMCHA 2007 – the former in particular may be applicable to Grenfell. However, Section 3 of the CMCHA 2007 states that anything done in the exercise of an “exclusively public function” does not fall within this definition, so Grenfell Tower’s status as social housing may complicate matters, particularly where the council is concerned. Ultimately, it will be for the judge to decide whether a relevant duty was owed, but it will not be as straightforward as in the more typical employer-employee cases that we have seen since the Act came in.

It is also worth bearing in mind that the offence requires a gross breach of the duty. This is a matter of fact, to be determined by the jury. A gross breach is defined by the Act only as “falling far below the what can reasonably be expected of the organisation”, but Section 8 of the CMCHA 2007 does offer a non-exhaustive list of factors a jury must consider. These include breaches of health and safety legislation, the risk of death, and the extent to which there were policies and systems (as opposed to a single poor decision) which led to the breach.

Causes a person's death

This element is unlikely to be contentious. Any prosecution for Grenfell will likely deal with matters such as substandard building materials and lax safety procedures. Of all the elements of this offence, it would be least difficult to show that these matters caused at least some of the deaths on 14 June 2017.

Corporate Manslaughter in Practice

On its face, the CMCHA 2007 may seem tailor-made for a disaster such as Grenfell, created in response to previous disasters where victims were unable to extract proper compensation from large corporations with shoddy health and safety records. However, it is important to note that the law in practise has not been a bludgeon against giant, negligent corporations.

There have been 26 convictions for corporate manslaughter since the Act came into force. Most have been employer-employee cases, though a handful have related to customers or bystanders, and one to a residential care home. None have involved landlord-tenant disputes, which is ultimately what the Grenfell case is, or public authorities.

In addition, most if not all of the companies convicted are single-director companies, or owner-managed companies where a single owner-director has been responsible for almost all of the company’s affairs – the “directing mind and will” in all but name. The convictions also deal with quite small corporations. Only one conviction – the 2017 case of Martinisation (London) Ltd – resulted in a fine of more than £1,000,000.

The Martinisation case (unreported) saw the company’s owner and sole director jailed following the death of two employees. This is not typical. In many of these prosecutions, company directors have pled guilty to corporate manslaughter in return for personal manslaughter charges against them being dropped. Corporate manslaughter itself is a very difficult charge to prove at trial, and there may be an element of prosecutorial discretion here, with prosecutors preferring to bring “easy” charges for strict liability offences – under the Health and Safety at Work Act 1974 or fire safety regulations – rather than jumping through all of the hoops required to assign liability for manslaughter. These other offences can still carry significant penalties while being much easier (and therefore costing less) to bring.

Obviously, there has never been a case like Grenfell under the CMCHA 2007 – there have not been any corporate disasters in the UK on the scale of Grenfell since it came into force. It is still worth noting that there is very little precedent for many of the questions discussed above. As most prosecutions have been against companies with one or very few directors, who were often directly involved in day-to-day operations, it has not been necessary to properly define “senior management” or the “actual” management clause. Likewise, as most cases have involved private employers and employees, it has not been necessary to explore the extent of the “relevant duty of care”. Any prosecution brought because of Grenfell is likely to change this.

What Does This Mean for Grenfell?

Prosecution is always something of an uphill battle, but a prosecution for corporate manslaughter over the Grenfell disaster will be a particularly difficult task. Firstly, prosecutors will have to convince the court that the council or the tenancy management organisation owed a relevant duty of care, despite one being a public body exercising public functions, and the other being a statutory corporation set up for the sole purpose of managing social housing. Secondly, they will have to prove that a gross breach occurred – that a particular person, probably a councillor or director, acted in a way that led directly to the deaths on 14 June 2017. All of this must be proved beyond reasonable doubt, more than a decade after the decisions in question likely took place, and within the internal structure of either a local authority (with decision-makers changing every election) or the largest tenancy management organisation in the UK. In the case of the council, they will also have to convince the court that it is worth demanding a very substantial amount of money out of the public purse, at a time when council budgets and local services are increasingly stretched.

It is a very real possibility that there will be no corporate manslaughter convictions – or any manslaughter convictions at all – for the Grenfell tower disaster. Given the level of public interest in this case, and the lack of nuance with which the media tends to treat technical legal issues, we can expect a certain level of outcry if this occurs. The Grenfell case is therefore significant regardless of its result. If successful, then this will be an important test case for years to come, likely setting a precedent for interpretation of the CMCHA 2007 and potentially expanding the scope of corporate manslaughter as an offence. If unsuccessful, then this will still be an important test case, but with the added possibility of outcry leading to rapid change in the law. It would not be at all unusual to see hasty amendments made in response to public outcry over a crisis.

In all likelihood, we are still years away from any prosecutions being brought over the Grenfell disaster, let alone verdicts. In the meantime, however, this is a case that both corporate and criminal lawyers should be watching with interest.

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Tagged: Company Law, Criminal Law, Housing Law, Justice, Property Law

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