Corporate Killing in Scotland - Can you Update me on the Position?
Last November the expert group appointed by the Scottish Executive to consider a statutory offence of corporate culpable homicide issued its report. As expected, the group proposed a new statutory offence of corporate killing. It recommended that this should apply to incorporated companies and, as far as possible, to unincorporated and Crown bodies. The report recommended that two individual offences (applying to named persons) be introduced. One would apply where an individual is responsible directly for a death, the other (applying only when the corporate body has been convicted) would potentially catch senior managers/directors whose acts or omissions contribute directly to a death. Individual offences were however opposed by some representatives on the expert group. Business concerns were that individual offences may discourage new investment in Scotland and talented individuals from taking up senior management posts. The Health and Safety representative opposed individual offences on the basis that most workplace deaths result from organisational, not individual failure. Proposed penalties include custodial sentences for: · individual offences · equity fines where a company is required to issue new shares to the value of a fine · corporate probation · community service orders. Scottish recommendations differ considerably from the draft bill under consideration in England and Wales that was covered in this column in June 2005, particularly in relation to individual offences. March saw Ministers respond to the Home Affairs and Work and Pensions Committees' report stating that the proposed inclusion of a senior manager offence in the draft bill is to be re-considered. Ministers stated that individual offences will not form part of the bill, when introduced, and that they intend to examine the interaction between directors' disqualification and a company's conviction for a proposed offence. The Executive is considering the legal and practical issues surrounding the recommendations before deciding on its next steps.
Malcolm Gillies is a partner specialising in corporate finance with commercial law firm Shepherd and Wedderburn. +44 (0)141-566 7224