|
Prosecution
of Directors: neglect
How do you show that an offence by the company is
the result of 'neglect' on the part of a directors?
In
dealing with this question, it is worth while considering
the arguments made by the trial judge involving whether
to dismiss particular section 37 charges relating
to the Hatfield trail crash.
In
a pre-trial ruling, the judge stated that in order
to understand the meaning that should be given to
words in section 37, regard should be had to the "White
Paper to which [the act] owes its existence."
The judge then states:
"From
[the White Paper] it appears, especially paragraph
261, 263, and 264, that criminal sanctions were
recommended to be extended to appropriate individuals
but only in cases where there was something more
than inadvertence or common law negligence or failure
to achieve an objectively judged standard of care.
The
report spoke of "offences of a flagrant, wilful
or reckless nature". Parliament has not chosen
to adopt these epithets but the words it has used
should be read in this light. To the extent that
the Act in section 37 goes into the Boardroom or
manager's office in search of criminal responsibility,
in my judgment, it does not do so in search of the
merely careless or purely negligent officer. It
is looking to place within its reach those whose
seniority and subjective knowledge of the fact constituting
criminal conduct by their company is such that an
extension of criminal liability to them in their
personal capacity is just and proper." [1]
Moving
specifically on the question of the meaning of 'neglect',
the trial judge then quoted Scottish High court case
of Wotherspoon v HM advocate:
“...
the search must be to discover whether the accused
has failed to take some steps to prevent the commission
of the offence by the corporation to which he belongs
if the taking of those steps either expressly falls
or should be held to fall within the scope of the
functions of the office which he holds. In all cases
accordingly the functions of the office of the person
charged with a contravention of section 37 (1) will
be a highly relevant consideration for any judge
or jury and the question whether there was on his
part, as the holder of the particular office, a
failure to take a step which he could and should
have taken will fall to be answered in light of
the whole circumstances of the case including his
state of knowledge of the need for action or the
existence of a state of fact requiring action to
be taken of which he ought to have been aware.”
[2]
The
trial judge goes onto say, (following the case of
Manifest Shipping v Uni Polaris) that :
"In
my judgment "ought to have been aware"
in this passage must have been construed in the
sense of turning a blind eye in circumstances where
the defendant had suspicion or belief as to the
material facts but, because he feared the answer
might be unpalatable, he did not want to know more.
.... It is a subjective test and not equivalent
to inadvertence, laziness or even gross negligence."
It
should be noted that the meaning that the trial judge
has given to 'ought to have been aware" is particularly
contentious - since it imputes a need to show that
the director was actually aware of the material facts
and a deliberate closing of the mind, more akin to
the meaning of 'connivance'. The trial judge did not
for example follow an earlier case of Re Hughes,
Rea & Black In
this case, the judge held - in the context of a testamentary
provision of which the claimant was unaware - that
“neglect” was “a failure to do something
which the person under the obligation knows or ought
to know” should be done. The Judge stated::
“I
should have had no hesitation in saying that, just
as "negligence," in its legal collocation,
implies failure to perform a duty of which the person
charged knows or ought to know, so in a document
of this kind "neglect" imports failure
to do something which the person under the obligation
knows or ought to know to be a condition.”
[3]
However,
returning to the pre-trial ruling in the Hatfield
prosecution, the trial judge summarised his position
by saying that to show 'neglect" proof of the
following would be required
| (a) |
the
commission of an offence by the company; |
| (b) |
that the officer had a duty to inform himself
of the facts that constituted the predicate offence;
|
| (c)
|
that
he had a duty to act in relation to those facts; |
| (d) |
that
he was neglectful of those duties in the sense
that he either knew or ought to have known but
shut his eyes to the fact that there were reasonably
practicable steps that he could have taken but
he did not take them; |
| (e) |
that
the commission of the predicate offence could
be attributed to that neglect. |
In determining what duties a director has - one can
not look to the health and safety at work act and
associated regulations as they do not in themselves
impose any positive obligations upon a director to
do something in particular. In order to assess what
obligations a particular director had it would be
necessary to consider his or contract of employment
and the context in which s/he operated and what was
required of him or her within the company.
Footnotes
[1]
p.93 of court transcript
[2]
Wotherspoon v HM advocate 1978 JC 74
[3] Re
Hughes, Rea & Black [1943] Ch 296
|
