{"id":1183,"date":"2018-02-02T08:40:44","date_gmt":"2018-02-02T08:40:44","guid":{"rendered":""},"modified":"2021-02-26T14:52:41","modified_gmt":"2021-02-26T14:52:41","slug":"importance-of-the-senior-management-test-business-law-essay","status":"publish","type":"post","link":"https:\/\/www.lawteacher.net\/free-law-essays\/business-law\/importance-of-the-senior-management-test-business-law-essay.php","title":{"rendered":"Importance of the Senior Management Test"},"content":{"rendered":"

<\/p>\n

Discuss the importance, and potential interpretation, of the \u2018senior management\u2019 test as used in the corporate manslaughter and corporate homicide act 2007. Compare this with other tests for corporate liability particularly the \u2018identification doctrine\u2019 for corporate manslaughter at common law, and also the principles of \u2018attribution\u2019 and \u2018aggregation\u2019 (plus others, if you wish) to be found in other areas of liability. What difficulties and advantages do each of these theories contain for imposing criminal liability on corporate bodies? Should some other test have been adopted in the 2007 Act?<\/p>\n

Senior management test<\/p>\n

Identification<\/p>\n

Attribution<\/p>\n

Aggregation<\/p>\n

Difficulties and advantages of each\u2026\u2026\u2026.<\/p>\n

Any other test in 2007\u2026<\/p>\n

Introduction<\/h2>\n

Prior to the introduction of the Corporate Manslaughter Act some argued that the English law was severely defective to the extent that it posed a \u201cmajor obstacle\u201d\u00a0[1<\/a>]\u00a0in attempts to secure a conviction for corporate manslaughter. The introduction of the Corporate Manslaughter Act in 2007 was heralded by many as the answer to the problems faced in proving the guilt of \u201csenior management\u201d and \u201cindividual directors\u201d in the event of corporate manslaughter. However if one scratches below the surface it is clear the 2007 legislation is inherently flawed and has still left many questions unanswered. The effectiveness of the \u201csenior management\u201d test will be evaluated later in this essay; in particular in light of its common law predecessors, the \u201cidentification\u201d, \u201cattribution\u201d and \u201caggregation\u201d doctrine. The essay will also seek to explore whether the introduction of the \u201csenior management\u201d test was the correct decision. Or should the government have considered an alternative test more conducive to convicting a corporation?<\/p>\n

Position, pre 2007 Act<\/h2>\n

The roots of the identification principle can be traced back to the case of Lennard\u2019s Carrying Co v Asiatic Petroleum. Following the sinking of a ship carrying the defendant\u2019s cargo, it was established that the appellant company\u2019s director Mr J.M Lennard, \u201ccan [not] excuse himself for not having known of the defects which manifested themselves in the condition of the ship, amounting to unseaworthiness\u00a0[2<\/a>]\u00a0\u201c. Essentially, the question posed to the courts was whether the negligent acts of the company director could be imputed to the company. It is important to note that, prior to this case; the only means of attributing liability to a company was through vicarious liability<\/a>. However this doctrine excluded the acts of directors, its scope only extended to the acts of employees.<\/p>\n

Viscount Haldane in his judgement introduced the idea of \u201cdirecting mind\u201d for the first time. He argued that if Mr Lennard can be seen as senior enough to constitute the \u201cdirecting mind\u201d of the corporation then his action must be the action of the company itself. This was the first mention of the identification principle in the form we recognise it as today.<\/p>\n

He elaborated further and defined the act of a \u201cservant or agent of the company\u201d as an action for which the company will be liable in a \u201crespondeat superior\u201d relationship. In essence what we can consider a master\/servant relationship. Conversely he considers the acts of a director as an action for which the company is liable. Not because of a master-servant relationship, but rather \u201cbecause his action is the very action of the company itself\u201d. This firmly established that the \u201cvery ego and centre of the personality of the corporation\u201d acts not in a personal capacity, but as the corporation.<\/p>\n

This dictum paved the way for a radical new direction for the law. It established that the acts of a \u201cdirecting mind\u201d within the company can be considered to be the acts of the company itself. The identification or directing mind principle evolved following Viscount Haldane\u2019s speech in Lennard Carrying Company v Asiatic Petroleum in a trilogy of cases in the 1940\u2019s. However, the law was still lacking in the area of criminal liability. It wasn\u2019t long before the question of whether a company can be criminally responsible arose before the courts.\u00a0[3<\/a>]\u00a0(Criminally responsible quote).<\/p>\n

DPP v Kent and Sussex Contractors involved a transport manager who knowingly submitted fraudulent records in order to acquire petrol coupons. The question in front of the courts was whether the court could impute his intention to the company\u00a0[4<\/a>]\u00a0. The Magistrates court acquitted him on the presumption that the offence required \u201can act of will or state of mind\u201d and the required mens rea was not present. This decision was a surprising outcome following the judgement in Lennard which emphasised \u201cdirecting mind theory\u201d, it seems logical that if the actions of a directing mind can be attributed then so should the state of mind of that person. The decision not to impute his intention to the company was strongly opposed on appeal where the decision was reversed.<\/p>\n

On appeal it was held that a company can be criminally liable where mens rea is required to prove the offence. Hallet J states, why is it that a person who acquires petrol coupons is under a statutory duty to act honestly whereas it is \u201cstrange and undesirable\u201d that a body corporate should be able to escape liability which would be incurred in a like case by a private person.<\/p>\n

McNaghten J expands on the issue of mens rea in his dictum. He states that if an agent of the company who within his authority acts falsely by which he intends to deceive, \u201chis knowledge and intention must be imputed to the company\u201d. Viscount Caldcote goes further and rejects the application of vicarious liability, favouring the identification principle \u201calthough the directors or general manager of a company are its agents, they are something more\u201d. He goes on to consider a company \u201cincapable of acting or speaking or even of thinking\u201d unless its officers have \u201cacted, spoken or thought\u201d. \u201cManagers and directors\u201d makes reference to senior managers and marks a retreat from the principle of vicarious liability, distinguishing the acts of any \u201cagent\u201d which do not represent the company from a \u201cmanager or director\u201d who act as the company.<\/p>\n

The second of these trios of cases is R v ICR Haulage Ltd; the defendants argued that a corporation should not be convicted for an offence which requires mens rea. The appeal was rejected, Stable J made it clear \u201cstate of mind, intention, knowledge, or belief\u201d must \u201cdepend..[on the] position of the officer or agent, and the other relevant facts and circumstances of the case\u201d. As the managing director and a defendant it was easy to establish Mr Roberts as the \u201cdirecting mind\u201d behind the company. His acts were therefore clearly of the company.<\/p>\n

The final stage of development was the extension of corporate liability to offences requiring affirmative proof of mens rea. The notion that a corporation could be \u2018directly\u2019 liable for committing a truly criminal offence emerged in three 1944 cases, which have been described by Welsh as \u2018revolutionary\u2019 in their effect.[36] In Director of Public Prosecutions v Kent and Sussex Contractors Ltd[37] it was held that a company could be charged with the offence of furnishing false information \u2018with intent to deceive\u2019 when the company\u2019s transport manager sent in certain returns he knew to be false. The justices found that the offence included a mental element, that a corporation could not entertain criminal intent, and that this meant the company could not be made criminally liable for the offence. This finding was reversed by a Divisional Court where Lord Caldecote said:<\/p>\n

The real point which we have to decide \u2026 is \u2026 whether a company is capable of an act of will or a state of mind, so as to be able to form an intention to deceive or to have knowledge of the truth or falsity of a statement \u2026 Although the directors or general manager of a company are its agents, they are something more. A company is incapable of acting or speaking or even of thinking except insofar as its officers have acted, spoken or thought \u2026 The officers are the company for this purpose.[38]<\/p>\n

This reasoning was approved in the subsequent case of R v ICR Haulage Co Ltd[39] where the company was convicted of common law conspiracy to defraud. The conspiratorial intent of its managing director was imputed to the company. DPP v Kent and Sussex Contractors was treated as authority for the proposition that a state of mind could be attributed to a company. Stable J stated that the court was not deciding that in every case where an agent of a limited company acting in its business commits a crime the company is automatically to be held criminally responsible. Whether the state of mind and actions of a corporate agent are to be imputed to the corporation \u2018must depend on the nature of the charge, the relative position of the officer or agent, and the other facts and circumstances of the case\u2019.[40] In the third case, Moore v I Bresler Ltd,[41] it was held that a company could be convicted for making false tax returns with intent to deceive when the returns were made by agents acting within the scope of their authority \u2014 even though the agents intended to defraud the company itself. These decisions represented a radical change in the attitude of the courts towards the liability of companies for crime; in each case the corporation was held criminally liable for offences committed by human agents, in circumstances where, had the master or employer been a natural person, it could not have been convicted.[42] These were clearly not cases of vicarious liability but a kind of personal liability of the company itself.<\/p>\n

The three 1944 decisions were once criticized as putting the law of corporate criminal liability into a state of confusion in that it was not clear on what basis personal corporate liability was to be distinguished from vicarious liability.[43] Moore v Bresler Ltd particularly concerned commentators as the guilty acts were not, as in the other two decisions, performed or authorized by directors of the company, but by seemingly lesser agents (a general manager and a sales manager). The decision was said to result in an \u2018undue extension of corporate liability by blurring the distinction in law of the agents of the corporation and the legal persona itself\u2019.[44] The difference between the vicarious and the so-called personal liability of a corporation was to be further consolidated in subsequent cases \u2014 although it will be seen that to some extent the distinction remains blurred. It suffices to say at this point that the cases are generally regarded as establishing that a form of corporate criminal liability existed according to which the company itself was identified with the acts of certain officers, rather than being simply accountable for the transgressions of its employees.<\/p>\n

Also R v ICR haulage and Moore v Bresler.<\/h2>\n

Then Tesco v Natrass<\/h2>\n

Then evaluate the law\u2026<\/h2>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

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