Prisons and police authorities will be liable for prosecution over deaths of people held in custody after a final defeat of the Government over the scope of new corporate manslaughter laws.
The new law on corporate killing is now set to receive Royal Assent within days after the Lords voted by 186 to 157 to include deaths in custody.
Yesterday the Government conceded defeat and published an amendment to extend the scope of the Corporate Manslaughter and Corporate Homicide Bill.
The battle in the Lords on Tuesday was the fifth time that the issue has been debated by peers and marked the climax of years of consultation and controversy over the measure.
MPs have previously rejected the Lords' amendment four times. But with just days before the end of this Parliamentary session, the bill would have been lost if ministers had insisted the amendments had to be reversed.
The Bill allows companies to be prosecuted for gross negligence leading to deaths of employees or members of the public.
Yesterday campaigners and lawyers welcomed the Government defeat and the certainty that the Bill will now become law.
David Bergman, Director of the Centre for Corporate Accountability said: "We are thrilled that finally the Government has agreed with the Lords and human rights organisations as well as ourselves, that the new Bill should apply to deaths in custody.
"We have long campaigned that this new offence should apply as widely as possible and include not only conventional work-related deaths but also those deaths resulting from the serious failures on the part of state bodies."
Professor Gary Slapper, director of the Open University law programme, said: "The new law is one of the most significant legislative changes to corporate responsibilities since the principles of the modern company were crystallised in the 14th century.
"The legislation makes it easier to convict culpable organisations. But the new law has not lowerered the threhold of guilt: it criminalises only an organisation whose gross negligence results in death."
But he added: "Companies with good safety policies have nothing to fear from the new Act, even if someone dies in an awful accident."
A series of high-profile accidents such as the Southall rail crash and the Paddington rail crash fuelled the case for change.
They showed the huge burdens in mounting a successful prosecution against negligent companies because of the need to identify one senior person in the company who knew enough to be liable.
To convict a company under the new offences of corporate manslaughter in England and Wales or corporate homicide in Scotland, the prosecution must prove that there was the "gross breach" of senior management's duty of care.
David Leckie, a partner in health and safety law with the law firm Maclay Murray & Spens, welcomed the defeat of the Government.
"The stigma and reputational damage which a corporate manslaughter conviction will cause should ensure that this law's enactment makes safety a priority on the boardroom agenda. "
He said that the measure would still disappoint some campaigners who had wanted to see individual managers facing jail.
"No directors or other individuals will be prosecuted under the new law. There will be no sentences of imprisonment."
But senior management would nonetheless be under scrutiny as never before, he added and "their actions and omissions will be under the microscope."
He added that the fines for corporate manslaughter convictions would almost certainly be significantly higher than under existing health and safety laws; and courts also had power to make a "publicity order" ensuring companies made public the details of a conviction.