Corporate Criminal Liability Discussion Paper 1999



Footnotes

Footnote: 1 For convenience, this paper will variously use the terms "moral person", "corporation", "company" or "organization" in referring to the criminal activities of corporations. However, the issue of which organizations should be held criminally liable will be the subject of a later discussion.

Footnote: 2
For a summary of the major objections advanced in opposition to recognizing corporate criminal liability, see J. Groia and L. Adams, "Searching for a Soul to Damn and a Body to Kick: The Liability of Corporate Officers and Directors" (1990) Meredith Mem. Lect. 127. See also J.C. Coffee, "'No Soul to Damn: No Body to Kick': An Unscandalized Inquiry Into The Problem of Corporate Punishment" (1981) Michigan L. Rev. 386.

Footnote: 3
See, in particular, C. Wells, Corporations and Criminal Responsibility (Oxford: Clarendon Press, 1993), at 19.

Footnote: 4 Indeed, the criminal liability of corporations should be contemplated only if some valid penological objectives can realistically be attained. Brent Fisse has explored the issue in the greatest depth. In his view, the necessary objective of corporation criminal liability is essentially to encourage corporations to become better citizens, to make them more attentive to compliance with the law, primarily in the interest of averting the occurrence of harm. The very notion of corporate fault should be informed by these objectives, he says. See B. Fisse, "Criminal Law: The Attribution of Liability to Corporations: A Statutory Model" (1991) 13 Sydney L.R. 277; B. Fisse, "Reconstructing Corporate Criminal Law: Deterrence, Retribution, Fault, and Sanctions" (1983) 56 South. Cal. L. R. 1141, at 1145ff.

See also C. Wells, Corporations and Criminal Responsibility, supra note 3, at 17ff.; J. C. Coffee, supra note 1; D. Bergman, "Corporate Sanctions and Corporate Probation", (1992) 142 New Law Journal, 1312; C. Kennedy, "Criminal Sentences for Corporations: Alternative Fining Mechanisms", (1985) 73 Calif. L. Rev. 443; Law Reform Commission of Canada, Criminal Responsibility for Group Action, Working Paper 16 (Ottawa, 1976), at 41ff; J. D. Wilson, "Re-thinking Penalties for Corporate Environmental Offenders: A View of the Law Reform Commission of Canada's Sentencing in Environmental Cases", (1986) 31 McGill L.J., 313. Finally, see D. Hanna, "Corporate Criminal Liability", (1988-89) 31 Crim. L. Q. 452, 474 to 479.

Footnote: 5
In Canadian Dredge & Dock Co. v. The Queen, [1985] 1 S.C.R. 662, Estey J. provides a brief historical account of the importation of this common law doctrine. See also L. H. Leigh, "The Criminal Liability of Corporations and Other Groups", (1977) 9 Ottawa L. Rev. 246.

Footnote: 6
See, for example, L. LEIGH, "The Criminal Liability of Corporations and Other Groups: A Comparative View", (1981-82) 80 Michigan L. Rev. 1508, 1513-1514.

Footnote: 7 See C.D. Stone, "The Place of Enterprise Liability in the Control of Corporate Conduct", (1980) 90 Yale L.J., at 7, note 27.

Footnote: 8
See especially Egan v. U.S., 137 F.2d 369 (1943) (8th Cir. C.A.), followed in U.S. v. Basic Construction, 711 F.2d 570 (1983) (5th Cir. C.A.). It should be noted, however, that the state courts, unlike their federal counterparts, clearly prefer to base corporate liability on an identification theory directly inspired by the British cases. See, in particular, People v. Canadian Fur Trappers Corp., 248 N.Y. 159 (1928) (N.Y.C.A.). For a succinct summary of the current situation in the United States, see C. Wells, supra note 3, at 116-20.

For a brief explanation of the disagreements between the U.S. federal and state courts, see the summary by Estey J. in Canadian Dredge, supra note 5, at 686-88.

Footnote: 9
Supra note 5.

Footnote: 10 [1990] 2 S.C.R. 217.

Footnote: 11
D. Hanna, supra note 4, is of the same opinion, at 457-58. In Canadian Dredge, supra note 5, Estey J. acknowledges the relationship between the identification theory and the vicarious liability theory. He states, at 692:

Thus where the defendant is corporate the common law has become pragmatic, as we have seen, and a modified and limited "vicarious liability" through the identification doctrine has emerged.

See also C.T. Asplund, "Corporate Criminality: A Riddle Wrapped in a Mystery Inside an Enigma" (1985) 45 C.R. (3d) 333, at 336.

Footnote: 12
[1992] 1 S.C.R. 843.

Footnote: 13
Idem, at 855.

Footnote: 14
See R. v. Big M Drug Mart, [1985] 1 S.C.R. 295 and Dywidag Systems v. Zutphen Brothers Construction, [1990] 1 S.C.R. 705.

Footnote: 15
R. v. Wholesale Travel Group Inc., [1991] 3 S.C.R. 154, at 181 (per Lamer C.J.). Similar considerations would apply in the context of the section 1 analysis: see discussion at 182-83 (per Lamer C.J.).

Footnote: 16 [1972] A.C. 154.

Footnote: 17 See G. Williams, Textbook of Criminal Law, (2d ed., 1983), 973; E.G. Ewaschuck, "Corporate Criminal Liability and Related Matters", (1975) 29 C.R.N.S. 44, at 52-52.

Footnote: 18
See, for example, "Note: Corporate Crime: Regulating Corporate Behavior Through Criminal Sanctions", (1978-79) 92 Harvard L.Rev. 1227, 1255. See also C. Wells, supra note 3, at 109 and B. Fisse and J. Braithwaite, "The Allocation of Responsibility for Corporate Crime: Individualism, Collectivism and Accountability", (1988) 11 Sydney L. Rev. 468, at 504-504.

Footnote: 19
Supra note 5.

Footnote: 20 Canadian Dredge & Dock Co. v. The Queen, supra note 5, at 693.

Footnote: 21
Idem, at 693.

Footnote: 22 [1993] 1 S.C.R. 497.

Footnote: 23
Idem, at 520-21.

Footnote: 24
Idem, at 523.

Footnote: 25
R. v. Safety-Kleen Canada Inc., (1998) 16 C.R. (5th) 90.

Footnote: 26 Idem, at 95.

Footnote: 27 Canadian Dredge, supra note 5, at 685.

Footnote: 28 Idem, at 686.

Footnote: 29
Idem, at 707.

Footnote: 30
See, for example, C. Wells, supra note 3, at 43ff; C. Wells, "Corporations: Culture, Risk and Criminal Liability", [1993] Crim. L.R. 551.

Footnote: 31 See, for example, S. Field and N. Jörg, "Corporate Liability and Manslaughter: Should we be Going Dutch?", [1991] Crim. L.R. 156.

Footnote: 32 The most influential writer, without doubt, is French. See French, "The Corporation as a Moral Person", (1979) 16 American Philosophical Quarterly 207 and French, Collective and Corporate Responsibility (New York: Columbia University Press, 1984). See also M. Dan-Cohen, Rights, Persons and Organizations (Berkeley: University of California Press, 1986). Also, see C.D. Stone, supra note 7 and B. Fisse and J. Braithwaite, supra note 18, at 483ff.

Footnote: 33 See, in particular, C.D. Stone, supra note 7. See also N. Sargent, "Law Ideology and Corporate Crime: A Critique of Instrumentalism", (1989) 4 CJLS/RCDS 39, at 54ff; C. Wells, Corporations and Criminal Responsibility, supra note 3; B. Fisse and J. Braithwaite, supra note 18, at 476ff. See also C. Tollefson, "Ideologies Clashing: Corporations, Criminal Law, and the Regulatory Offence", (1991) 29 Osgoode Hall L.J. 705.

Footnote: 34 P.H. Bucy, "Corporate Ethos: A Standard for Imposing Corporate Criminal Liability", (1991) 75 Minnesota L.R. 1095, at 1104ff. See also B. Fisse, "The Attribution of Criminal Liability to Corporations: A Statutory Model", (1991) 13 Sydney L.R. 277, who also notes, at 278, that the unfairness of vicarious liability may impede the development of effective sanctions.

Footnote: 35 See, for example, Note: "Corporate Crime: Regulating Corporate Behavior Through Criminal Sanctions", (1978-79) 92 Harvard L.Rev. 1227, at 1242:

Vicarious liability must be based on the act of a lone agent or on an assumption of shareholder control; the former is unfair and the latter is often untrue.

See also P.H. Bucy, supra note 34 at 1104:

Because the respondeat superior standard focuses solely on an individual corporate agent's intent and automatically imputes that intent to the corporation, a corporation's efforts to prevent such conduct are irrelevant. Under this approach all corporations, honest or dishonest, good or bad, are convicted if the government can prove that even one maverick employee committed criminal conduct.

Footnote: 36 [1972] A.C. 154.

Footnote: 37 Canadian Dredge & Dock Co. v. The Queen, supra note 5.

Footnote: 38 See, for example, P.H. Bucy, supra note 34, at 1105; C. Wells, "Corporate Liability and Consumer Protection: Tesco v. Natrass Revisited", 57 Modern L. Rev. 817, note 36. See also S. Field and N. JÃrg, supra note 31, at 158.

Footnote: 39
B. Fisse, "The attribution of Liability to Corporations", supra note 4, at 278. (Fisse, incidentally, notes that in the case of small businesses, the need for criminal proceedings against the corporation is doubtful.)

Footnote: 40
See, for example, P.H. Bucy, supra note 34, at 1100-01.

Footnote: 41 "Liability based on an individualistic model does not confront the reality of corporate decision-making. The identification doctrine applied to diffuse corporate structures can result in no-one being liable, or improperly reflect the limits of moral responsibility. Management priorities set from above determine the social context within which a corporation's shopfloor workers...make decisions about working practices. Liability should more closely reflect those organisational realities." C. Wells, supra note 38, at 820-21.

Footnote: 42 See, for example, J. C. Coffee, supra note 2; D. Hanna, supra note 4, at 471. See also C. Wells, Corporations and Criminal Responsibility, supra note 3, at 107-110 and 132. See also H. Bucy, supra

note 34, at 1105.

Footnote: 43 B. Fisse, "The Allocation of Criminal Responsibility", supra note 4, at 277, note 4, summarizes this situation as follows:

The Tesco principle also fails to reflect the concept of corporate blameworthiness. To prove fault on one managerial representative of a company is not to show that the company was at fault (the fact that a director or other top-level representative was at fault may suggest the presence of fault on a more widespread organisational basis, but fault on a more widespread organisational basis is not necessary to satisfy the Tesco principle). The Tesco principle thus imposes vicarious liability for the conduct or fault of a restricted range of representatives, namely high-level managers acting in the pursuit of corporate functions.

Footnote: 44 See especially C. D. Stone, supra note 7 and B. Fisse, "Corporate Criminal Responsibility", (1991) 15 Crim. L.J. 166; B. Fisse, "Criminal Law: The Attribution of Criminal Responsibility to Corporations: A Statutory Model", supra note 4; B. Fisse, "Reconstructing Corporate Criminal Law: Deterrence, Retribution, Fault and Sanctions", supra note 4. See also B. Fisse and J. Braithwaite, supra note 7, at 479 and R. N. Purvis, Corporate Crime, Butterworth, Sydney, 1979. See, further, C. Wells, Corporate Criminal Responsibility, supra note 3, at pp.65ff.

Footnote: 45 B. Fisse and J. Braithwaite, supra note 18, at 479, state:

In the case of organisations, individuals may be the most important parts, but there are

other parts [...] Organisations are systems ("socio-technical" systems, as they have sometimes been described) not just aggregations of individuals. More crucially however, organisations consist of sets of expectations about how different kinds of problems should be resolved. These expectations are a residue of the individual expectations of many past and present members of the organisation. But they are also the product of the interplay among individuals' expectations which distinguish shared meanings from individuals' views. The interaction between individual and shared expectations, on the one hand, and the organisation's environment, on the other, constantly reproduces shared expectations. In other words, an organisation has a culture which is transmitted from one generation of organisational role encumbents to the next.[...]

The products of organisations are more than the sum of the products of individual actions. . . . The collective action is thus qualitatively different from the human actions which, in part, constitute it. [notes omitted]

Footnote: 46 S. Field and N. JÃrg, supra note 31, at 159 (notes omitted).

Footnote: 47
See, among others, M. McDonald, "The Personless Paradigm", (1987) 37 U. of Toronto L.J. 212, at 217-218.

Footnote: 48 The precursor of this notion appears to be French, whose works are considered to reflect the most widely accepted organizational theories. See French, supra note 32.

Footnote: 49 In Canadian Dredge, supra note 5, Estey J. clearly acknowledges this:

The position of the corporation in criminal law has been under examination by courts and law makers for centuries. The questions which arise are manifold and complex. They are not likely to be answered in a permanent or universal sense in this appeal, or indeed by the courts acting alone. Proceeding through the history of these issues in the criminal law adds perspective but no clear answer to the problem. [p. 676]

Footnote: 50
Idem, at 673-74.

Footnote: 51
Idem, at 674.

Footnote: 52
D. Stuart, Canadian Criminal Law, A Treatise (3rd ed.) (Toronto: Carswell, 1995) at 577.

Footnote: 53
R. v. Sault Ste. Marie, [1978] 2 S.C.R. 1299, at 1331.

Footnote: 54
For a short discussion of the difficulties that emerge in relation to corporate liability for offences that are neither absolute liability nor complete mens rea offences, see C. Wells, "A quiet revolution in corporate liability for crime" (1995) N.L.J. 1326. Wells reports that some English courts are attempting to remedy this situation by developing new theories on which to base corporate liability in such cases.

Footnote: 55
J. Quaid, "The Assessment of Corporate Criminal Liability on the Basis of Corporate Identity: An Analysis", (1998) 43 McGill L.J.67, at 90.

Footnote: 56 Law Commission, A Criminal Code for England and Wales, Report 177 (London: HMSO, 1989).

Footnote: 57
In section 30(3)(a) of the Draft Code, the "controlling officer" is defined as follows:

"Controlling officer" of a corporation means a person participating in the control of the corporation in the capacity of a director, manager, secretary or other similar officer (whether or not he was, or was validly, appointed to any such office).

Footnote: 58
American Law Institute, Model Penal Code (Philadelphia, 1962).

Footnote: 59
It should be noted that in the United States, as in England, the intermediate class of strict liability regulatory offences, as elaborated in the Sault Ste. Marie decision by the Supreme Court of Canada, does not exist as such. "Strict liability offences" correspond, therefore, to what we characterize in Canadian law as absolute liability offences.

Footnote: 60
Supra note 4.

Footnote: 61
Law Reform Commission of Canada, Recodifying Criminal Law, Report 31 (Ottawa, 1986).

Footnote: 62 Ibid., at 27.

Footnote: 63 Canadian Dredge, supra note 5, at 675-76.

Footnote: 64 Law 92-683 of 22 July 1992.

Footnote: 65
See J. Pradel, Le nouveau Code pÃnal (partie gÃnÃrale) (Paris: Dalloz, 1994), at 115.

Footnote: 66
S. Davis, Managing Corporate Culture, (1984) quoted in H. Bucy, supra note 34, at 1123, note 115.

Footnote: 67 For example, it might be said that a particular company has a culture that is more aggressive than others in marketing its products, or that the corporate culture of a business facilitates employees in reconciling their professional life with their family life.

Footnote: 68 See, for example, S. Field and N. JÃrg, supra note 31, at 161.

Footnote: 69 See, for example, P.H. Bucy, supra note 34, at 1129-1130.

Footnote: 70 S. Field and N. JÃrg, supra note 31, at 165.

Footnote: 71 P.H. Bucy, supra note 34, at 1133, expresses this idea as follows:

When considering the corporate goals, the factfinder should examine whether the goals set by the corporation for the relevant division, subsidiary, or employee promote lawful behavior or are so unrealistic that they encourage illegal behavior.

See also S. Field and N. JÃrg, supra note 31, at 166.

Footnote: 72
S. Field and N. JÃrg, supra note 6, at 166-67. -

Footnote: 73 H. Bucy, supra note 34, at 1146, 1147.

Footnote: 74 S. Field and N. JÃrg, supra note 31, at 166 (notes omitted).

Footnote: 75 See, for example, C.T. Asplund, supra note 11.

Footnote: 76

August 1999


Next Annual Meeting

2018 Conference (Centennial)

Delta Hotel

Québec City, QC

August 12 - 16, 2018