Corporate Liability and Consumer Protection: Teseo v Nattrass Revisited

Publication Date01 Sep 1994
AuthorCelia Wells
DOIhttp://doi.org/10.1111/j.1468-2230.1994.tb01977.x
September
19941
Tesco
v
Nattrass Revisited
having to continue to rely on the courts (and voluntary codes) for the development
of relevant rules in this (and related) areas may not be sufficient to address the
needs of all parties affected by fraudulent transactions. The approach of the
majority judgment of the Court of Appeal, whilst trying to resolve a difficult
situation, is nevertheless inevitably limited in that it was unable to take a long-term
view of the possible consequences of its decision. If the law is allowed to continue
to develop in this pragmatic fashion, then decisions such as that considered here
may precipitate unwittingly a further decline in banker-customer relationships.
Corporate Liability and Consumer Protection:
Tesco
v
Nattrass
Revisited
Celia Wells*
Most people are familiar with the idea that there are two types of corporate liability
for crime, vicarious and direct. The general understanding is that the vicarious
type applies to strict liability offences and the direct type to offences requiring a
mental element. Little attention has been paid to how these fit with hybrid
offences, common in consumer protection legislation, which have a due diligence
or reasonable knowledge defence. Two recent cases have gone some way towards
dispelling some of the difficulties introduced in the House of Lords’ decision in
Tesco Supermarkets Ltd
v
Nuttruss,’
which applied direct liability principles to a
hybrid offence. Something much closer to the United States’ federal
respondeut
superior
rule would seem to have now been adopted for this type of offence as a
result of
Wurwickshire County Council
v
Johnson2
and
Tesco Stores Ltd
v
Brent
London Borough Council
.3
Part of the reason for the confusion to which
Tesco
v
Nuttruss
has given rise is
that neither the history of corporate criminal liability nor the actual issue of
statutory construction which it raised has been sufficiently highlighted. Instead, as
the only House of Lords decision discussing
alter
ego
liability, it has come to be
seen solely for its contribution to the definition of the limits of that doctrine. While
the two recent cases discussed here may have effectively resolved some of the
practical difficulty to which
Tesco
v
Nuttruss
gave rise in hybrid offences, they do
so
in an opaque and relatively indirect way.
The
History
Long before the
alter ego
species of liability was invented, companies had been
held capable of committing some, largely statutory, offences through the acts of
their employees. From about 1870 to 1930, the formative period
in
the
development of corporate liability for crime, courts were not particularly heedful
*Cardiff Law School.
1
119721
AC
153.
2 119931
1
All
ER
299.
The Divisional Court decision was noted by Peter Cartwright,
(1993)
56
MLR
227.
3 119931 2
All
ER
718
(QBD, DC). See also the discussion
of
Seaboard
Offshore
Lrd
v
Secrerary
ofSfare
[
19941 2
All
ER
99
(HL),
text below accompanying n
28.
0
The
Modern
Law
Review Limited
1994
817

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