A Fresh Insight into the Corporate Criminal Mind
| Published date | 01 February 1996 |
| DOI | https://doi.org/10.1108/eb025736 |
| Pages | 362-366 |
| Date | 01 February 1996 |
| Author | Simon P. Robert‐Tissot |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 3 No. 4 — Securities
SECURITIES
A Fresh Insight into the Corporate Criminal Mind
Simon P. Robert-Tissot
As the commercial activities undertaken by com-
panies have a deeper impact on our lives, it has
been recognised as increasingly important to con-
trol corporate activities. Control is provided by the
criminal law and by statutory or quasi statutory
regulation whose purpose is to outlaw corporate
activity considered unacceptable in order to protect
employees, the environment, investors, or other
sections of the general public.
The criminal law when applied to individuals
considers their actions and their intent. In the
same way the application of principles from the
criminal law against companies focuses on the
activities and intentions of the company itself
rather than those of its agents. For a criminal
offence to be established against a company it is
necessary for the required
actus reus
and
mens rea
of
the offences to be proved against the company
itself by evidence admissible against the company.
This gives rise to the difficulty that has always
been encountered in considering whether a com-
pany has committed a criminal offence. How can
the acts and intentions of the company itself as
opposed to those of its servants and agents be
identified?
A company does not have a physical presence
that can be watched and interrogated. It is no more
than a metaphysical construct formed by a collec-
tion of rights and duties. Most companies arc
formed under a statute which provides the legal
framework, and their activities are organised by
their constitutions. They act through their officers,
servants and agents. Whose actions and whose
thoughts are to be judged to be those of the com-
pany
itself,
as opposed to its agents?
When a company makes contracts, or enters into
relationships with individuals or other companies,
the problem docs not arise. The normal rules of
agency enable it to enter into contracts through
agents with actual or ostensible authority. The
principle of vicarious liability enables the victim of
a tort committed by a company's employee to hold
the company responsible where the tort was com-
mitted by the company's servant in the course of
his or her employment. With questions of civil
liability the law is considering the consequences of
the company's activities. Normally the consequen-
ces are purely financial. A court does not need to
consider whether the activity was decided on and
performed by the company
itself,
or by agents of
the company answering to it. The question is
merely what financial liabilities result.
The rules that fix a company with criminal or
regulatory liability are less well developed than
those that determine civil liability. The fact that a
company can be criminally liable even if the
offence involves proof of
a
state of mind has been
well established for most of this century, although
difficulties were perceived in early cases: a com-
pany could not form the state of mind that was
required by the common law to commit a criminal
offence, and a company did not owe social duties.
In general the criminal liability of companies
developed by way of statutory offences involving
strict liability in which these problems did not
arise.
Prosecutions for offences involving specific
intent were rare. The first prosecution against a
company for manslaughter was not until the 1960s.
It failed on the facts and as recently as 1987 the
Court of Appeal in R v HM
Coroner
for East Kent
ex. p.
Spooner
and Others1 was only tentative in the
view that a company could form the mens
rea
for
manslaughter. Later Turner J confirmed that a
company could when the prosecution arising out
of the same incident came before him in P&O
European Ferries (Dover)
Ltd.2
Since then, in 1994, a
company has been convicted of manslaughter
relating to the Lyme Bay canoe case.
The principles which determined which acts and
thoughts of the many different officers and ser-
vants acting on behalf of
a
company can be attrib-
uted to the company were those set out by the
House of Lords in Tesco
Supermarkets
Ltd v Nat-
trass.3 They received approval in the House of
Lords as recently as March 1994 in
Seaboard
Off-
shore
Ltd v
Secretary
of State for Transport.4
Page 362
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