House of Lords
| DOI | 10.1177/002201839505900203 |
| Published date | 01 May 1995 |
| Date | 01 May 1995 |
| Subject Matter | House of Lords |
HOUSE
OF
LORDS
CORPORATE LIABILITY FOR CRIME AND FOR CONTEMPT
Re Supply
of
Ready Mixed Concrete (No 2)
Notwithstanding the wealth of authority which is cited on any occasion on
which a question is raised as to the limits within which a corporation is to
be held liable for a criminal offence or for contempt of court, the extra-
judicial literature has, in recent years, outstripped it, at least in bulk. A
perusal of the authorities and of the accompanying literature leads to at
least one clear
conclusion-that
the English courts have shown a degree of
caution greater than that displayed in the rest of the common law world
when determining the limits within which criminal sanctions are applicable
in the case of wrongdoing by or on behalf of a corporation. The American
courts have shown that they are prepared to punish corporations in
circumstances in which it might be thought aprosecution would not be
contemplated, let alone successful, in England. There are a number of
factors relied on by the English courts which have contributed to this result.
First, there is the emphasis placed on the bedrock fact that acompany can
act only through its agents, so that those who speak of the 'organic'
nature of a company are regarded as deserting fact for fancy, by talking
metaphorically. Secondly, these agents are usually the company's employees
and the Englishcourts have accepted the distinctionbetween those employees
who are its 'brains' and those who are its 'hands', with the result that the
'hands' (the bulk
of
the employees) can rarely render a company liable to
criminal punishment. Moreover, on those occasions on which criminal
responsibility can be imposed only on proof of mens rea, the English courts'
refusal to 'aggregate' the pieces of knowledge which various employees (of
different grades) may have makes the proof of mens rea more difficult than
it appears to be in, say, North America. The ground upon which the
prosecutor has the best chance of success in the English courts is, therefore,
vicarious liability. That, of course, is an aspect of an employer's liability for
the acts of his servant and, logically, the doctrine should not make it any
the easier to bridge the gap between a human being (as employer) and a
company (as employer); but in fact, vicarious liability has been the ground
on which most successful prosecutions have been based.
The decision of the House of Lords (overruling that
of
the Court of
Appeal) in Re Supply
of
Ready Mixed Concrete (No 2)
[1994]
3 WLR 1249,
although concerned with a civil contempt of court in the form of a breach
of an injunction imposed to prevent restrictive practices, illustrates the
problems which face prosecutors also. The injunction had been obtained by
the Director General of Fair Trading restraining four companies from
enforcing certain agreements in breach of s 35(1) of the Restrictive Trade
Practices Act
1976.
The companies issued express instructions to their staffs
that the injunctions were to be obeyed, but certain employees, unknown to
'the management', made unlawful agreements to fix prices and allocate
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