Corporate Crime (Crimes, Liability, Theories) – Inioluwa Olaposi
Crimes and Criminal Responsibility
Crimes, often considered public, are frowned at in every society.
Every conduct that pose significant threat to the inhabitant of any community is treated with serious consideration, and carefulness. Little wonder the prohibition of crimes flow with attending consequences.
According to Richard Quinney , an American sociologist, “crime is a definition of human conduct that is created by authorized agents in a politically organized society.”
Also, the authors – Okonkwo and Naish – defined a crime as “those breaches of the law resulting in special accusatorial procedure controlled by the state and liable to sanction over and above compensation and cost.”
Generally, the object of a criminal proceeding, that also differentiates it from a civil proceeding’ is punishment. The Nigerian Criminal Code Act, operative in the southern region of the country, states that an act or omission which renders the person doing the act or making the omission liable to punishment under the Code, or under any Act, or law, is called an offence.
This is also evident in the dictum of Lord Atkin in Proprietary Articles Trade Association v. Attorney General for Canada [1931] AC 310 at 324, where he mentioned that, “The criminal quality of an act cannot be ascertained by intuition; nor can it be discovered by reference to any standard but one: Is the act prohibited with penal consequences?”
Punishments ranges from one offence to another, and may be classified for academic purposes. Significantly, an accused is convicted in court proceedings before he is subdued to provided punishments. The process of conviction requires finding the accused guilty of the offence. Being guilty of an offence goes beyond mere commission. ‘A’ might have committed an offence against ‘C’, without being necessarily guilty for it. If, for example, ‘A’, while trying to shoot at ‘B’, was found to have actually shot at ‘C’(who was out of sight), ‘A’ has committed homicide, but not guilty of murder against ‘C’ .
Therefore, necessary for acquiring liability of many offences is not just the commission, but responsibility for the offence. In other words, an accused must not just be liable for commission, but must be culpable. This culpability is dependent on the mental element of the offence – whether intentionally, recklessly, negligently, accidentally, unconsciously, or otherwise.
Corporate Crimes
Crimes may be segmented based on different forms of classifications. Perhaps, according to their nature, punishment attributed, or personality involved.
Corporate crimes are defined as illegal acts, omissions or commissions by corporate organisations as social or legal entities, or by officials and employees of the corporations acting in accordance with the operative goals or standard, operating procedures and cultural norms of the organisation, intended to benefit the corporations themselves.
These crimes are also referred to as ‘White Collar Crimes.’ They are performed by corporate entities or by individuals acting on behalf of corporate entities, and usually for the benefit of the company.
Asha (2012) notes that, Corporate Crime, known and identified by several different names like “Corporate Frauds”, “Business Crime”, “White-collor Crimes”, “Corporate misconduct”, “Corporate misbehavior”, can take a turn out to being harmful to the environment, employees, consumers or society at large.
The possibility of corporate crimes is the fundamental root of this discourse. Crimes of different gravities are capable of being committed by individuals, as well as corporate entities. In the former, the liability is determined based usually on the completion and fulfilment of the physical and mental elements of the offence(s).
However, how can liability come to play in a crime committed by a corporate entity that can not be said to have mentally be involved in anything? Who should we hold responsible for such (as it is in Nigeria) felonies, misdemeanors, or simple offences, committed by a corporate entity? Or more fundamentally, should the entity be liable at all?
Theories of Corporate Criminal Liability
Basically, there are two identifiable theories of corporate criminal liability, namely: the identification theory, and the respondeat superior theory.
The identification theory is also known as the alter ego theory. Under the theory, the acts of high-ranking officials of a company, within the scope of their employment, is seen as those of the company itself. Developed by English law, this theory is a child of civil law of tort.
The doctrine of identification has its root in Lernards Carrying Company Limited v. Asiatic Petroleum Company Limited – a civil case, where Viscount Haldane noted that, “corporation is an abstraction, its active mind and directing will must consequently be sought in the person who is really the very ego and centre of the personality of the corporation.”
The rationale behind this theory is simple. The officials of a company are the brain behind its activities. It is their decisions that are carried as the dealings of the business. And they do not just act arbitrarily as such, but the company has entrusted them with the authority to make such decisions on its behalf. Therefore, the mens rea of these high-ranking officials is that of the company itself. This category of officials includes the board of directors, the managing directors, and other persons responsible for the management of the company. The Identification theory can also be seen in Tesco Supermarkets Ltd. v. Nattrass .
On the other hand, under the respondeat superior theory the company is responsible for strict liability offences, or for offences for which expressly or impliedly provides for indirect liability, i.e. the principle of vicarious liability whereby the acts of an employee or subordinate is taken as that of the employer – in this case, the company. The actus reus and mens rea of an official is automatically those of the cooperate entity, in the commission of a crime, within the scope of his employment.