criminal liability of corporate entities

Criminal Liability of Corporate Entities (Companies) in Nigeria – Inioluwa Olaposi

Criminal Liability of Corporate Entities in Nigeria and Other Jurisdictions

Previously at Common law, it was believed that corporate entities cannot be liable for criminal offences, because they lack any mental calculations for the satisfaction of mens rea, neither can they be subjected to imprisonment of corporal punishment. Corporate entities were only criminally liable for acts of nonfeasance. Later, it was extended to misfeasance acts.

However, presently under common law, corporate entities are liable for acts involving criminal liabilities with limitation to acts like assault, manslaughter, murder, and rape. According to Stephen Griffin in Griffith v. Strudebraker, (1924), “a corporate entity may not be convicted of murder or manslaughter as the sentence for that offence, namely, a mandatory penalty of death or life imprisonment respectively, is incapable of being imposed against an artificial entity.”

Also, Stable J. in Moore v. Brestlet ltd (1944) states as follows, “….perjury and offence which cannot be vicariously committed or bigamy…..offences of which murder is an example, where the only punishment the court can impose is corporal, the basis of which the exception rests being that the court will not stultify itself by embarking on a trial in which if a verdict of guilty is returned, no effective order by way of sentence can be made.”

Furthermore, in the words of Smith and Hogan (2002), “Since a corporation is a creature of law, it can only do such acts as it is legally empowered to do, so that any crime is necessarily ultra vires and the corporation having neither body nor mind, cannot perform the acts or form the intent which are prerequisite of criminal liability.”

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The Nigerian legal system, as fashioned in line with the English system, adopts the common law position to the effect that corporations can be criminally liable but not for all offences.

It is noteworthy that it is difficult to say if the Criminal or Penal Code of Nigeria contains any explicit provision in relation to the process of enforcing criminal liability on corporate entities.

In Attorney-General (Eastern Nigeria) v. Amalgamated Press the court, per Ainley, CJ., stated that a company cannot be charged with an offence for which imprisonment is the only available punishment. However, there are only few punishments which are strictly fixed by law. Therefore, the court has applied the payment of a fine as an alternative in many cases. (Thus, in R v. Service Press Ltd, the court imposed a fine for the punishment of contempt of court, in place of imprisonment.)

See also: Corporate Liability in civil matters (Nigeria)

Statutory Liability

While the common law doctrines of vicarious liability and identification theory are applicable in Nigeria, the state of criminal liability of corporate entities is better approached from the standpoint of statutory liabilities.

There are many statutes in Nigeria, both of federal and state legislations, that impose liability on corporate entities. Such statutory-created offences are often strict liability offences – i.e. they allow the acquisition of criminal liability without the need to prove any fault on the part of the committer.

Such statutes include the Food and Drug Act; Standard Organization of Nigerian Act; Dangerous Drug Act, The Consumer Protection Council Act, The Environmental Sanitation Edict of Edo State, Oil in Navigable Waters Act, etc.

In such a way as analyzed by the facts under discussion, a company can be found guilty of a criminal offence in Nigeria. Therefore, in R v Zik Press (1947) a corporate entity was found guilty of an offence of contravening Section 51(1)(c) of the Nigerian Criminal Code Act. Similarly, in Mandilas & Karaberis v. COP (1958), a corporation was convicted of the offence of stealing by conversion under sections 390 and 383 of the Nigerian Criminal Code Act.

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Other Jurisdictions

Nigeria is not alone in this imbroglio. Other jurisdictions are also providing ways of dealing with this challenge.

In the United Kingdom, companies are made liable for the offence of manslaughter associated with gross negligence through the promulgation of the Corporate Manslaughter and Corporate Homicide Act (CMCHA) 2007. Also, this act seeks to provide for the prosecution of companies when there are fatal consequences resulting from gross failure in the organization, particularly in relation to the management of health and safety.

The principle of criminal liability under the federal laws of the United States of America is based on the doctrine of respondeat superior or vicarious liability and aggregation doctrine. In United States v. Hilton Hotels Corporation, the court relied on the respondeat superior doctrine in arriving at its decision. This principle is such that the action of an employee – within the scope of his employment – is taken directly as that of the corporation. Therefore, the company is liable if the employee commits a crime.

Conclusion

Corporate crimes exist, and they are committed like ‘private’ crimes. The determination of liability of corporate entities is dependent on the available laws of any jurisdiction.

In the Nigerian scenario, it is difficult to affirm that the major statutes of criminal enquiries – i.e. the Criminal and Penal codes, contain any solution to the challenge of determining the culpability of companies in criminal matters. In the light of this, we must resort to particular statutory liabilities for such a determination.

However, it is recommended, in view of the prominent disasters including petroleum oil pipe and gas explosions, sea disasters, and collapsed buildings, that the Nigerian state should introduce an offence of corporate manslaughter, to ensure more preservation of lives and properties going forward.

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