'Corporate Culture' as a Basis for the Criminal Liability of Corporations

The Australian law firm of Allens Arthur Robinson has recently prepared a study for the United Nations Special Representative of the Secretary-General on Human Rights and Business that examines the way different jurisdictions have contemplated the basis for corporate criminal liability.

The study is entitled " 'Corporate Culture' as a Basis for the Criminal Liability of Corporations ":

"The traditional approach to corporate criminal liability has focused on the relation between the corporation and its employees and agents, and developed a legal fiction that the state of mind of employees and agents can be said to be the state of mind of the corporate entity. There are two main variations to this approach. Under the 'identification' model that is used in, for example, the UK and Canada, the corporation is held directly liable for wrongful conduct engaged in by senior officers and employees on the basis that the state of mind of the senior employee was the state of mind of the corporation. Under the vicarious liability model that is used in the US, the corporation is indirectly liable on the basis that the state of mind of the individual is, in certain circumstances, imputed to the corporation."

"There are several difficulties to the traditional approach from a prosecutorial perspective. It provides for 'derivative' liability in the sense that corporations can only be culpable if the
liability of an individual is established. From a practical perspective, it can be very difficult to identify the employee who committed the wrongful act or had the culpable state of mind.
From a conceptual perspective, this approach does not reflect the complex interactions between human actors and the corporate matrix."

"Recently, some jurisdictions have contemplated a new basis for criminal liability – 'organisational liability' – that has the potential to address this interaction more squarely. Australia, in particular, has introduced provisions holding corporations directly liable for criminal offences in circumstances where features of the organisation of a corporation, including its 'corporate culture', directed, encouraged, tolerated or led to the commission of the offence."

Among the jurisdictions compared are: Australia, UK, Canada, United States, Switzerland, Finland, Japan, Austria, Belgium, South Africa, and many more.