NCJ Number
52501
Journal
Journal of Criminal Law and Criminology Volume: 69 Issue: 1 Dated: (1978) Pages: 75-91
Date Published
1978
Length
17 pages
Annotation
AN APPROACH TO IMPOSING CRIMINAL LIABILITY FOR VIOLATIONS OF REGULATORY LAWS ON INDIVIDUAL CORPORATE EXECUTIVES WITHOUT DEBASING THE TRADITIONAL PURPOSE BEHIND CRIMINAL LIABILITY IS DEVELOPED.
Abstract
MANY COURTS AND LEGISLATURES HAVE TRIED TO MAKE THE REGULATION OF CORPORATE BEHAVIOR MORE EFFECTIVE BY CREATING CRIMINAL LIABILITY FOR BOTH THE CORPORATION AND THE INDIVIDUAL OFFICERS OF THE CORPORATION. DISPENSING WITH TRADITIONAL NOTIONS (INDIVIDUAL RESPONSIBILITY AND MENS REA) UNDERLYING CRIMINAL LIABILITY, THE COURTS HAVE CREATED A DOCTRINE OF VICARIOUS LIABILITY, UNDER WHICH CRIMINAL RESPONSIBILITY IS DETERMINED SOLELY ON THE BASIS OF THE INDIVIDUAL'S RELATIONSHIP TO THE CORPORATE OFFENDER. FOR EXAMPLE, THE U.S. SUPREME COURT HAS INDICATED IN A SERIES OF DECISIONS THAT THE CRIMINAL PROVISIONS OF THE FOOD, DRUG AND COSMETIC ACT MAY BE APPLIED TO A CORPORATE OFFICER ON THE BASIS OF THE OFFICER'S RELATIONSHIP TO THE CORPORATE OFFENDER AND WITHOUT REGARD TO INTENT OR KNOWLEDGE ON THE PART OF THE OFFICER. BY FAILING TO CONSIDER CAREFULLY THE CONTEXT IN WHICH CORPORATE CRIMES ARE COMMITTED (PARTICULARLY THE EXTENT TO WHICH TOP EXECUTIVES USUALLY ARE IGNORANT OF A CORPORATION'S DAY-TO-DAY OPERATIONS), THE COURTS HAVE DEVELOPED AN UNNECESSARY DOCTRINE THAT NOT ONLY UNDERMINES THE CONCEPT OF INDIVIDUAL RESPONSIBILITY BUT IS ILL SUITED TO ACCOMPLISH THE OBJECTIVES OF REGULATORY LEGISLATION. WHAT IS NEEDED IS A RATIONAL SYSTEM OF LIABILITY WHICH TAKES INTO ACCOUNT THE CORPORATE SETTING AND USES IT TO BENEFIT BOTH THE CORPORATION AND THE LAW. EITHER LEGISLATIVELY OR JUDICIALLY, A GENERAL RULE SHOULD BE ESTABLISHED THAT, WHEN A REQUIREMENT IS IMPOSED ON A CORPORATION, THE CHIEF EXECUTIVE MUST INSTITUTE THE NECESSARY SYSTEM WITHIN THE COMPANY TO INSURE COMPLIANCE. THE CHIEF EXECUTIVE WOULD BE CRIMINALLY RESPONSIBLE FOR NONCOMPLIANCE ONLY TO THE EXTENT THAT HE OR SHE HAD FAILED TO ESTABLISH SUCH A SYSTEM. OTHERS WOULD SHARE THE LIABILITY TO THE EXTENT THAT THEY HAD FAILED TO CARRY OUT THEIR FUNCTIONS WITHIN THE SYSTEM ESTABLISHED BY THE CHIEF EXECUTIVE. WITH THIS APPROACH, THE CORPORATE STRUCTURE WORKS TO THE ADVANTAGE OF, RATHER THAN AT CROSS PURPOSES WITH, THE LAW. MORE IMPORTANTLY, THE NEED TO ABROGATE TRADITIONAL REQUIREMENTS OF CRIMINAL LIABILITY IN DEALING WITH CORPORATE WRONGDOING IS ELIMINATED. (LKM)