Corporate Criminal Liability Conundrum: A Comparative Analysis

Introduction

The concept of criminal liability for corporations may be traced back to ancient legal precedents, and around the end of the 19th century, it became the focus of doctrinal arguments. The distinct national histories, legal systems, economic conditions, and political environments of each country have had a significant impact on the conceptualization, as well as the subsequent evolution, of the idea of corporation criminal liability. In contrast to how it developed in common law systems, the idea of criminal responsibility for corporations has progressed very differently in civil law systems. In a similar manner, the concept of criminal responsibility for corporations has evolved differently within the frameworks of common law and civil law to account for the historical events and current socioeconomic situations of a variety of countries. The development of corporate criminal liability over the course of time demonstrates that it is in line not only with the core principles of criminal law but also with the essential nature of companies.

Early in evolution of Roman law, the capacity people had to form commercial, religious, and charitable organizations was recognized. Despite the belief that these associations lacked free will and were legal fictions according to Roman theory, the following entities existed, nonetheless. Creation of autonomous entities with obligations as well as rights served as the basis for the growth of corporate organizations in the mediaeval period. Later, among the twelfth and fourteenth centuries, the concept of corporate criminal liability arose.

The idea originated acknowledged that businesses had their own free will, which led to the subsequent imposition of criminal liability. It was possible for a corporation to commit every crime that a person could, with a few exceptions including bigamy, rape, and other similar offences. This was the case even if the conduct in question had nothing at all to do with the purpose for which the corporate body was created. The preceding concept was deeply ingrained in the way people thought across continental Europe up to the end of the 18th century.

The mediaeval concept was built on the idea that all businesses should be held liable for the civil and criminal offences committed by its members. This conception underpinned the foundation of the mediaeval concept. During the 16th and 17th centuries, commercial enterprises mushroomed and rose to prominence in economic and social life. The need to rein in corporate wrongdoing grew as time went on. Companies are considered "legal persons" in their own right, having their own identities and sets of assets that are distinct from those of their shareholders. In the 1840s, corporate criminal liability in England began when the courts held corporations accountable for violations of strict liability. Using the concept of vicarious liability from tort law, courts quickly began to impose criminal liability on corporations in cases where natural individuals may also be held vicariously liable. The High Court of Justice ruled in 1944 that companies had direct criminal accountability and that certain employees' men’s rea should be taken into account along with the company's own.

Due to the lack of precise and organized criteria for assigning the men’s rea element to businesses, the judgements' justifications were ambiguous and difficult to understand. This matter was made clear in a case in which the civil law alter ego doctrine was applied to hold companies criminally liable; this is now referred to as "identification theory." Initially following the English model, the United States later changed and advanced more quickly because of the significance of companies to the American economy and society. The American courts were far quicker to find companies criminally accountable than the English or Indian courts were. Similar defences against corporate criminal liability were initially championed by American courts.