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The Multiple Uncertainties of the Corporate Criminal Law

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Legal Certainty in a Contemporary Context

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Abstract

Corporate criminal law refers to the body of legal norms that imposes criminal liability on the corporation, rather than individual members of the corporation, such as directors, officers, managers or employees. This chapter begins by suggesting that the reach of corporate criminal law has greatly expanded over the last three decades. A second striking feature of recent corporate criminal law is the degree to which the substantive criminal law in this field is often plagued by a lack of legal certainty as to the scope of the offence. Examples of legal “uncertainty” are introduced from securities law and anti-corruption law. The chapter goes on to argue that the legal basis for the new corporate criminal law – the doctrine of corporate legal liability – is similarly characterized by uncertainties of various kinds. The discussion highlights how a concern with legal certainty seems to run up against other policy considerations, notably the pragmatic need to take meaningful action against corporate wrongdoing. The chapter concludes with the suggestion that in the context of contemporary corporate criminal law, the meaning of legal certainty has been transformed from a fundamental principle of criminal justice to one of a number of competing policy considerations that have to be resolved in responding to socially undesirable corporate behavior. The combined effect of this net-widening and legal “uncertainty” has been to greatly increase legal risk for companies and to provide a strong incentive to invest in internal governance mechanisms aimed at social enforcement, i.e. corporate compliance.

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Notes

  1. 1.

    For the early modern history of corporate criminal liability in English law, see Wells (2001).

  2. 2.

    Blackstone (1979), p. 464.

  3. 3.

    Wells (2001), ch. 2.

  4. 4.

    See, generally, Bernard (1984).

  5. 5.

    New York Central & Hudson River Railroad v. US, (1909) 212 U.S. 481.

  6. 6.

    For an important discussion of the principles underling the traditional continental European approach, see Leigh (1977).

  7. 7.

    On this controversy and marginalization more generally, see Hamdani and Klement (2008), Khanna (1996), Laufer (1994).

  8. 8.

    See Sutherland (1949) for the class statement of this position.

  9. 9.

    For more on this issue, see Orland (2007).

  10. 10.

    For the original formulation of net-widening, see Cohen (1985).

  11. 11.

    See Duber (2013).

  12. 12.

    See, Braithwaite and Drahos (2000) for a comprehensive overview.

  13. 13.

    For more on this issue, see Fenwick (2015).

  14. 14.

    On the new era of enforcement in corporate criminal law, see Koehler (2014).

  15. 15.

    See Green (2007), ch. 18.

  16. 16.

    For a review of recent case law, see Crimmins (2013).

  17. 17.

    On US law, see Koehler (2012). For the UK law, see Engle (2011).

  18. 18.

    15 U.S.C. §§ 78dd-1(f)(1)(A).

  19. 19.

    For other similar cases, see Juedes (2013), pp. 43–47.

  20. 20.

    For more on this trend, see Orland (2007).

  21. 21.

    For a comprehensive review, see Lederman (2000).

  22. 22.

    See the Supreme Court ruling in New York Central & Hudson River Railway Company v. United States 212 US 481 (1909).

  23. 23.

    Canada, Australia, Hong Kong & several US states also adopt variations on this approach.

  24. 24.

    Tesco Supermarkets Ltd. v. Natrass [1972] AC 153.

  25. 25.

    For a review of the Canadian situation, see Department of Justice (Canada), Corporate Criminal Liability Discussion Paper (2002); and for Hong Kong, Lau (2003). Australia is discussed below.

  26. 26.

    P&O European Ferries Ltd [1991] 93 Cr App Rep 72.

  27. 27.

    Attorney Generals Reference (No. 2 of 1999) [2000] QB 796. In this case, a rail company and the driver were both charged for offenses connected to serious rail accident near London. The driver was convicted but the court dismissed the case against the rail company on the grounds that there was no evidence that any corporate officers had engaged in any criminal act.

  28. 28.

    [1995] 3 All ER 918. Meridian involved the criminal acts of investment managers therefore the broader US standard was required in order to ensure a conviction against the company.

  29. 29.

    United States v. Bank of New England 821 F 2d 844 (1st Cir) (1987).

  30. 30.

    Gobert and Punch (2004), p. 84.

  31. 31.

    It is on this basis that aggregation was rejected by English courts , see Attorney Generals Reference (No. 2 of 1999) [2000] QB 796, p. 798.

  32. 32.

    For an extensive discussion of both English proposals and the Italian Law reform , see Gobert and Punch (2004), ch. 3.

  33. 33.

    Australian Federal Criminal Code 1995, section 12(c)(2).

  34. 34.

    Ibid. Section 12(c)(3).

  35. 35.

    For an excellent overview of these issues, see Khanna (1996).

  36. 36.

    See, for example, Laufer (1994).

  37. 37.

    See Simpson (2002).

  38. 38.

    Fisse (1983), p. 1160.

  39. 39.

    See Fenwick (2015).

  40. 40.

    See Simpson (2002).

  41. 41.

    See Bucy (1995), p. 693.

  42. 42.

    See Bharara (2007), p.73 (“[C]orporate defendants, subject as they are to market pressures, may not be able to survive indictment, much less conviction and sentencing”).

  43. 43.

    See Koehler (2012) for a comparative analysis of the compliance defense in different jurisdictions.

  44. 44.

    On the rise of the deferred prosecution agreement in the context of corporate criminal procedure , see Garrett (2014).

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  1. Faculty of Law, Kyushu University, Fukuoka, Japan

    Mark Fenwick

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  1. Faculty of Law, Kyushu University, Fukuoka, Fukuoka, Japan

    Mark Fenwick

  2. Faculty of Law, Kyushu University, Higashi-ku, Fukuoka, Fukuoka, Japan

    Stefan Wrbka

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Fenwick, M. (2016). The Multiple Uncertainties of the Corporate Criminal Law. In: Fenwick, M., Wrbka, S. (eds) Legal Certainty in a Contemporary Context. Springer, Singapore. https://doi.org/10.1007/978-981-10-0114-7_9

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