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Printable version
Amendments to Criminal Code expand corporate criminal liability
Bill C-45 received Royal
Assent on November 7, 2003 and will be proclaimed into law in early 2004. The
Bill amends the Criminal Code to expand the liability of organizations,
including corporations. The proposed legislation reflects the Federal
Government’s response, issued in November 2002, to the 15th report
of the Standing Committee on Justice and Human Rights, dealing with workplace
safety and corporate liability. The Standing Committee’s report in turn
followed on the report of the Westray Mine Public Inquiry, which called on the
Government to toughen the legislation so as to increase corporate
accountability for workplace accidents. In
cases of serious workplace accidents, companies could face extremely
substantial fines, while senior officers could be liable to a maximum prison
terms of life, where death results, and 10 years where the accident results in
bodily harm. Corporations could also face conviction due to the conduct of
contractors they engage to perform work on their behalf.
"ORGANIZATIONS"
As noted above, the new
liability provisions apply in respect of "organizations", a defined term in the
Bill meaning:
- A public body, body corporate,
society, company, firm, partnership, trade union or municipality, or
- An association of persons that is
created for a common purpose, has an operational structure, and holds itself
out to the public as an association of persons.
Thus, although the potential
liability of corporations has received the most attention, the new provisions
apply to a much broader range of entities.
BEYOND THE "DIRECTING MINDS"
Currently, for a corporation
to be held criminally liable, the crime must be committed by senior officials
with decision-making authority on matters of corporate policy, the so-called
"directing minds" of the company, usually directors. The Government intends to
expand the range of individuals whose actions can engage the liability of the
corporation to individuals referred to as "senior officers", defined to mean
those in an organization who play "an important role in the establishment of
the organization’s policies or [are] responsible for managing an
important aspect of the organization’s activities" [emphasis added]. This term
is broad enough to catch employees who exercise delegated operational (as
opposed to policy-making) authority.
SUBJECTIVE INTENT OFFENCES
For those offences requiring
a higher level of criminal intent than negligence, the Government believes that
corporations should be liable in a range of circumstances where a senior
officer acts with at least some intent to benefit the corporation. Accordingly,
in respect of subjective intent offences, organizations will be held liable
where a senior officer, acting with at least the partial intent of benefiting
the organization:
- commits the offence;
- with sufficient intent for the
offence, directs others in the organization to commit the offence; or
- fails to take action to stop
others in the organization whom the senior officer knows are committing or are
about to commit the offence.
NEGLIGENCE OFFENCES
Where the offence in question
requires only that the negligence of the accused be proved, the Government
states that the corporation should be liable for the cumulative fault of several
employees and officers, each of whom may have contributed to the end result.
In order to achieve this policy objective, the Bill provides that for
negligence offences, an organization will be held liable where:
- One or more senior officers should
have known that the offence was being committed, or failed to take reasonable
measures to prevent the offence from being committed, and
- someone in the organization
commits the offence, or
- more than one person in the
organization engages in conduct such that, had it been the conduct of one
person, that person would have committed the offence.
The Government states that
these provisions will result in corporate criminal responsibility where, taken
as a whole, the acts of senior officers and other employees demonstrate a lack
of care amounting to criminal negligence.
LEGAL DUTY TO PREVENT HARM TO EMPLOYEES AND THE PUBLIC
The Government proposes to
create a positive duty on employers and those with the power to direct how
others work to take reasonable steps to ensure the safety of the persons
performing the work and of the public. This reflects the Government’s view
that, rather than creating new criminal offences specific to corporations, the
way to address public concerns about regulating workplace safety is to build on
the existing Criminal Code provisions regarding criminal negligence.
For further
information, please contact David Law at (613) 940-2738.
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