Corporate Criminal Liability: Developing a Legislative Model of Attribution

AuthorConor Davis
PositionLL.B. (Dub.), BL Candidate The Honorable Society of King's Inns
© 2017 Neil Murphy and Dublin University Law Society
As a fundamental principle of the common law, a company is a legal
person. An entity distinct of its owners and controllers, it possesses
significant powers; with the ability to buy and sell property, to enter,
bind, and be bound by contract, and to effectively act as an individual in
commercial matters.
Corporate personhood attributes a corporation with some, but not
all, of the legal rights of a natural person; affording the benefits of limited
liability, a veil which protects its members from suit, and perpetuity
beyond the lives of its founders. A company need only have concern for
its stockholders, as distinct from its stakeholders and the wider
community. The inherent differences between the legal person and a
natural person in effect creates an entity more powerful than any
individual. When provided with a veil of obscurity, immortality, and a
lack of either moral consciousness or conscience, the law renders
criminal acts of corporations more devastating to our society and less
likely to be held to account. This article analyses corporate criminal
liability, as referred to by the Law Reform Commission (the
‘Commission’) in its Regulatory Enforcement and Corporate Offences
Issues Paper.
Part I introduces the concept of corporate criminal liability and
considers the necessity of finding corporations criminally liable for their
actions, as distinct from those individuals in management positions.
Drawing upon examples of corporate malfeasance, this article details the
difficulties States have had in imposing criminal liability on corporations.
Part II outlines the appropriateness and utility of enacting a statutory
* LL.B. (Dub.), BL Candidate The Honorable Society of King's Inns. The author would like to
thank Niall Mulligan for his comments and suggestions on an earlier draft of this article.
Finally, the author would like to dedicate this article to his parents, Frank and Bernadette,
for their unending support and encouragement.
Salomon v Salomon & Co [1897] AC 22.
Law Reform Commission, Issues Paper on Regulatory Enforcement and Corporate Offences
(LRC IP 8-2016) 69.
2017] Corporate Criminal Liability
provision in Irish law to determine the criminal liability of corporate
entities. Furthermore, it shall analyse the vicarious liability,
identification, and organisational models of attributing criminal liability
to corporate entities, demonstrating the difficulties associated with each.
Part III recommends that a mixed model of attribution, derived from the
organisational doctrine is the most appropriate method of imposing a
statutory provision of criminal liability to corporations. It will outline a
test of attribution, the factors necessary for assessing corporate culture,
and the standard of liability that would be applicable. In a practical
application of the proposed model, Part III further considers the
constitutional implications of such a provision. This article also seeks to
ask whether applying a mixed model of attribution would effectively
prevent the type of corporate behaviour that contributed to the post-2008
Irish financial crisis.
I. The Best Interests of the Company Shareholder
Supremacy, Profit Maximisation and Cost-Benefit
A company is created by law,
its purpose as set out in its constitution;
However, with the growth in size and complexity of corporations over
the twentieth century the structure of these organisations has similarly
grown in size and complexity.
Shareholders delegate the running of the businesses that they own
to an executive board. It is this dissonance between the owners and
managers that creates a mistrust. In The Wealth of Nations, Adam Smith
acknowledged that the separation of ownership and management could
lead to inefficient management. Since executive managers could not be
trusted to manage property and capital with the same anxious vigilance
as the owners themselves, the law compels company directors to act in
the best interests of the company.
The case of Dodge v Ford Motor Co
stated that the purpose of a
corporation is to make a profit for its shareholders. Two investors sought
to have their dividend reinstated when Henry Ford, for arguably
altruistic purposes, had consistently reduced the cost of Ford Model-T
cars and paid Ford’s employees an above average wage.
Reinstating the
Companies Act 2014, s 17.
Adam Smith, The Wealth of Nations (London 1776) 575.
(1919) 170 NW 66.

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