Vicarious Liability

At common law, the general rule that criminal liability had to be personal rather than vicarious prevented corporations from being held criminally liable, since a corporation could not itself engage in a physical act. Beginning in the latter half of the nineteenth century, however, such limitations were gradually eliminated. Under modern statutes, corporations face vicarious liability for the criminal conduct of certain employees, although the wisdom, fairness and scope of such liability remain controversial. Relying on the fiction that the acts of the employee are the acts of the corporation, some defend such liability as direct rather than vicarious. More persuasively, some consider vicarious liability for corporations a justifiable departure from the basic principles because the penalties involve only fines rather than imprisonment and send less of a message of moral condemnation. Furthermore, it is argued, the corporation is not a true person, and the people most directly affected, the shareholders, suffer losses more akin to civil than criminal penalties.