Corporate Criminal Responsibility

By the fourteenth century, fictional entities were well recognized in English law. These early corporations were created by grants from the Crown or Parliament and consisted almost entirely of ecclesiastical bodies. By the sixteenth and seventeenth centuries the importance of corporations grew as industrialization spread. Municipalities, craft guilds, hospitals, and universities incorporated. Soon thereafter, massive business frauds and failures to perform duties (i.e., repair public bridges and roads) led to criminal prosecution of corporations for nonfeasance. By the mid-nineteenth century, English courts were willing to hold corporations criminally liable for wrongful acts as well as wrongful omissions. However, the courts drew a distinction at crimes of "immorality," since these required some proof of criminal intent. By the twentieth century, however, English courts had developed an "identification" doctrine by which corporations were prosecuted for crimes of intent. This doctrine merges the personalities of the corporation and its controlling individuals, and holds a corporation criminally liable for crimes committed by persons who "represent the directing mind and will of the corporate entity" (de Doelder and Tiedemann, p. 372).

In the North American colonies, the English Crown or Parliament granted the first corporate charters. After the colonies obtained freedom from England, state legislatures issued such grants. As in England, corporations initially were held criminally liable only for failure to comply with legal duties, then for wrongful acts under regulatory statutes that carried no mens rea requirement, and finally, for crimes of intent through use of anthropomorphic doctrines that identified an organization with individuals within the organization. Beyond these similarities, however, the American development of corporate criminal liability doctrines has been more complex, in part because of the dual state/federal judicial systems in the United States. Throughout the latter part of the twentieth century, two competing doctrines prevailed in the United States for holding organizations criminally liable: the Model Penal Code, section 2.01, which, like the English approach, holds an organization liable for the acts of certain leaders of the organization, and respondeat superior, which holds an organization criminally liable for the acts of any of its agents. The Model Penal Code approach has been adopted by a number of states; the respondeat superior approach is followed by the federal courts and some states.