Time to Stop Living Vicariously: A Better Approach to Corporate Criminal Liability
Pollack, Barry J., American Criminal Law Review
Much has been said and written of late about the propriety of holding corporate entities vicariously criminally liable for the actions of their agents and the role a supposedly effective compliance program should play in corporate charging, liability, and sentencing decisions. Academics and governmental agencies often cite empirical studies as support for the positions they advance in these debates. Rather than relying on empirical data or anything approximating the scientific method, this article offers anecdotal evidence based on the experience of a single practitioner. To the extent that this article cites any empirical data, it does so only to support the notion that the author's "real world" anecdotal experience is not anomalous. Based on that experience, this article argues that the current regime for prosecuting corporate entities for the criminal offenses of their agents allows the government to allege, without proving, wrongdoing by some corporate actor, and then encourages large corporate entities to buy their way out of criminal liability by agreeing to the unproven allegations and paying a substantial monetary penalty.
Academics and practitioners have suggested that one way to modify the current regime would be to offer the existence of an effective compliance program as an affirmative defense to corporate criminal liability, or even to require the government to prove the lack of such a program as an element of a corporate criminal offense. This article argues that under the existing regime, corporations already possess substantial incentives to create and maintain adequate internal controls and robust compliance programs.
Continuing to expose corporations that lack adequate compliance programs to vicarious criminal liability while shielding those that do have such programs adds no meaningful additional incentive to corporations to create and maintain such programs. Accordingly, few corporations would create or enhance compliance programs based solely on this proposed modification to the current regime of corporate vicarious liability. Allowing corporations with such programs to escape criminal liability when the corporation was nonetheless pursuing criminal objectives would circumvent the widely accepted policy goal of holding bad corporate actors criminally liable. Conversely, there are good corporate actors wholly lacking in criminal intent, which, for lack of resources or for other reasons, do not have adequate corporate compliance programs and would not establish such programs simply because doing so would preclude criminal liability. Such entities should not be criminally prosecuted. Thus, tying corporate liability to the existence of corporate compliance programs is both over-inclusive and under-inclusive if the primary goal of the criminal enforcement regime is to punish bad corporate actors.
The time-worn rationale for vicarious corporate liability is the observation that a corporation can only act through its agents. This does not mean, however, that the corporation as a collective entity shares the intent of every one of its agents. Indeed, this cannot be the case as different corporate agents may have diametrically opposed intents. This article argues that corporations should be subjected to criminal prosecution if, and only if, the corporation possesses criminal intent, i.e., the criminal actions of its agents manifest the collective criminal intent of the corporation.
Criminal offenses for individuals typically require intent. Indeed, the presumption that an individual should not be punished for a crime without a showing of intent is a long-settled principle of common law jurisprudence. The 17th and 18th Century writings by Edward Coke and William Blackstone state that the existence of "criminal intent" and a "vicious will" is the prerequisite of any crime. (1) Courts in this country have a long and uninterrupted history of following this basic tenet of criminal law. …