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The preventive role of the judiciary in protecting the financial interest of the European Union.
A comparative analysis for improved performance
13
employees which would not certainly render liable a human employer in the same situation, because
the acts (including the state of mind) of corporation’s leaders were identified with the acts of
corporation itself
b.
The
respondeat
doctrine
, developed in the United States, based on the civil law principle of
respondeat superior
: an individual is civilly liable for the acts of his agents. Thus, “the Elkins Act (1903)
had specifically provided that acts and omissions of an officer functioning within the scope of his
employment were to be considered those of the corporation employing him.”
11
However none if these doctrines is fully effective and fair. (a) On the one hand, when corporate crime
occurs it is often very difficult to identify the individual wrongdoer, mainly in large and complex
corporations, and therefore large legal persons can avoid liability under the identification theory. (b) On
the other hand, it is virtually impossible to large legal persons to control the behaviour of all their
employees and they cannot effectively avoid liability under the
respondeat superior
doctrine, despite of
having done everything in their power to prevent their employees or agents from acting illegally.
As a result the identification theory has been expanded so that the liability of legal persons can also be
engaged by the management’s failure to supervise its employees. And this approach has been promoted
by international organisations. For instance, the OECD Good Practice Guidance, recommends that a
legal
person should be held liable when a “person with the highest level of managerial authority fails to
prevent a lower level person
from bribing a foreign public official, including through a
failure to supervise
him or her or through a
failure to implement adequate internal controls
, ethics and compliance
programmes or measures.”
A more revolutionary approach is the one of
‘corporate act and fault’
, based primarily on the evaluation
of the organisations as an independent body. Following this approach, pioneered by the 1976 Dutch Penal
Code provisions, the law is not providing persons’ acts are the acts of corporation, but lets the matter
depend on circumstances and lets the judges decide if the concrete conditions of a case impose the
consideration of the liability of a legal person, a natural person, of both or neither. Hence, the Dutch law
started to move, “somewhat tentatively and incompletely, to organisational criteria for corporate
liability.”
12
This ‘objective’ (or ‘organisational’ or ‘holistic’) approach to the criminal liability of the legal
person
became one of the most widespread in the world, together with the
‘extended identification
model’
promoted by international organisations.
While the objective model offers a solution to the effectiveness vs. fairness dilemma raised by the
identification and
respondeat
superior doctrines, “the question is how the corporate culture can be
detected in practice. A corporation acting improperly may have two cultures, one on paper to show to
state authorities when necessary and another one in real life. The question arises especially in relation to
intentional crimes such as bribery. […] If internal rules and regulations can insulate a company from
prosecution, then making them up is just another thing to add to the checklist while planning the crime.
Proving that the culture on paper is not the “real” culture of the company can be as difficult as proving
the involvement of management in the crime.”
13
11
Ibid
, p. 18
12
Ibid
, p. 19
13
Ibid
, p. 20.