Criminal offences and corporate guilt

Question

S. 1(6) of the Protection from Eviction Act 1977 states:

Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager or secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

But in the more typical case of a statutory criminal offence where this isn't so expressly specified, is it generally true:

• that bodies corporate can be guilty of the offences just as individuals can, and;
• that (without such a dual guilt clause), the culpability must generally be an either/or affair; that if a company commits the offence "through" an agent/employee or officer of itself, that the agent then must have been working in either an independent or an agent capacity, and not as both?

Otherwise, what is the purpose of such clauses as one finds in s. 1(6) as quoted?

Answer 1

A body corporate can be guilty of any offence in principle, just like a natural person could. There are some offences which just plain don't make sense; a company can't commit bigamy. And in other instances there will be statutory specifics in play.

Moreover, the various ways that two or more people can be guilty of the same crime - conspiracy, joint enterprise, etc. - can apply to corporate persons as well as natural persons. So it may be that a company and its employee are both guilty of the same fraud, for example. The general philosophical problem is how to say that a company is guilty at all, when its being treated as a "person" is a legal device and it does not in fact have the capacity for thought or intention.

That is the motivation for various statutory provisions whereby a company will be deemed guilty in certain circumstances. Setting that out in an Act makes the prosecution possible. At common law, there are also generic ways to attribute actions and states of mind to the company; these will be available in the absence of any special rules for an offence.

• Many criminal offences require a mens rea, meaning that they are conditioned on the mental state of the offender who not only did a bad thing but intended to do it. A company does not have a mental state as such. At common law, this can be imputed if there is a person representing the company's "directing mind and will", and that person had the required mental state. This is known as the "identification principle" or "identification doctrine". The paradigm example is someone like a company director. If he does a bad thing using his authority over the company, then his guilty mind counts against the company.

• Strict liability offences can also be attributed to a company on the principle of vicarious liability. This is a development of an older doctrine holding a human employer (sometimes) responsible for the actions of his servants. This, under the Latin tag respondeat superior, is not especially favoured as an approach in the UK, but does come up in the American corporate criminal liability context.

Both of these avenues to liability are tricky because they are hard to apply to larger and more complex corporate structures. Junior employees might commit crimes in ways that are somehow instigated or encouraged by corporate policy, but without a senior executive explicitly intending those acts to be done. That is why there are so many specific statutes dealing with corporate liability in specific contexts, such as with false accounting offences. In the UK, there is also a fairly recent "umbrella" statute in the Economic Crime and Corporate Transparency Act 2023 (ss.196-198 and Schedule 12), where for certain offences (fraud, theft, bribery, etc.), corporate liability will follow if "a senior manager ... acting within the actual or apparent scope of their authority" commits the offence. There is a bill currently before Parliament (Crime and Policing Bill, clause 130) which would extend this to any criminal offence, not just the "economic" ones.

That model is based on similar reforms that took place in Australia and Canada. A relevant part of these provisions is the idea of the manager acting within the "actual or apparent scope of his authority". In policy terms, we'd think it to be fair for a company to be liable when its employees do bad stuff as a result of their employment, but not otherwise. If a corporate executive murders somebody then that's typically a private act rather than something the company is responsible for. Whether a particular act is done by someone as an employee or agent of their company, or as an independent frolic, is for a court to assess based on the facts at hand.

The cited provision of the 1977 Act is actually an example of the opposite imputation, where the company is presumptively already guilty, and the guilt is then shared by a director who consented, connived, or should have known that this was going on. The company does not go to prison (how could it?) but the director might.

Answer 2

That bodies corporate can be guilty of the offences just as easily as individuals can

I'm not quite sure what you mean by "just as easily", but in general, corporate bodies can be guilty of offences which individuals can be guilty of. This is because of Section 5 and Schedule 1 of the Intepretation Act 1978:

5. In any Act, unless the contrary intention appears, words and expressions listed in Schedule 1 to this Act are to be construed according to that Schedule.

“Person” includes a body of persons corporate or unincorporate.

Note the phrase "unless the contrary intention appears". Some offences will clearly only apply to an individual e.g. those that talk about intent, or being over 18 years old, or other language that excludes the possibility of corporate bodies.

That the culpability must generally be an either/or affair [...] otherwise, what is the purpose of such clauses as one finds in s. 1(6) as quoted?

This really depends on the wording of the specific offence. Consider for example the offence under Section 72(1) of the Housing Act 2004:

A person commits an offence if he is a person having control of or managing an HMO which is required to be licensed under this Part (see section 61(1)) but is not so licensed.

This is subject to the definitions of "person having control" and "person managing" at Section 263 which, in simple terms, means the person receiving the rent and/or entitled to receive the rent and includes agents receiving rent on behalf of another person.

The offence can apply to either a corporation or an individual or both at the same time depending on who is receiving rent or acting as an agent for the other:

Example 1: A corporation handles repairs and administration tasks for a property, not including rent collection, on behalf of an individual landlord who is ultimately entitled to the rent. Only the individual landlord can commit the offence.

Example 2: A corporation manages a property, including collecting rent, on behalf of an individual landlord who is ultimately entitled to the rent. The corporation collects the rent by sending its director to collect cash from the tenant and deposit it into the corporation's bank account. The corporation, the corporation's director, and the individual landlord can commit the offence.

Example 3: A corporation manages its own property, including rent collection directly into its own bank account from the tenant. The directors aren't involved in rent collection but are neglectful in relation to obtaining an HMO licence. Only the corporation, but (in the absence of any further statutory provision) not its individual directors, can commit the offence.

However, example 3 is modified by Section 251(1):

Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of — (a) a director, manager, secretary or other similar officer of the body corporate, or (b) a person purporting to act in such a capacity, he as well as the body corporate commits the offence and is liable to be proceeded against and punished accordingly.

The effect of this is to bring the directors within the scope of the offence in example 3 in cases which involve consent, connivance, or neglect.

This is quite different to example 2 in which the director can also commit the offence. In example 2, the director commits the offence directly by carrying out the illegal action (controlling/managing a property without a licence) and there is no need to trigger Section 251. In example 3, the director does not carry out the illegal action but commits the offence indirectly by triggering Section 251.

So to answer your question, the purpose of such a provision is to ensure that directors etc. can be liable for offences committed by corporations in scenarios where they aren't otherwise directly caught by the wording of the offence.

Answer 3

that bodies corporate can be guilty of the offences just as individuals can, and;

Yes, just as in any other offence.

that (without such a dual guilt clause), the culpability must generally be an either/or affair; that if a company commits the offence "through" an agent/employee or officer of itself, that the agent then must have been working in either an independent or an agent capacity, and not as both?

No, but that's not what this clause addresses.

This clause says that in addition to the body corporate and the individual employee/agent acting contrary to law, the directors and similar officers of the company can also be held to account - for example, for failing to establish and enforce policies and training intended to prevent such breaches.

In other words, if the defence is "the company told me to do it", then it's not just the company that's liable, but also the individuals within the company that promoted the illegal action.

Answer 4

united-states

A corporate entity and the person carrying it out on behalf of the corporate entity are both criminally liable. The English statute cited in the question appears to reach the same result and there is no reason to think that the general rule would be different.

In the case of an individual asking an agent to carry out an act on their behalf, in contrast, the individual asking would be guilty of the offense of solicitation of the crime, and the agent would be guilty of the crime. Often those offenses have the same penalty. I don't know if English law makes that distinction or simply treats the principal soliciting the crime as guilty of the original offense.