When does a company "know" something?

Question

For example, suppose a criminal offence contains elements of knowledge, like Violence for securing entry to promises under section 6 of the Criminal Law Act, which requires:

• use or threat of violence to secure entry to premises, whether violence against people or property
• presence of person(s) on the premises to be entered opposed to the entry
• knowledge of presence of persons and their opposition to the entry

If such an offence is committed on behalf of a company, and the company is to be held liable, would a director that is substantially involved in the operational decisions leading to the commission of the offence have to have the "knowledge"? Or would it be sufficient for the employee doing the physical acts to have the knowledge?

Note that this is different from offences that may require establishment intent, which might implicate the so-called identification principle and the attribution of intent to directing will and mind types of figures.

Or is it sufficient to have constructive knowledge distributed across different members of the company? (Eg, employee knows of presence of individuals, director knows of their opposition to entry, but directs it anyway.)

Answer 1

A company has knowedge in relation to a criminal offence when it “expressly, tacitly or impliedly authorised or permitted the commission of the offence”

australia

The following is taken from them Commonwealth Attorney General’s commentary on the Commonwealth Criminal Code, but is generally compatible with state and territory interpretation.

5.3 Knowledge

A person has knowledge of a circumstance or a result if he or she is aware that it exists or will exist in the ordinary course of events.

12.1 General principles

(1) This Code applies to bodies corporate in the same way as it applies to individuals. …

(2) A body corporate may be found guilty of any offence, including one punishable by imprisonment.

The acts of individuals who are employed by a corporation or who act as its agents or officers, are imputed to the corporation if the acts are within their apparent scope of employment or authority … The full range of Chapter 2 fault elements – intention, knowledge, recklessness and negligence can be imputed to a corporation.

So far, so straightforward. Then we get this:

12.3 Fault elements other than negligence

(1) If intention, knowledge or recklessness is a fault element in relation to a physical element of an offence, that fault element must be attributed to a body corporate that expressly, tacitly or impliedly authorised or permitted the commission of the offence.

(2) The means by which such an authorisation or permission may be established include:

(a) proving that the body corporate’s board of directors intentionally, knowingly or recklessly carried out the relevant conduct, or expressly, tacitly or impliedly authorised or permitted the commission of the offence; or

(b) proving that a high managerial agent of the body corporate intentionally, knowingly or recklessly engaged in the relevant conduct, or expressly, tacitly or impliedly authorised or permitted the commission of the offence; or

(c) proving that a corporate culture existed within the body corporate that directed, encouraged, tolerated or led to non-compliance with the relevant provision; or

(d) proving that the body corporate failed to create and maintain a corporate culture that required compliance with the relevant provision.

(3) Paragraph (2)(b) does not apply if the body corporate proves that it exercised due diligence to prevent the conduct, or the authorisation or permission.

(4) Factors relevant to the application of paragraph (2)(c) or (d) include:

(a) whether authority to commit an offence of the same or a similar character had been given by a high managerial agent of the body corporate; and

(b) whether the employee, agent or officer of the body corporate who committed the offence believed on reasonable grounds, or entertained a reasonable expectation, that a high managerial agent of the body corporate would have authorised or permitted the commission of the offence.

(5) If recklessness is not a fault element in relation to a physical element of an offence, subsection (2) does not enable the fault element to be proved by proving that the board of directors, or a high managerial agent, of the body corporate recklessly engaged in the conduct or recklessly authorised or permitted the commission of the offence.

(6) In this section:

board of directors means the body (by whatever name called) exercising the executive authority of the body corporate.

corporate culture means an attitude, policy, rule, course of conduct or practice existing within the body corporate generally or in the part of the body corporate in which the relevant activities takes place.

high managerial agent means an employee, agent or officer of the body corporate with duties of such responsibility that his or her conduct may fairly be assumed to represent the body corporate’s policy.

So, a body corporate “knows” if its directors or executives knew, or “expressly, tacitly or impliedly authorised or permitted the commission of the offence”, or it allowed a culture that “directed, encouraged, tolerated or led to non-compliance” or failed to create a culture that “required compliance” while an agent knew. It’s a defence if the corporation can show that they exercised due diligence and the offence happened despite that.

It is not settled law whether a corporation can have knowledge even if no individual employee or agent can be identified as having knowledge. That is, it may be possible for a corporation to know something through disparate and uncollected facts that no one individual has knowledge of because the corporation is required to take steps (due diligence) to know at least as much as all its agents know and possibly more than that.

So, the answer to each of your scenarios is: yes, the corporation is likely criminally liable. Unless it can show due diligence in the collection and dissemination of information that it was not reasonably possible for the corporation to “know” at the time of the commission of the offence.

Answer 2

canada

In 2003, Parliament amended the Criminal Code to codify the ways that an organization can become a party to an offence. There is no longer any legal fiction that an organization "knows" anything. Instead, there are now simply statutory pathways that make an organization a party to an offence, phrased in terms of what a senior officer knows and does.

Organization liability under the Criminal Code is defined the same for knowledge-based offences as for intent-based offences.

See Criminal Code, s. 22.2:

22.2 In respect of an offence that requires the prosecution to prove fault — other than negligence — an organization is a party to the offence if, with the intent at least in part to benefit the organization, one of its senior officers

(a) acting within the scope of their authority, is a party to the offence;

(b) having the mental state required to be a party to the offence and acting within the scope of their authority, directs the work of other representatives of the organization so that they do the act or make the omission specified in the offence; or

(c) knowing that a representative of the organization is or is about to be a party to the offence, does not take all reasonable measures to stop them from being a party to the offence.

("representative" means "a director, partner, employee, member, agent or contractor of the organization")

Slightly simplifying — the organization is a party to a knowledge-based offence if, with the intent to benefit the organization:

• a senior officer is a party to the offence (requires that senior officer to have knowledge);
• a senior officer has the required mental state (i.e. knowledge) for the offence but directs others to do the acts; OR
• a senior officer knows a representative is about to be a party to the offence (i.e. knows that the representative has the knowledge) but doesn't take all reasonable measures to stop it.

This is not different from intent-based offences. If there was formerly any difference, Canada eliminated it in 2003 with the above section of the Criminal Code.