Thursday, September 17, 2009
Sara Sun Beale (Duke University School of Law) has posted A Response to the Critics of Corporate Criminal Liability (American Criminal Law Review, Forthcoming) on SSRN. Here is the abstract:
This essay responds to critics of corporate liability and to the claim that elimination or limitation of such liability should be a priority for law reform. It discusses four points. First, imposing criminal liability on corporations makes sense, because corporations are not mere “fictional” entities. Rather, corporations are very real – and enormously powerful – actors whose conduct often causes very significant harms both to individuals and to society as a whole. Second, in evaluating the priorities for law reform it is critical to recognize that most of the problems with corporate liability are endemic to U.S. criminal law, rather than unique. The problems of corporations are neither special and distinctive, nor the most serious problems facing the criminal justice system. Third, a comparative review reveals something that may come as a surprise: corporate criminal liability is neither an embarrassing historical vestige nor a uniquely troubling feature of U.S. criminal law. To the contrary, in other countries the focus in the past several decades has been on the creation of corporate criminal liability in jurisdictions in which it did not exist, and where such liability already existed the modern reforms have included modifications intended to make it easier, rather than harder, to prosecute corporations criminally. Finally, what about the collateral consequences of a criminal conviction, which may wreck havoc on innocent parties including shareholders, employees, and creditors? Critics have mistakenly assumed that these collateral consequences are intrinsically tied to criminal liability. They are either necessarily related to criminal liability nor are they limited to corporations. Accordingly, these collateral consequences should be considered by prosecutors on a case-by-case basis, but they should not affect the policy questions addressed here. The critics are right that there are serious problems with corporate criminal liability in the United States. But any agenda for reform should acknowledge that those problems are generally endemic to the criminal justice system (and especially the federal criminal justice system), rather than unique to corporations. In addition, the agenda for reform should include the question whether corporate criminal liability (and/or other mechanisms such as civil liability and regulatory oversight) needs to be strengthened or expanded.
I'm not sure that the size and power of corporations tell us much in any direct way about the wisdom of corporate criminal liability, as individuals cause the corporation to act and could always be subjects of punishment. One might justify corporate liability as a way to deter conduct that otherwise cannot be traced to individuals, but that is another argument. Nor does the undoubted spillover effect of individual criminal punishment tell us much about whether corporate criminal liability is sound; with corporate liability, the spillover effects are the whole point, not an unavoidable but lamentable consequence of punishing an actual wrongdoer.