Thursday, October 30, 2008

Reforming Corporate Criminal Liability

The Institute of Legal Reform has issued a new whitepaper on the role of criminal law as it relates to corporate conduct. One of the authors of this Report is former Enron prosecutor Andrew Weissmann. Titled, Reforming Corporate Criminal Liability to Promote Responsible Corporate Behavior - the whitepaper can be found here. It concludes stating -

"Changing the current vicarious liability rules will promote effective compliance programs within companies, and redirect to a more condign track a legal doctrine that has gone far off course. Practitioners and academics have offered practical solutions for balancing society’s need for punishing the guilty and making a victim whole against society’s interest in resorting to criminal sanctions only when a defendant has done something wrong. Given the nearly 100-year long misreading of a single Supreme Court precedent and recent pronouncements from that Court, it is high time to reform the standard for vicarious criminal corporate liability. As described above, the current doctrine is not founded on either an act of Congress or Supreme Court precedent. Compliance-based and hierarchy-based alternatives to the current regime would continue to hold lawless corporations liable for criminal acts, while ensuring that responsible corporations are not unfairly penalized. It is incumbent upon legislators, academics, and practitioners to press the case for a greater recognition of the harmful and counterproductive consequences of the current system and to seize the opportunities for reform outlined herein."

It certainly would be good to see revisions in the present approach to corporate criminal liability. I advocate for the adoption of a good faith defense in my article - A New Corporate World Mandates A Good Faith Affirmative Defense.


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