Name:

Topic - Guilty Minds in Corporate

Admission No. :

bodies: a challenge to corporate

Batch:

criminal liability
Introduction and Statement of Problem

Corporate bodies are more corrupt and profligate than individuals, because they have more
power to do mischief, and are less amenable to disgrace or punishment. They neither feel shame,
remorse, gratitude nor goodwill
Hazlitt.1
The origin of criminal element in the society is not new, from time immemorial the practice is
continuing in every nook and corner of the globe. But the endorsement of criminal liability for
corporations has been largely a twentieth century phenomenon. Corporate liability has now
become a prominent item on the agenda for law reformers. Provisions on corporate liability have
been in several proposals for codification in India, especially since the Bhopal Gas case. As yet,
the direction forward remains unsettled. Conventional crimes were not designed with the
company in mind, and they fail to capture the essence of corporate fault. The concepts of actus
reus and mens rea, with their human essence, are neither useful nor appropriate in the corporate
context.
It is important to analyze why corporate liability is needed. We need to protect the consumer as
well as the shareholder. If a corporations net worth decreases, shareholders bear the brunt of it.
If a corporation is penalized by way of fines, then the consumer bears the brunt.
There are a number of liability strategies within the context of criminal law. The question is
which form of liability serves the purpose. Traditionally, courts have used the principal of
respondeat superior, holding corporations vicariously liable for the criminal actions of their
employees. But there are many other principles guiding corporate liability such that of
aggregation, the organic theories, reactive fault, etc. There is a split in authority. This work seeks
to clarify the proper role of liability strategies in assessing whether a corporation should be found
liable for the acts of its employees. It is subsequently argued that the organizational model
should be adopted, and that the identification model should be done away with. So in the light of
all the theories took birth in this direction will be analyzed keeping in mind their validity in the
present scenario and their utility in this time. Moreover the dissertation will be directed in this
direction that how the scandals are still with high momentum even after taking necessary steps in
this regard. The models with various procedures laid down in it are if sufficient then where in the
grey area. India is also not out of the purview of corporate crime very now and then, Indian
Corporations get cobwebbed within the criminal element of companies leading to loss of
customer trust and shareholder split which in large effects the entire business community of the
country. The preponderance of the legal departments over this issue requires a discussion at
length and the status of corporate criminal liability in various parts of the globe even requires a
pertinent place in the work. This short introduction follows up with research questions,
hypothesis, scope of the present study; objectives of carrying out the study, review of literature
relevant to this work and research methodology.
Objectives
1 CELIA WELLS, CORPORATIONS AND CRIMINAL RESPONSIBILITY (2001)

The basic reasons for which the study has been planned to carry out are provided The first basic objective is to trace the origin and development of the concept of
Corporate Criminal Liability so that the requirements of its initiation could be traced out.
Then the study will be carried out to find out the validity of Corporate Criminal Liability
and requirement of the same over and above civil liability of corporations.
Further it will be aimed to find out the present national and international scenario
regarding the concept of Corporate Criminal Liability.
As the study has been aimed to trace the challenges to Corporate Criminal Liability, the
factors decisive in this respect are to be pointed out.
To find out the relevance of continuing Corporate Criminal Liability, over civil liabilities
and administrative laws to curb the corporate offenders and evaluating its importance in
various legal systems.
To evaluate the importance of Corporate Criminal Liability in the entire system of
Corporate Governance.
Scope
The work presents a theoretical dissertation on various liability models, and argues why a certain
model is suited to a country. The legal position in Europe, the United States, India and Canada is
discussed. The first chapter traces the development and expansion of the elements of corporate
criminal liability. It then discusses the legal position of different countries on corporate liability,
including a more detailed study of the current position in India. The purpose of corporate
criminal liability is discussed, as this will form the basis of the forthcoming chapter, i.e. which
model best achieves the purpose. The study will revolve basically upon the entire conception in
relation to Corporate Criminal Liability. The initiation point, genesis, developments, up
gradations, amendments all will come under the purview of the study. In the light of corporate
liability, the stand point of criminal liability and its requirement in the corporations will be
analyzed. The international and national laws and norms regarding corporate criminal liability
will be studied in detail as well as the laws will be compared with each other to see their
viability. Comments in support as well as in contrast will be evaluated in detail to look out the
present thinking of the globe. Various theories based upon which Corporate Criminal Liability is
fixed will also be under the purview of study. Emphasis upon practical cases will be laid down
and some illustrations in support of the same will be also covered. Statistical evaluation of the
concept in various nations will be covered under the study, pros and cons in addition will be
evaluated in detail. Legal decisions and juridical viewpoints regarding the concept will also be
studied. Factors which are weakening and proving themselves as challenge for Corporate
Criminal Liability to stand strong will be analyzed in detail.
Research questions
1. What are the factors which still exist in corporations due to which scandals are on
colossal heights till now?
2. Though stringent punishment are present regarding corporate liability, what are the
lacunas which are providing enough space for guilty minds to remain out of focus?
3. How for criminal liability under the two heads of corporate liability is feasible to target
and eradicate corporate crime?
4. How the concept of corporate criminal liability had lessened down the process of
detecting the offenders otherwise tough to detect?

5. Does the procedure involved in making one liable under Corporate Criminal Liability is
very complicated or shallow so that offenders slip out easily from the shackles?

Hypothesis
Initially the concept of Corporate Criminal Liability was started by imitating the criminal
liability of human beings, new models of criminal liability, such as the aggregation or self
identity theories, have been developed to better fit the corporate structure and operation. Time
and tide both were in support of celebration of the concept; it made itself well proved to wipe out
the menace of criminality from corporations. But with the passage of time, corporate
misconducts have been dealt successfully by various laws and productive results evolved thereby
other than utilizing corporate criminal liability. So in the present scenario many countries are
reluctant towards imposing strict corporate criminal liability on their corporations, criticisms on
it has become rampant and in result big nations have start reposing less confidence on the same.
So, the assumption in the present work is that though there are other sharp weapons too to curb
corporate misconducts, the concept of corporate criminal liability still has the strong essence to
uproot and detect the offenders if the loopholes and the challenges could be lessened and the
present statutes could mended at par to the other laws in the global platform.
Research Methodology
The work basically fulfills doctrinal research criteria as the possibility to have an empirical study
over the topic is very feeble. But the approach is analytical in nature. The area of work will be
studied in depth, and landmark cases in the history of corporate criminal liability will be referred
to. Books, articles, journals, news blogs, case studies and other such primary datas, and internet
sites have been searched and will be searched at large to find out the relevant datas. The
methodology is comparative as attempts to show the advantages of one liability strategy over the
other as well as the condition and situation of the concept in various countries are also in the list
of study. Interpretative and impact analysis research process will also be utilized to find out the
after effect of the statutes on corporate criminal liability and how they have been decodified to
utilize in erasing corporate misconducts.
Review of literature
A literature review is a description of literatures relevant to the particular field or topic. It gives
an overview of what has been said, who the key writers are, what the prevailing theories are
about. As such, it is not in itself a primary research, but rather it reports on other findings. 2It
mainly reflects how the research has been carried out and what are the paper works been done on
the relevant topic. Moreover the need to do the research will also is detected, because by
introducing and summarizingly describing the texts will make it easier for the reader to
understand the reason hidden beneath the research. Here are some literature reviews which will
illustrates in some manner that what is the approach in this research and what are the materials
which have been searched for carrying on this work. Firstly, details regarding some books have
been provided and then the articles crossed through will be explained.
Marshall B. Clinard, Peter C. Yeager, Corporate Crime (Transaction Publishers, New
Brunswick and New Jersey, 2006), is one of the greatest and rarest comprehensive study of
2 http://www. emeraldinsight.com/authors/guides/write/literature.htm

corporate law violations by large corporations. The book laid downs the groundwork for analyses
of important aspects of corporate behavior and definitions to study corporate crime and found
ways of location corporate violations from and even drew up measures of the seriousness of
crimes. The book moreover discusses the development of a criminological interest in corporate
crime, and describes number of issues involved in the concept of corporate crime. It reflects the
growth and development of corporate criminal behavior, common corporate violations, social
responsibility of the corporations and many other aspects which clarifies the actual position of
corporate crime in its practicality.
William S. Laufer, Corporate Bodies and Guilty Minds- The Failure of Corporate Criminal
Liability (University of Chicago Press, London, 2006), this book gives a critical account of
corporations seeking to bolster perceptions of responsibility and law abidance. It mainly reflects
the corporation crimes and explains corporate criminal liability in detail. Evolution of corporate
criminal law has been dealt elaborately in this book. It depicts the process of how the persons
with guilty intentions stay away from the greater periphery of criminal liability. Various phases
of corporate criminal liability has been discussed at large and moreover the developmental cycle
of the corporate criminal liability in United States have been described at large.
William Twining and Christopher McCrudden (eds.), Rethinking Corporate Crime,
(LexisNexis Butterworths, London, 2003), this book largely deals with the understanding the
nature and causes of corporate crime. The relevance of white collar and corporate crime, the
roots of corporate criminality, the affecting social, economic and cultural factors, crimefacilitative and crime- coercive industries have been discussed at large. The components of
corporate criminality like: organizational fault, endangerment offences, imputed liability have
been discussed at large and how the corporate crime is dealt in the present era of globalization
has also been discussed. The book largely examines the role of criminogenic environments,
system failures, and ineffective supervision and analyzes how a corporate culture or ethos can
contribute to, support and even encourage illegality.
Dr. Avtar Singh, Company law (Eastern Book Company,Lukhnow,15 th Edn.,2009), is a book
of epic in regards to detail of company culture in India. Though it has all the aspects covered
under this book and is not an exclusive work regarding corporate criminal liability, but it
provides the Indian scenario of corporate development and the initiation of corporate liability in
India.
Andrew Weissmann and David Newman, Rethinking Corporate Criminal Liability,
(Indiana Law Journal, vol-82:411), this article has particularly dealt with the concept of
Corporate Criminal Liability in an analytical manner. The writer has emphasized upon the
overgrowing crowd of corporate wrongs and has tried to evaluate the factors leading to such
mismanagements. Moreover it has viewed the area of narrowing down corporate criminal
liability by various court decisions.
Larry May and Zachary Hoskins (eds.), International Criminal Law and Philosophy,
(Cambridge University Press, 2012), this book basically deals some of the best recent work by
philosophers and legal theorists on the conceptual and normative grounding of international
criminal law. The authors have had occasion to interact with each other, making the volume
somewhat of a dialogue about important issues. The book has some glimpse of criminality in
corporate field, and provides some preliminary elements of international philosophy on the same.
John R. Lott, Jr., Corporate Criminal Liability, JEL classification, (vol. 8600, pg. 416),
this article reviews the economic literature on corporate crime. Economists have discussed and
answered a number of questions about corporate crime in only few years time span. Perhaps this

unusual success is due to the questions involving corporations being so similar to other crime
issues, previously analyzed. However, a number of questions remain largely unexplored like,
why do certain firms commit crimes while others do not? What are the social costs imposed by
the very high corporate criminal penalties? How does the criminal justice process shape the
organisation of firms? These questions have been tried to resolve in this article.
ERIC ENGLE, Extraterrestrial Corporate Criminal Liability: A remedy for human rights
violations, (ST. JOHNS JOURNAL OF LEGAL COMMENTARY [Vol. 20:2006]), this
article focuses on the historical and theoretical development of Corporate Criminal Liability
concept. A detail discussion regarding the civil as well as criminal liability of corporate criminal
liability has been done at length.
Shouvik Kr. Guha and Abhyudaya Agarwal, Criminal Liability of Corporations: does the
older order need to change, (NUJS LAW REVIEW, 1 NUJS L. Rev. [2008]), this article
mainly deals with the judicial aspect of corporate criminal liability. The work mainly focuses on
the effect of judicial aspects of various courts and tribunals and their responses regarding various
aspects of CCL.
Vikramaditya S. Khanna, Politics and Corporate Crime Legislation, (Boston University,
Reg. Spring, 2004), the article mainly focuses on the political aspects of corporate crime, the
concept and the political scenario has been highlighted at large. The growth and development of
the legislation regarding corporate crimes are discussed and analyzed here in this article.
Edward B. Diskant, Comparative Corporate Criminal Liability, (The Yale Law Journal,
118:126, 2008), the article basically deals in issues like various phases of corporate crime, the
development of the same and the gradual difference of thought regarding the same.