New perspectives on the criminal liability of corporate bodies

• Jurisdiction: South Africa
• Date: 15 August 2019
• Published date: 15 August 2019
• Author: Louise Jordaan
• Citation: 2003 Acta Juridica 48
• Pages: 48-71

New perspectives on the criminal liability of

corporate bodies

LOUISE JORDAAN*

University of South Africa

I INTRODUCTION

The capacity of corporate bodies

1

for criminal liability is an area of law

which has received very little attention in South African law. The

traditional premise of criminal law is that only a natural person is capable

of performing an unlawful act with a blameworthy state of mind.

2

Corporate bodies are accordingly held accountable for crimes on a

derivative basis in South African law.

3

Broadly speaking, this means that

the state has to prove that an agent or servant of the corporate body, acting

within the scope of his or her employment or authority or while

furthering the interests of the corporate body, committed a crime. The

unlawful act and culpability of the individual servant or agent are then

imputed to the corporate body. Although broader in scope, this type of

liability developed from the doctrine of vicarious liability, traditionally

applied in the f‌ield of delict.

4

*BProc (RAU)LLB (Unisa) LLD (Unisa), Associate Professor, Department of Criminal and

Procedural law, University of South Africa.

1

The term corporate body as used in this chapter denotes a juristic person created by

statute, eg private and public companies, universities, building societies and close corporations

and associations with legal personality, eg a sport club.

2

SeeJCdeW

etandHLSwanepoel Strafreg 4ed (1985) 56: ‘[D]ie regspersoon [is] ’n ideële

ding wat nie kan dink of wil nie. Sy dinkwerk en sy wilwerk word vir hom gedoen deur die

mense wat sy sake bestuur . . .’, J Burchell and J Milton Principles of Criminal Law 2ed (1997)

327: ‘Criminal law punishes unlawful human conduct. Being an artif‌icial rather than a natural

person a corporation can be penalised for crimes committed only by its agents or servants. . .’

and D Bailes ‘Watch your corporation’ (1995) 3 JBL 24: ‘A corporate body is not a natural

person . . . [a] corporate body, therefore, acts through a living person who has a mind which

can have knowledge or intention or who can be negligent.’

3

See the provisions of s 332(1) of the Criminal Procedure Act 51 of 1977 discussed under II

(1).

4

E M Burchell andPMAHunt South African Criminal Law and Procedure vol 1 General

Principles of Criminal Law 3ed (1997) by J M Burchell 298 explains the application of the

doctrine of vicarious liability in civil law: ‘A master is liable for a delict committed by his servant

if the delict was committed in the course and scope of the servant’s employment. Viewedfrom

the perspective of the liability of the master, this type of responsibility is strict, since it is not

dependent on any fault on the part of the master . . . The special relationship between the

parties (usually that of employer-employee) forms the rationale for holding one person

vicariously liable for the wrong committed by another. However,the servant has to be at fault.’

Section 332(1) of the Criminal Procedure Act 51 of 1977 creates broader liability than

traditional vicarious liability of a master in civil law because a corporate body may also be liable

for ultra vires acts of its servants, as long as they were performed in the interest of the corporate

body. See the discussion under II(1).

48

2003 Acta Juridica 48

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During the last few decades, derivative bases of corporate criminal

liability have been questioned by legal writers in a number of common-

law jurisdictions. Various proposals for reform have emerged, the most

innovative of which is a rejection of derivative liability in favour of a

model envisaging direct corporate liability. More cautious proposals

concern the creation of specif‌ic corporate offences involving negligence.

This chapter examines new models of corporate criminal liability

which emerged during the last decade in jurisdictions such as the United

Kingdom and Australia. Similar developments on the European conti-

nent, for instance in Belgium, and also in the broader European Union

are discussed. The comparative study reveals that the international trend

is towards imposing criminal liability on juristic persons increasingly

independent of proof of misconduct of a particular individual. The

conclusion reached is that the criminal liability of juristic persons in South

African law is not only out of touch with developments elsewhere, but

may be found to be inconsistent with the South African Constitution.

5

The chapter proposes legislative reform in this f‌ield so as to respect

constitutional values.

II DERIVATIVE MODELS OF CORPORATE CRIMINAL

LIABILITY

(1) Vicarious liability

Although it has been rejected as a basis of liability in criminal law,

6

vicarious liability has played a prominent role in the history of the law of

corporate criminal liability. As early as 1939, the South African legislature

created a very wide form of corporate criminal liability

7

based essentially

5

Constitution of the Republic of South Africa, Act 108 of 1996.

6

The general rule at common law is that a person is not liable for the crime of another

unless he authorised or procured its commission or took part in it. See Burchell and Hunt (n 4)

298. This rule follows from the basic requirements of criminal liability, ie causation and fault. F

B Sayre ‘Criminal responsibility for the acts of another’(1930) 53 Harvard Law Review 689 at

717 points out that vicarious liability is liability frequently without fault and outside of the

ordinary principles of causation. The reasoning supporting vicarious liability in the law of delict

is that the employer is in a better position than the employee to ensure that reasonable

precautions be taken and that the employer reaps the economic benef‌its of the relationship with

his employee. D Hanna ‘Corporate criminal liability’(1989) 31 CLQ 452 demonstrates that

these reasons have been adapted to support vicarious criminal liability of corporate bodies. See

also C Wells Corporations and Criminal Responsibility 2ed (2001) 130: ‘Vicarious liability, a

doctrine transplanted from civil law which grew out of the development of the liability of a

master (employer) for his servant (employee), facilitated the development of both the civil and

criminal liability of corporations.’

7

Section 17 of the Companies Amendment Act 23 of 1939. See T B Barlow ‘The criminal

liability of a company, its directors and its servants’(1946)63 SALJ 502 for a discussion of the

provisions of this section.

49

THE CRIMINAL LIABILITY OF CORPORATE BODIES

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