If a company steals, can it be sent to jail?
L ast year a very peculiar news item appeared in the American press: a political activist by the name of Jonathan Friedman was tried and sentenced by a California court for having driven alone in a carpool lane, a special highway lane reserved for cars carrying a minimum of two (or sometimes three) passengers.
Friedman told the court that he was not the only person in the car, because the incorporation papers of one of his family’s companies were on the passenger seat next to him. In fact, California’s vehicle code and current federal legislation do state that the word ‘person’ includes both individuals and companies.
His protest had nothing to do with the existence of carpool lanes: he was out to challenge a legal principle that has been rooted in Anglo-Saxon legislation for almost two centuries – that a juridical person may be recognised by law as an individual and have the same rights and duties as a natural person – yet is still partially inhibited by legal doctrine. But what, then, is a juridical person? For over a century, jurists, especially in Europe, have been musing about its nature and the reasons why legal systems apply laws to such entities that are usually applied to natural persons.
Seeing as a ‘human being’ has always been considered a person capable of performing legally relevant deeds, the problem then arose of explaining how a legislator is meant to assign legally relevant volition and interests to organised entities that are distinct from those of the natural persons who act on behalf of these entities.
A number of theories have been put forward in Europe, including the socalled ‘fiction’ theory, whereby legal capacity can be extended by law to artificially created entities, and the more pragmatic ‘realist’ theory, according to which a juridical person is a kind of superhuman to be considered as a legal entity just like a natural person because it acts and pursues goals in the same way.
The argument used to counter such a stand is that volition is a psychological phenomenon that can only be attributed to a human being and, therefore, only human beings can have a legal personality. The rights and duties of a juridical person are rights and duties only for the natural persons comprising it and it is the legal system that decides what type of behaviour (perpetrated that is by natural persons) needs regulating. Therefore, the juridical person does not exist in and of itself but amounts to a set of rules that govern the behaviour of natural persons.
Despite all the various theoretical debates, modern legal systems have increasingly equated the legal capacity of corporate entities to those of natural persons. In particular, we can say that the most important development has taken place in the last decades with the acknowledgment of corporate criminal liability. This revolution has essentially concerned civil law systems (particularly in Italy and France), seeing as in Anglo-Saxon countries the concept of criminal liability for entities and its admissibility has been accepted for over a century.
In Anglo-Saxon common law legal systems, the unchecked increase in illegal behaviour committed in the name and interests of companies meant that by the early 20th century the courts began to broaden the scope of corporate criminal liability. The numerous legal precedents generated in Britain and in many American states ultimately led to the development of the rules governing corporate criminal liability.
The decision of European legislators to introduce forms of liability for collective entities was also brought about by the widespread increase of corporate crime. The exponential growth of industrial enterprises now means that the majority of economic and commercial transactions are performed by juridical persons, despite the fact that their names and interests are usually managed by natural persons. So we have finally surpassed the ancient principle dear to the rules of Roman law whereby societas delinquere non potest – companies cannot offend. Even legislators in civil law countries are convinced of the need to prevent and punish so-called corporate crimes.
That need also arises out of the impossibility of identifying the persons responsible for the illicit conduct, owing to the increasing complexity of many corporate decision-making processes. The Council of Europe recently recommended that EU states implement corporate liability, “whether a natural person who committed the acts or omissions constituting the offence can be identified or not.” The European legislators have not, however, gone so far as to identify the nature of this liability, leaving the decision up to the individual state, but measures have been called for to ensure that the juridical person be punished with effective and just sanctions.
As a result, in certain civil law judicial systems that have been more reluctant to introduce a form of culpability for juridical persons – such as Germany, Italy and Spain – corporate criminal liability has been deemed an administrative matter, virtually a tertium genus [‘third genre’] form of accountability.
Midway between criminal and administrative liability, it is a compromise for overcoming the hurdles posed by those who believe organisations to be devoid of an independent will and any form of true criminal behavior.
L ast year a very peculiar news item appeared in the American press: a political activist by the name of Jonathan Friedman was tried and sentenced by a California court for having driven alone in a carpool lane, a special highway lane reserved for cars carrying a minimum of two (or sometimes three) passengers.
