Corporate Liability

Corporate Liability determines the extent to which a corporation as a legal person can be liable for the acts and omissions of the natural persons it employs. It is sometimes regarded as an aspect of criminal Vicarious Liability, as distinct from the situation in which the wording of a statutory offence specifically attaches Liability to the corporation as the principal or joint principal with a human agent. The imposition of criminal Liability is only one means of regulating corporations. There are also civil law remedies such as Injunction and the award of Damages which may include a penal element. Generally, criminal sanctions include imprisonment, fines and community service orders. A company has no physical existence, so it can only act vicariously through the agency of the human beings it employs. While it is relatively uncontroversial that human beings may commit crimes for which punishment is a just desert, the extent to which the corporation should incur Liability is less clear.

Companies are held liable when the acts and omissions, and the knowledge of the employees can be attributed to the corporation. This is usually filtered through an identification, directing mind or alter ego test which proves that the employee has sufficient status to be considered the company when acting.