Photo: Melissa KellyRegina Robson, J.D.

Photo: Melissa KellyRegina Robson, J.D.

Can a Business Organization
Be a Criminal?

A wry observer once remarked, “no one is innocent, but there are different degrees of responsibility.” An Arrupe Center Fellow, Associate Professor Regina Robson, J.D., has focused on how the law determines the “degrees of responsibility” for business misconduct and under what circumstances business organizations themselves can be deemed “criminal.”

In her article, Crime and Punishment: Rehabilitating Retribution as a Justification for Organizational Criminal Liability, Dr. Robson explores the current trend to regulate business organizations using criminal law rather than a civil regulatory scheme. The United States leads developing nations in the number of regulatory offenses that can result in the imposition of criminal penalties. Such “criminalization” of economic activities has distorted traditional concepts of criminal jurisprudence. “In the past,” Dr. Robson observed, “there was a close relationship between ‘sin’ and ‘crime.’ Crimes had a moral content that made it easy to determine what was permitted and what was prohibited. Today, the term ‘crime’ is sometimes assigned to conduct which is simply ‘undesirable.’ Some crimes involve such complicated economic scenarios that it can be difficult to determine when and how the law applies.”

In addition to criminalizing certain aspects of economic activity, the process of corporate decision-making does not fit neatly within traditional concepts of criminal intent. “Traditional criminal jurisprudence posits the existence of a blameworthy actor – one who intends or at least recognizes the potential criminality of his actions. In the context of organizational liability, however, companies have been found criminally liable even when no single individual within the firm was found guilty.” 

Dr. Robson argues that the increase in the number of activities that are labeled as crimes coupled with an expansion of ‘strict liability’ crimes has actually diluted the impact of criminal law as a deterrent to organizational misconduct. “A strict liability crime punishes a company not for what it did, but for ‘what happened,’” Dr. Robson remarked, “without regard to the organization’s efforts to prevent the misconduct. In a strict liability crime, even an organizations’ best efforts’ may be insufficient to avoid liability.”

Widespread use of criminal sanctions for behavior which is “undesirable” rather than reprehensible may make criminal fines a “cost of doing business.” Dr. Robson observed,  “Just as an overprescribed antibiotic can lose it efficacy, unfettered use of criminal sanctioning of behavior that lacks moral content or a blameworthy intent dilutes the stigmatizing power of criminal law.”

Managing organizational conduct through a criminal schema rather than a civil approach can have unintended consequences. “When a company faces criminal sanctioning,” Dr. Robson noted, “everyone suffers – suppliers, communities, clients and innocent employees all pay – even though they may not have contributed to the misconduct. Moreover, criminal fines are paid, not to the victims of the crime but to the government. In some instances, a company may be left with insufficient resources to compensate victims.”            

In light of these challenges, many academic and legal scholars have advocated for the elimination of organizational criminal liability in favor of a civil regulatory scheme. In contrast, Dr. Robson argues that there is a purpose for criminal sanctioning. “While both criminal and civil sanctions can serve to deter undesirable conduct, only criminal law has the symbolic power to express community condemnation of the prohibited conduct. Labeling an activity ‘criminal’ announces that there are some actions that are so outrageous that they merit punishment, not solely to deter future misconduct, but to reaffirm community values.” Dr. Robson suggests that courts and legislatures need to redefine the circumstances which merit criminal sanctioning to ensure that criminal law does not lose its symbolic effect. “Criminal sanctioning is the ‘nuclear weapon’ of legal remedies,” Dr. Robson observes, “it should be reserved for those circumstances where the harm is potentially significant and the behavior of the organization was morally repugnant.” 

While Dr. Robson acknowledges that the recalibration of criminal law will not be easy, she is optimistic. “Criminal sanctioning best retains its potency when it is reserved for those behaviors that a community deems abhorrent. Determining under what circumstances the criminal law applies to business organizations is simply too important a question to be ignored.”

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