Regulatory Offences and Corporate Crime

• Author: Kent Roach
• Profession: Faculty of Law and Centre of Criminology University of Toronto
• Pages: 184-214

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Regulatory offences are enacted by the federal, provincial, and munic-

ipal governments and they far outnumber offences under the Criminal

Code. Regulatory or public welfare offences emphasize the protection

of the public from the risk of harm and the regulatory interests of the

modern state, as opposed to the punishment of inherently wrongful

and harmful conduct. A person or a corporation is convicted for per-

forming a regulated activity without a licence or for failing to take

specified safety prosecutions not because such non-compliance must

be denounced and punished, but because it frustrates the regulatory

ambitions of the modern state and creates a danger of harm. Courts

have fashioned distinct rules to make it easier for the state to investi-

gate and prosecute regulatory offences.

Traditionally, Canadian courts were faced with the stark choice of

interpreting a regulatory offence to require either absolute liability, in

which a conviction followed from the commission of the prohibited

act, or proof beyond a reasonable doubt of a subjective fault element.

The former standard could impose liability without fault, while the lat-

ter might frustrate the objectives of the regulatory scheme by requiring

the Crown to prove that someone in a large organization had guilty

knowledge. A third option, strict liability, has now emerged to domi-

nate the field. Absolute liability offences are now vulnerable under sec-

tion 7 of the Charter, at least when they deprive individuals of life,

liberty, or security of the person by imposing terms of imprisonment.

Regulatory Offences

and Corporate

Crime

chapter 5

Strict liability offences require fault based on negligence, and for

this reason they satisfy the requirement under section 7 of the Charter

that the morally innocent who act without fault not be punished. They

do, however, violate the presumption of innocence under section 11(d)

of the Charter. After the Crown proves the prohibited act of a strict lia-

bility offence beyond a reasonable doubt, negligence is presumed, and

the accused must establish that it was not negligent. The accused

makes its case by establishing on a balance of probabilities a defence of

due diligence or reasonable mistake of fact. This approach violates the

presumption of innocence by allowing a conviction even if there is a

reasonable doubt about whether the accused was negligent. Neverthe-

less, it has been held to be justified because of the danger of acquitting

an accused who has entered a regulated field and committed an actus

reus when there is only a reasonable doubt about negligence. An

accused who enters a regulated field can be expected to bear the bur-

den of establishing that it was not negligent in allowing a harmful or

dangerous act to occur.

Regulatory offences frequently apply to corporations that have

engaged in harmful conduct such as pollution, misleading advertising,

or violations of health, safety, or licensing requirements. The difficulty

of establishing fault in a large organization is one of the reasons why it

is the accused who must establish a lack of negligence when charged

with a strict liability offence. When a corporation is charged with a

criminal offence, however, it is necessary to find someone within the

corporation who has the required fault. That individual must have

enough responsibility within the corporation so that his or her fault

can be attributed to the corporation and the Crown must prove fault

beyond a reasonable doubt. This makes it considerably more difficult

to convict a corporation of a criminal offence than a regulatory offence.

Until recently, only the fault of a “directing mind” of the corpora-

tion could be attributed to the corporation for the purpose of establish-

ing its criminal liability. At the end of 2003, Parliament introduced

extensive reforms designed to make it easier to convict and punish cor-

porations and other organizations for criminal offences. The common

law concept of a “directing mind,” which had previously been restrict-

ed to those who had enough power to establish corporate policy, was

replaced by a new statutory concept of a corporate “senior officer.”

This position includes not only those who play an important role in

establishing a corporation’s policies, including its board of directors,

chief executive officer and chief financial officer, but also those who are

“responsible for managing an important aspect of the organization’s

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