Regulatory Offences and Corporate Crime

AuthorKent Roach
Regulatory offences are en acted by the federal, provincial, and muni-
cipal governments. They far outnumber offences under the Criminal
Code. Regul atory or public welfare offences emphasize the protection
of the public from the risk of harm and the regulatory interests of t he
modern state, as opposed to the puni shment of inherently wrongful
and harmful conduct. A person or a corporation is convicted for per-
forming a regulated activ ity without a licence or for failing to take
specif‌ied safety precautions, not becau se such non-compliance must be
denounced and punished, but because it frustrates the regulatory am-
bitions of the modern state and creates a d anger of harm. Courts have
fashioned distinct r ules to make it easier for the state to investigate and
prosecute regulatory offences.
Traditionally, Canadian courts were faced w ith 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 li ability without fault, while the latter
might frustrate t he objectives of the regulatory scheme by requir ing
the Crown to prove that someone in a large organiz ation had guilty
knowledge. A third option, strict liability, has now emerged to dom-
inate the f‌ield. Absolute liability offences are now v ulnerable under
section 7 of the Charter, at least when they deprive individuals of li fe,
liberty, or security of the person by imposing terms of imprisonment.
Regulator y Offences and Corporate Cri me 241
Strict liability offences require fault based on negligence, and for
this reason they satisfy the requirement under sect ion 7 of the Charter
that the morally innocent who act wit hout 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
liability 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 bala nce of probabilities a defence of
due diligence or reasonable mistake of fact. Thi s 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 justi f‌ied 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 ac-
cused who enters a regulated f‌ield can be expected to bear the burden
of establishing th at it was not negligent in allowing a harmful or dan-
gerous act to occur.
Regulatory offences frequently apply to corporations that have en-
gaged in harmful conduct such as pollution, misleading advertising, or
violations of health, safety, or licensing requirement s. The diff‌iculty of
establishing fault in a l arge organization is one of the reasons why it is
the accused who must establish a l ack of negligence when charged with
a strict liability of fence. Negligence for regulatory offences also does not
have to be the marked depart ure from reasonable standards required
when negligence is required for a crimin al offence. When a corpora-
tion is charged with a cr iminal offence, however, it is necessary to f‌ind
someone within the corporation who has the required fault. That in-
dividual must have enough responsibil ity within the corporation so
that his or her fault can be att ributed to the corporation and the Crown
must prove fault beyond a reasonable doubt. This makes it consider-
ably more diff‌icult to convict a corporation of a crimin al offence than
a regulatory offence.
Traditionally, only the fault of a “directing mind” of the corporation
could be attributed to the corporation for the purpos e of establishing
its crimin al liability. At the end of 2003, Parliament introduced exten-
sive reforms designed to make it ea sier to convict and punish corpora-
tions and other organizations for criminal offences. The common law
concept of a “directing mind,” which had previously been restricted to
those who had enough power to establish corporate polic y, was replaced
by a new statutory concept of a corporate “senior off‌icer.” This position
includes not only those who play an important role in est ablishing 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 import ant aspect of the organization’s activities.”1 Par-
liament also speci f‌ied the fault required by the senior off‌icer in order
to convict the corporation of a negligence-based criminal offence2 and
a subjective intent criminal offence.3 The criminal liability of corpora-
tions and other organizat ions is still based on the att ribution of the
fault of individuals to the organizations, but Parliament has replaced
the common law def‌inition of a corporation’s directing mind w ith a
broader concept that allows the fault of its senior off‌icers to be attr ib-
uted to the organization.
An absolute liability offence requires t he Crown to prove the commis-
sion of the prohibited act beyond a reasonable doubt, but does not re-
quire proof of any additional fault element such as guilty knowledge
or negligence. For offences of absolute liability, “it is not open to the
accused to exculpate himself by showing that he was free of fault.”4
This form of liability ha s been controversial. Supporters of absolute
liability argue that its imposition can persuade a per son or an organ-
ization to take additional measures to prevent the prohibited act. Op-
ponents stress th at the imposition of absolute liability can punish t he
morally innocent, and that one who has not acted w ith subjective fault
or negligence cannot be expected to do anyt hing more to prevent the
prohibited act.5
Courts have recogni zed offences as requiring absolute liabil ity
when they have been convinced that t he legislature did not intend the
Crown to prove fault or that such a requirement would frustrate t he
purpose of the statute. In R v Pierce Fisheries Ltd,6 the Supreme Court
1 Criminal Code, RSC 1985, c C-46, [Code], s 2 (as amended by SC 2003, c 21).
2 Ibid, s 22.1.
3 Ibid, s 22.2.
4 R v Sault Ste Marie (City) (1978), 40 CCC (2d) 353 at 374 (SCC) [Sault Ste Marie].
5 In R v Hess (1990), 59 CCC (3d) 161 (SCC) [Hess], Wilson J argued for the ma-
jority that a n absolute liability offence for stat utory rape served no usef ul pur-
pose and was un fair to the accused who bel ieved that the girl was over four teen
years of age. In di ssent, McLachlin J would ha ve upheld the offence under s 1 of
the Canadian Ch arter of Rights and Freedoms, Part I of t he Constitution Act, 1982,
being Schedule B to t he Canada Act 1982 (UK), 1982, c 11, on the basis that it
would discourage men f rom having sex with g irls who might be under fourteen
years of age.
6 [1970] 5 CCC 193 (SCC) [Pierce Fisheries].

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