Regulatory Offences and Corporate Crime

AuthorKent Roach
Regulatory oences are enacted by the federal, provincial, and munici-
pal governments. They far outnumber oences under the Crimina l Code.
Regulatory or public welfare oences emphasize the protection of the
public from the risk of harm and t he regulatory interests of the modern
state, as opposed to the punishment of inherently wrongful and ha rm-
ful conduct. A person or a corporation is convicted for performing a
regulated activity w ithout a licence or for failing to take sp ecif‌ied safety
precautions, not because such non-compliance must be denounced and
punished, but because it fru strates the regulatory ambitions of the mod-
ern state and creates a d anger of harm. Courts have fashioned distinct
rules to make it easier for the state to investigate and prosecute regula-
tory oences.
Traditionally, Canadian courts were faced w ith the stark choice of
interpreting a regulatory oence 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 latter
might frustrate t he objectives of the regulatory scheme by requiring
the Crown to prove that someone in a large organization had guilty
knowledge. A third option, strict liabil ity, has now emerged to dominate
the f‌ield. Absolute liability oences are now vulnerable under section 7
of the Charter, at least when they deprive individuals of life, liberty, or
security of the pers on by imposing terms of impr isonment.
Regulator y Oences and Corpor ate Crime 253
Strict liability oences requ ire fault based on negligence, and for this
reason they satisf y the requirement under section 7 of the Char ter 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 liabil-
ity oence beyond a reasonable doubt, negligence is presumed, and the
accused must establish t hat it was not negligent. The accused makes its
case by establi shing on a balance of probabilities a defence of due dili-
gence or reasonable mistake of fact. This approach v iolates the presump-
tion of innocence by allowing a conviction even if t here is a reasonable
doubt about whether the accused was negligent. Nevertheless, it ha s
been held to be justif‌ied becaus e of the danger of acquitting an accused
who has entered a regulated f‌ield and comm itted an actus reus when
there is only a reasonable doubt about negligence. An accused who enters
a regulated f‌ield can be ex pected to bear the burden of est ablishing that
it was not negligent in allowing a har mful or dangerous act to occur.
Regulatory oences frequently apply to corporations t hat have
engaged in harmful conduct such as pollution, misleading advertising,
or violations of health, safety, or licensing requirements. The diculty
of establishing fault in a la rge organization is one of the rea sons why it is
the accused who must establish a l ack of negligence when charged with
a strict liability oence. Negligence for regulatory oences a lso does not
have to be the marked depart ure from reasonable stand ards required
when negligence is required for a crimin al oence.
When a corporation is charged with a crimin al oence, however,
it is necessary to f‌ind someone within the corporation who has the
required fault. That individual must have enough responsibility wit hin
the corporation that their f ault can be attributed to t he corporation and
the Crown must prove fault beyond a reasonable doubt. This makes
it considerably more dicult to convict a corporation of a crimi nal
oence than a regulatory oence.
Traditionally, only the fault of a “directing mind” of the corporation
could be attributed to the corporation for the purpos e of establishing its
crimina l liability. At the end of 2003, Parliament introduced extensive
reforms designed to make it easier to convict and punish corporations
and other organizations for cri minal oences. The common law concept
of a “directing mind,” which had previously been restricted to t hose who
had enough power to establish corporate policy, was replaced by a new
statutory concept of a corporate “senior ocer.” This position includes
not only those who play an important role in est ablishing a corpora-
tion’s policies, including its board of directors, chief executive ocer,
and chief f‌inancial ocer, but also those who are “responsible for man-
aging an important aspect of the organization’s activities.”1 Parliament
also specif‌ied the fault required by the senior ocer in order to convict
the corporation of a negligence-based criminal oence2 and a subjective
intent crimina l oence.3 The criminal l iability of corporations and other
organizations is st ill based on the attr ibution of the fault of individuals
to the organizations, but Parliament h as replaced the common law def-
inition of a corporation’s directing mind with a broader concept that
allows the fault of its senior ocers to be attributed to the organization.
An absolute liability oence requires the Crow n to prove the commission
of the prohibited act beyond a reasonable doubt, but does not require
proof of any additional fault element such as guilty knowledge or neg-
ligence. For oences 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 has be en controversial. Supporters of absolute liabilit y argue
that its imposition can p ersuade a person or an organization to take
additional measure s to prevent the prohibited act. Opponents stress
that the imposition of absolute liability can punish the morally inno-
cent, and that one who has not acted with subjective fault or negligence
cannot be expected to do any thing more to prevent the prohibited act.5
Courts have recognized oences as requiring absolute liability
when they have been convinced that the legislature did not intend the
Crown to prove fault or that such a requirement would frustrate the
purpose of the statute. In R v Pierce Fisheries Ltd,6 t he Supreme Court
held that the posses sion of undersized lobsters contrar y to regulations
under the Fisheries Act was an absolute liability oence. Justice Ritchie
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] 2 SCR 1299 at 1301 (SCC) [Sault Ste Marie].
5 In R v Hess, [1990] 2 SCR 906 (SCC) [Hess], Wilson J argued for the m ajority
that an absolute l iability oence for statutory rap e served no useful purp ose and
was unfai r to the accused who believed th at the girl was over fourteen yea rs
of age. In dissent , McLachlin J would have upheld the oence u nder s 1 of the
Canadian Char ter of Rights and Freedoms, Part I of the 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 [1971] SCR 5 [Pierce Fisheries].

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