liability without culpability

One of the now-standard storylines about the global financial crisis is that despite all the chaos very few corporate executives were prosecuted and even fewer went to jail. However, rather than interpreting these circumstances to suggest that there was insufficient evidence to convict corporate executives beyond a reasonable doubt, some observers have decided that the problem was that there is something wrong with our criminal justice system.

One observer who has made a hobby horse out of these issues is the U.S. Senator and Presidential Candidate, Elizabeth Warren. Senator Warren has now introduced new legislation that would lower the standard of criminal liability for corporate executive. Among other things, the new legislation would make corporate executives criminally liable for mere negligence in certain circumstances, even in the absence of the degree of intent that has for centuries been viewed in our legal system as the indispensable basis for a criminal conviction. As discussed below, this legislation is not only a bad idea in terms of our country’s corporate competitiveness, it also threatens one of our legal system’s bedrock principles.
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A new Ontario statutory provision affecting the liability of directors and officers of dissolved corporations for environmental remediation costs recently caught my attention. As discussed in a December 5, 2016 memo from the Dentons law firm (here), apparently Ontario corporations have been in the past voluntarily dissolving in order to try to avoid environmental clean-up. Under provisions of the Forfeited Corporate Property Act 2015, which comes into force on December 10, 2016, along with related amendments to the Ontario Business Corporations Act, corporate dissolution will no longer protect former directors and officers from environmental liabilities. This statutory change, which is consistent initiatives in a number of jurisdictions to try to impose liability on corporate and officers without regard to culpability, raises a number of concerns and also highlights a number of larger issues.
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aabdBanking industry commentators have long contended that aggressive efforts by the FDIC and others to hold bank developers liable is having a chilling effect on the willingness of existing and potential directors to serve on bank boards. An April 2014 American Association of Bank Directors report of a recent survey of banks and savings institutions

Under the Responsible Corporate Officer Doctrine, corporate officials can be held liable for misconduct in which they did not participate and of which they have been entirely unaware, based on their responsibility for the corporation itself. As shown in a July 27, 2012 opinion from the District of Columbia Court of Appeals (here