Section II: Changing the Law under Bill C-45

[ Previous | Table of Contents | Next ]

---

The provisions of Bill C-45 are a compilation of the existing rules with new reforms, which will modernize the law to reflect the increasing complexity of corporate structures.  Bill C-45 deals only with the criminal responsibility of the organization and makes no change in the current law dealing with the personal liability of directors, officers and employees. Directors and officers, like anyone else, are liable for all crimes that they commit personally, whatever the context.

Why does C-45 refer to an organization rather than a corporation?

The Standing Committee hearings and the Government’s Response both dealt with corporate criminal liability.  However, the Criminal Code definition of “person” includes bodies in addition to corporations, and it is important to ensure that the same rules for attributing criminal liability apply to all forms of joint enterprises carried out by individuals, regardless of their structure.

In amendments to the Criminal Code in recent years, it has been necessary to develop new definitions because neither “person” nor “corporation” would cover all the “bodies” that may be involved in a crime.  For example, in 1997, “criminal organization” was defined as “a group, however organized” of three or more persons for the commission of criminal offences.   A biker gang would be an organization even if it were not a corporation or society.  Similarly, in 2001, the terrorism offences defined an “entity” as a person, group, trust, partnership or fund or an unincorporated association or organization.  A terrorist entity is not a corporation but it can have assets and its members commit crimes.

For this reason, Bill C-45 refers to an “organization” and then defines it to mean:

• “a public body, a body corporate, a society, a company” [This comes from the existing definition of “every one”]; and
• “a firm, a partnership, a trade union or an association of persons created for a common purpose.” [This is new].

These new provisions that define an “organization” will also  apply to other groups that have an operational structure and make themselves known to the public . This will ensure the law does not apply to an informal group that gets together regularly, for example, to discuss politics or to play bridge. 

Who are the “directing minds” of the organization?

In determining who is sufficiently important within the organization to be considered to be its directing mind, Bill C-45 refers to a “senior officer”. This is a more familiar expression than “directing mind”.  The definition of “senior officer” includes everyone who has an important role in:

• setting policy (which is the current Canadian law); or
• managing an important part of the organization’s activities (which is new).

The definition therefore focuses on the function of the individual, rather than on any particular title.  For example, the “executive assistant to the president” could have a great deal of authority and effectively speak for the president in one organization and have only minor administrative functions, like scheduling the president’s meetings, in another organization.

In addition, the new definition makes it clear that the directors, the chief executive officer and the chief financial officer of a corporation are, by virtue of the position they hold, automatically “senior officers”.  A corporation charged with an offence cannot argue that the individuals occupying these positions actually had no real role in setting policy or managing the organization and therefore were not senior officers.

What does it mean that an organization is a party to an offence?

The Bill refers to “a party to an offence”, and Section 21 of the Criminal Code provides that a person is a party to an offence if the person actually commits the offence or aids or abets another person to commit it.  Section 22 of the Criminal Code makes a person who counsels another person to commit an offence also a party to that offence.  Accordingly, the use of “a party to an offence” in Bill C-45 reflects both sections of the Code, providing a broader definition that will apply to more activities than only when an organization “commits an offence”.

For whose physical acts is an organization responsible?

To obtain a conviction, the Crown must prove both the commission of the prohibited act and the requisite guilty mental state.  Bill C-45 differentiates between crimes requiring the Crown to prove negligence (proposed s. 22.1) and crimes requiring the Crown to prove knowledge or intent (proposed s. 22.2), and establishes separate rules for each.

Currently, to prove the commission of the physical act by an organization, the Crown will usually show that the physical act was committed by employees of the organization.  However, it has been found that the term “employee” is not broad enough to capture all the individuals who may act on behalf of an organization.  Therefore Bill C-45 uses “representative,” which is defined under the proposed amendments to s. 2 to mean directors, partners, members, agents and contractors, as well as employees.  These representatives must be acting within the scope of their employment at the time of the alleged crime.

---

[ Previous | Table of Contents | Next ]