On May 28, 2018, a draft law on the responsibility of collective entities for criminal acts was published on the pages of the Parliament. The new law is intended to increase the effectiveness of pursuing liability against large-scale actors - in other words, one can pose the thesis that it targets the operation of corporations. The model probably included such situations as poisoning the environment as a result of a conscious decision by the board of directors, falsification of research results, introduction of defective products, concealment of side effects of drugs, landfill fires, fiscal crimes, etc. In practice, however the scope of the law is not limited and can apply to any collective entity (e.g., any company), any crime and fiscal crime committed by managers acting in their official capacity.
The following are the basic premises of the bill:
- For whose actions will the corporation be held accountable? A collective entity (i.e., e.g., a corporation/company) under the draft will be liable for a criminal act committed in connection with the entity's business, by: (i) body or member of this body (management, supervisory board), (ii) attorney, proxy, employee - if the corporation has derived even an indirect financial benefit from the criminal act committed by them.
- What acts will the corporation be liable for? Liability will be possible in the event of an intentional act or omission, as well as failure to exercise the care required under the circumstances by the authority, a member of the authority or a person indicated above. In addition, in the cases indicated in the draft, the premise for the liability of the collective entity will be the so-called "liability". fault in choice or supervision and organizational fault. Thus, the corporation may be liable for hiring an employee/entity that did not provide a guarantee of due performance of its functions and for improper supervision and organization.
- How will the corporation be able to avoid liability? It will only be possible for a corporation to avoid liability if it can prove that it acted with the due diligence required under the circumstances, in the organization of its activities and in the supervision of those activities.
- What safeguards does the law provide? The draft provides for the possibility of establishing a security interest in the property of a collective entity and applying receivership to the collective entity.
- Will a prior conviction of the manager be necessary? It will not be necessary to obtain a conviction of an individual in order to impose a penalty on a collective entity - it will be sufficient to show that a criminal act has been committed. This is the biggest novelty in the bill and a significant risk. We have some doubts about the constitutionality of such a solution.
- What about so-called anonymous guilt? The collective entity will be held liable for the criminal act even if the perpetrator of the act could not be identified - there will be the possibility of attributing liability directly to the collective entity.
- What will be the penalties for violating the law? The draft law provides for two types of penalties to be adjudicated by the court: a fine or dissolution/liquidation of the collective entity. The amount of the penalties will reach PLN 30,000 to 30,000,000. However, in some cases, instead of a fine, the court will be able to order one or more of the measures listed in the wording of the draft, such as: forfeiture of property, prohibition of promotion or advertising of the activity carried out, prohibition of carrying out a certain type of activity, prohibition of the use of subsidies, making the verdict public.
The bill is in the opinion stage. In our opinion, if it is passed in its current form - it will significantly affect the insurance market and the way managers are hired. On the one hand, corporations should seek to reduce the risk of liability for the actions of managers (especially some arbitrariness). Therefore, we should expect changes in the models of managerial contracts, and most importantly increase in the importance of compliance-type procedures in corporations - protecting them from direct liability for the actions of employees. On the other hand - managers may be afraid to take risks for fear of possible recourse from the corporation that will bear the responsibility. It seems that this gap will be filled The rise in importance of D&O management insurance (Directors and Officers).
