Issues:
I. Which common law and statute law makes a company criminally liable?
II. Discuss whether the actions of a low level employee result in criminal liability for a company for a regulatory offence not involving strict liability?
Rules:
I. Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
II. H L Bolton Co Ltd v T J Graham & Sons Ltd [1975] 1 QB 159
III. Tesco Supermarket Ltd v Nattrass [1972] AC 153
IV. Meridian Global Funds Management Asia Ltd v Securities Commission (1995) 13 ACLC 3245
V. ABC Development Learning Centres Pty Ltd v Wallace [2006] VSC 171
VI. The Criminal Code Act 1995 (Cth)
VII. The Corporation Act 2001
VIII. The Trade Practice Act 1974 (Cth)
IX. Crimes (Industrial Manslaughter) Act 1900
Apply Laws to Fact
Section 124 of the Corporations Act 2001 establishes a company as a separate legal entity which has the same characteristics as a natural legal person. Although a corporation lacks of physical existence, it does not prevent the company comply with common law and statute law being liable in relation to tort, crime and contract. It may enter into contract in its own name and can sue or be sued for failing to carry out its contractual obligation and therefore found liable for breaching that contract. As a result, the actions under criminal and civil law is found to be responsible to a corporation.
Before determining a company criminal liability, it is important to distinguish clearly two forms of liability:
• primary (or direct); and
• secondary (or vicarious) liability.
The primary liability incurs when the corporation is deemed to have committed wrongdoing itself. A corporation itself, however, has no capacity for physical action or the possession of intention or knowledge which differ from human beings. Denning LJ in H L Bolton stated that directors and managers were simply like human brain in a corporation which controlled its body (the corporation) by their directing mind and will. The state of mind of these decision makers represented the state of mind of the company and was treated by the law. As in criminal law, the directors or managers were found to be guilty mind would render the company itself guilty.
The secondary liability incurs when the corporation is found liable for the acts or omissions of a natural person. For instance, a person suffers serious injuries due to the lack of duty of care by a lower-level employee within the scope of employment. The lack of duty of care of that employee is to count as the lack of duty of care of the corporation.
Equuscorp Pty Ltd v Haxton; Equuscorp Pty Ltd v Bassat; Equuscorp Pty Ltd v Cunningham's Warehouse Sales Pty Ltd (2012) 246 CLR 498
(5 points) Based on the facts of the case you have selected, is it possible the employer can also be held criminally liable? Explain your answer.
Corporations functioning within the jurisdiction of the Australian Commonwealth are governed and regulated by the provisions of the Corporations Act, 2001. Common law principles developed through judicial
Cross, Frank B., and Roger LeRoy Miller. "Ch. 13: Strict Liability and Product Liability." The legal environment of business: text and cases, 8th edition. Mason, Ohio: Cengage Learning Custom Solutions, 2012. 294-297. Print.
The engineer breached the duty of care through failing his/her duty to warn by providing insufficient warning on the limitation of the application. His/her software application caused the structural firm to designed a defective bridge and was the direct cause of many deaths. The junior engineer should be held liable for his/her product due to the principle known as product liability. This is evident in the case study because deaths and injuries due to defective product as a result of the software were foreseeable. Looking at the 1971 case of Lambert v. Lastoplex Chemicals Co. Limited et al., the manufacturers must not only instruct the user how to properly use the products but also warn the user the consequences of misuse []. This precedent case proves that the engineer failed to warn the structural firm of the limitation of the application as well as failed to warn the consequences of using the application beyond its capabilities. However, the information technology firm may be held vicariously liable for the mistake of the junior engineer as he/she developed the software application during his/her employment. The reason being the employer generally has deeper pocket than the employee [] and the collapse was a result of the junior engineer developing the application under the authority of the employer. Thus, the junior engineer is one of the tortfeasor to which the information firm maybe vicariously liable for his/her
Below I will be analyzing the Responsibility for Accident case to find out the answer about the inquiry of who is responsible for a work accident – the employee or the company? First of all, I am going to look at every fact and different points of view of the case. I will also going to analyze the employee’s complains about the unsafe workplace. On the other hand, I will analyze what is the foreman’s defense to demonstrate that the employee is responsible for the accident and not the company.
Gillick v West Norfolk & Wisbeck Area Health Authority [1986] AC 112 House of Lords
To succeed in this case, Silton's attorney must prove all four elements of negligence. The first element of negligence is known as the duty. It means the Jumpin NightClub owned a duty of care to the plaintiff (Silton) (Miller & Cross, ch. 5-4). The second element of negligence is known as the breach. It means the Jumpin NightClub breached that duty (Miller & Cross, ch. 5-4). The third element of negligence is known as the causation. It means the Jumpin NightClub's breach caused the plaintiff's injury (Silton's injury) (Miller & Cross, ch. 5-4). The fourth element of negligence is known as the damages. It means the plaintiff (Silton) suffered a legally recognizable injury (Miller & Cross, ch. 5-4). Based on the case, Silton was in the club,
We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
In 2001, Australian legislation that sets out laws that govern business entities under both state and federal governments was passed. Implemented as the Corporations Act 2001 (Cth), the Act sets out rules and regulations for the standard that businesses should be operating in Australia, including the creation of new companies and how they conduct their operations.1 The Act is administered under the Australian Securities and Investments Commission (ASIC) who are a government body responsible for implementing corporate laws and holding businesses accountable for their wrongdoings.2 In relation to business ethics, stating that corporate law was designed to enhance this area of business implies that legislators have business ethics as a priority when determining the purpose of new legislation that is being passed. Business ethics is the body of principles that business people ought to follow when behaving in the workplace, as well as the moral attitudes they should adopt.3 By incorporating provisions in the Corporations Act 2001 (Cth) that enable ASIC to deal with those who do not follow
Vicarious liability is incident only to a relationship of controlled employment, tr... ... middle of paper ... ... n any case the insurance premium that covers the claim is generally cheaper than if the employer was to directly compensate the tort victim. Therefore, the principle of vicarious liability is the best compromise which could have been reached between the needs of tort victims for compensation and the freedom of businesses to operate without excessive burdens. --------------------------------------------------------------------- [1] P418.
In company law, registered companies are complicated with the concepts of separate legal personality as the courts do not have a definite rule on when to lift the corporate veil. The concept of ‘Separate legal personality’ is created under the Companies Act 1862 and the significance of this concept is being recognized in the Companies Act 2006 nowadays. In order to avoid personal liability, it assures that individuals are sanctioned to incorporate companies to separate their business and personal affairs. The ‘separate legal personality’ principle was further reaffirmed in the courts through the decision of Salomon v Salomon & Co Ltd. , and it sets the rock in which our company law rests which stated that the legal entity distinct from its
The Principle of Separate Corporate Personality The principle of separate corporate personality has been firmly established in the common law since the decision in the case of Salomon v Salomon & Co Ltd[1], whereby a corporation has a separate legal personality, rights and obligations totally distinct from those of its shareholders. Legislation and courts nevertheless sometimes "pierce the corporate veil" so as to hold the shareholders personally liable for the liabilities of the corporation. Courts may also "lift the corporate veil", in the conflict of laws in order to determine who actually controls the corporation, and thus to ascertain the corporation's true contacts, and closest and most real connection. Throughout the course of this assignment I will begin by explaining the concept of legal personality and describe the veil of incorporation. I will give examples of when the veil of incorporation can be lifted by the courts and statuary provisions such as s.24 CA 1985 and incorporate the varying views of judges as to when the veil can be lifted.
NET failed to recognize or react to either situation. It is imperative to understand that NET was liable for its employees but the employees, as individuals were also liable for their actions. NET lacked the system controls necessary to keep the company liability to a minimum on this issue. Usually with failures such as these, the system internal controls are this company is lacking the most. Ethical behavior among management is key to ethical behavior among employees.