12.4 Negligence

Commonwealth Criminal Code: Guide for practitioners

12.4 Negligence

(1) The test of negligence for a body corporate is that set out in section 5.5.

(2) If:

  1. (a) negligence is a fault element in relation to a physical element of an offence; and
  2. (b) no individual employee, agent or officer of the body corporate has that fault element;

    that fault element may exist on the part of the body corporate if the body corporate’s conduct is negligent when viewed as a whole (that is, by aggregating the conduct of any number of its employees, agents or officers).

(3) Negligence may be evidenced by the fact that the prohibited conduct was substantially attributable to:

  1. (a) inadequate corporate management, control or supervision of the conduct of one or more of its employees, agents or officers; or
  2. (b) failure to provide adequate systems for conveying relevant information to relevant persons in the body corporate.

Overview

There is a strong distinction between proof of corporate negligence and the other forms of corporate fault in Part 2.5. Intention, knowledge and recklessness each require proof that a particular employee, agent or officer of the corporation realised the nature of the conduct in which they were engaged and the risk that circumstantial and consequential elements of the offence existed or would eventuate.  Negligence, which is a marked or gross failure  to meet required levels of care, does not require proof that risks were known or contemplated by either the agent or the corporation. Instead, the prosecution must prove departure from the standard of care which would   be exercised by a reasonable person in the circumstances: 5.5 Negligence. Unlike s12.3, which bases the attribution of corporate fault on a finding of individual fault, s12.4 permits a finding of negligence against a corporation in circumstances where none of its agents were guilty of negligence.

Negligence requires proof of a “great falling short of the standard of care that a reasonable person would exercise,” coupled with a “high risk” of incriminating circumstances or consequences: 5.5 Negligence. The departure from reasonable standards must be sufficiently marked and the risk sufficiently high to justify the imposition of criminal punishment. It is implicit in the provisions that the standard against which the defendant corporation is to be judged is the standard expected of a reasonable corporate actor.387 The liability of the corporation for failure to take care is not constrained by the possibly limited capacities of its agents.

Chapter 2 is quite explicit in its recognition of the principles of organisational or collective blameworthiness. Corporate negligence may arise from an aggregation of particular failures of foresight and precaution none of which, taken singly, would justify the imposition of criminal punishment: “Where fault is pervasive throughout an organization, and where the contribution    of any one individual to the disaster is but a small part of a complex whole, the temperate course is to rely on corporate liability rather than prosecute a few scapegoats.”388

The criteria for corporate negligence in s12.4(3) are the same as those defining absence of due diligence in 12.5 Mistake of fact (strict liability). It should not be assumed, however, that negligence and “failure to exercise due diligence” are the same thing when corporate liability is in issue. Section 12.4(3) is an evidentiary provision. Though it suggests some criteria for corporate negligence, it is not exhaustive. There are other ways in which corporate negligence can be established. And, though the criteria for corporate negligence overlap with failures of due diligence, the standard of care required of the corporation is different. Negligence, unlike failure to match the due diligence standard, requires a great falling short of a reasonable standard, in circumstances of high risk: 5.5 Negligence.

  1. There are two significant grounds for the implication: (a) corporate negligence can be imposed in the absence of negligence by individual employees, agents or officers (s12.4(2) and (b) corporate negli- gence can be proved by establishing absence of adequate “corporate management, control or super- vision” and “failure to provide adequate systems for conveying relevant information to relevant persons within the body corporate”: s12.4(3). These criteria require reference to standards of appropriate corporate behaviour. See also, B Fisse, Howard’s Criminal Law (1990), 614.

  2. B Fisse, Howard’s Criminal Law (1990), 593-594.