Liability of collective subjects – planned changes

The Act on liability of collective subjects for acts prohibited under punishment is in force in Poland since 27 November 2013. The practical significance of that regulation has proved to be small as evidenced by the relatively small number of cases in the court against collective entities.

The draft of the new Act prepared by the Ministry of Justice aims at increasing the effectiveness of regulations which is to be synonymous to the increase in the number of cases in which a collective entity will be liable next to a natural person, also independently of it.

General rules

The most important differences compared to the existing regulations are to consist primarily in :

• extending the scope of liability of collective entities and making it include not only the behaviour specific to natural persons who fulfil the criteria of prohibited acts but also the collective entity’s own behaviour,
• resignation from the necessity to issue first convicting judgment of a natural person so that the collective entity could be held liable.

Thus, the existence of negative premises for criminal prosecution in relation to a natural person will not exclude the criminal liability of the entity to which activity the act was related.

These are revolutionary changes which can create a tool from institutions of marginal significance that will be commonly used by law enforcement agencies in matter of criminal economic and fiscal law.

Scope of liability

According to the new rules, a collective entity will be liable for prohibited act that was related directly to its economic activities if the criteria are exhausted as a result of the actions or omissions of the body as well as intentional action or omission of a member of the body.

In addition, the liability of the collective liability will extend to acts committed by:

• a natural person authorised to represent it, take decisions or supervise it,
• a natural persons authorised to act by its body,

• a person employed by it in connection to rendering work for it.

The scope of persons for which the collective entity will be liable will be even greater if there is financial gain (even indirectly) as a result of prohibited act committed by subcontractor or other entrepreneur who is a natural person or employee or a person authorised to act in the interest or on behalf of such entrepreneur. The condition of liability is that managing persons should know or be able, with due diligence, to find out about attempts to commit or committed prohibited act or stating that a certain type of organisational irregularity occurred in a collective entity.

Collective entity’s own liability

An important novelty is the introduction to the Act a number of cases in which a collective entity is liable despite circumstances that would indicate absence of liability.

First of all, the liability continues despite the circumstance excluding criminal liability of the perpetrator of the prohibited act, despite the death of the perpetrator, discontinuation of the proceedings due to the failure to detect the perpetrator, as well as stay of the proceedings in a case in which the accused may not be found or the accused may not participate in the proceedings because of mental illness or other serious illness.

A collective entity is also liable when the composition has been changed since committing the prohibited act as well as when the prohibited act was committed by the act or omission of many bodies or persons and when the identity of persons acting in the interests or on behalf of the collective entity or person who allowed the perpetrator to act.

The liability of collective entities in the draft act is shaped in a very broad way and in order for the collective entity to release itself from liability it will be necessary to introduce a number of internal regulations under the so-called criminal compliance.