TOPIC ELEVEN: PROSECUTION OF CORPORATIONS
Background
The meaning of corporation and corporate body are not defined in the CPA, thus the
ordinary meaning applies, i.e. any artificial body having corporate personality and
includes a company, close corporation, statutory body with corporate personality (e.g.
SABC), municipality, university and the government
The prosecution of corporations is now governed by s332 of the CPA but this
provision dates back to the 1917 CPA. The current form of corporate liability was
introduced in the 1939 CPA
Why the need to prosecute corporations?
o Dominant position of corporations in the modern world
o Ability to defy the law if no corporate liability
o Impact of corporations on financial systems, the environment, worker safety and
public safety
o If there were no proper way to prosecute, it would encourage corporate to resort
to criminal means to achieve their ends
o Need for special measures to overcome the problem that corporations act
through human agency, and therefore have ‘no soul to damn and no body to
m
kick’
er as
o Ordinary measures and punishments would not always suffice, e.g.
co
imprisonment
eH w
The Scope of Section 332
o.
rs e
Section 332 has 3 main areas of concern:
ou urc
1. Imposition of corporate liability
2. Procedural measures for prosecuting corporations
3. Evidential measures to facilitate prosecution
o
aC s
1. Imposition of corporate liability: s332(1)
v i y re
Section 332(1): acts and omissions of directors and servants criminally attributed to
the corporate body if:
o In exercise of powers or duties of corporation, or
o In furthering or endeavouring to further interests of corporate body
ed d
The second part of this subsection extends the application of s332 and might be
ar stu
subject to constitutional challenges
This subsection is very wide and could theoretically even cover a crime such as murder
(R v Bennet, the judgment of which was approved in the SA Uitsaaikorporasie case)
Note that a company formed for an unlawful purpose will not be exempt from this
sh is
provision (R v Meer)
Th
R v Bennett
On a building site, K, a servant of Bennett, was lifting stones with a crane but negligently miscalculated
the weight of the stone and the crane, not strong enough to lift it, fell over and killed one of Bennett’s
other employees
The court held that inasmuch as K was negligent in carrying out his duties as a servant of the company,
such negligence must be imputed to the company, irrespective of any express or implied authority on
the part of the company
Therefore the company had rightly been convicted of culpable homicide by a magistrate
The court further noted that it was immaterial whether there was any knowledge express or implied, on
the part of any of K's superiors of such negligent operations, such as would have enabled such superior
to prevent the continuation of such negligence so as to produce the result of a forbearance creating an
implied authority
1
This study source was downloaded by 100000826075669 from CourseHero.com on 05-23-2021 04:45:58 GMT -05:00
https://www.coursehero.com/file/80213555/11-Prosecution-of-Corporatesdoc/
Background
The meaning of corporation and corporate body are not defined in the CPA, thus the
ordinary meaning applies, i.e. any artificial body having corporate personality and
includes a company, close corporation, statutory body with corporate personality (e.g.
SABC), municipality, university and the government
The prosecution of corporations is now governed by s332 of the CPA but this
provision dates back to the 1917 CPA. The current form of corporate liability was
introduced in the 1939 CPA
Why the need to prosecute corporations?
o Dominant position of corporations in the modern world
o Ability to defy the law if no corporate liability
o Impact of corporations on financial systems, the environment, worker safety and
public safety
o If there were no proper way to prosecute, it would encourage corporate to resort
to criminal means to achieve their ends
o Need for special measures to overcome the problem that corporations act
through human agency, and therefore have ‘no soul to damn and no body to
m
kick’
er as
o Ordinary measures and punishments would not always suffice, e.g.
co
imprisonment
eH w
The Scope of Section 332
o.
rs e
Section 332 has 3 main areas of concern:
ou urc
1. Imposition of corporate liability
2. Procedural measures for prosecuting corporations
3. Evidential measures to facilitate prosecution
o
aC s
1. Imposition of corporate liability: s332(1)
v i y re
Section 332(1): acts and omissions of directors and servants criminally attributed to
the corporate body if:
o In exercise of powers or duties of corporation, or
o In furthering or endeavouring to further interests of corporate body
ed d
The second part of this subsection extends the application of s332 and might be
ar stu
subject to constitutional challenges
This subsection is very wide and could theoretically even cover a crime such as murder
(R v Bennet, the judgment of which was approved in the SA Uitsaaikorporasie case)
Note that a company formed for an unlawful purpose will not be exempt from this
sh is
provision (R v Meer)
Th
R v Bennett
On a building site, K, a servant of Bennett, was lifting stones with a crane but negligently miscalculated
the weight of the stone and the crane, not strong enough to lift it, fell over and killed one of Bennett’s
other employees
The court held that inasmuch as K was negligent in carrying out his duties as a servant of the company,
such negligence must be imputed to the company, irrespective of any express or implied authority on
the part of the company
Therefore the company had rightly been convicted of culpable homicide by a magistrate
The court further noted that it was immaterial whether there was any knowledge express or implied, on
the part of any of K's superiors of such negligent operations, such as would have enabled such superior
to prevent the continuation of such negligence so as to produce the result of a forbearance creating an
implied authority
1
This study source was downloaded by 100000826075669 from CourseHero.com on 05-23-2021 04:45:58 GMT -05:00
https://www.coursehero.com/file/80213555/11-Prosecution-of-Corporatesdoc/
