Michael Ford

Case may signal shift to Americanization of corporate prosecutions

The outcome of the upcoming trial of a Quebec company on a charge of criminal negligence causing death will be precedent-setting, as a conviction would signal a turn toward Americanizing the way the Canadian legal system manages corporate wrongdoing, Toronto criminal and civil litigator Laurelly Dale writes in The Lawyer’s Daily.

As Dale, principal of Dale Legal Firm, explains in the article, the company is the first in Canada to proceed to trial on this charge. The case concerns the 2009 drowning deaths of three miners.

Although Canadian companies fall within the broadly defined ‘organizations’ in s. 2 of the Criminal Code and are subject to criminal liability, Dale writes that Canada has historically adopted a relaxed prosecutorial attitude toward companies in favour of deferring convictions and penalties to the respective provincially regulated occupational health and safety legislation.

In this case, she writes, the company “is being prosecuted under s. 22.1 of the Criminal Code, also known as the ‘Westray Bill,’ the law introduced after the catastrophic explosion in a Nova Scotia mine in 1992 killed 26 workers.”

This section, if proved beyond a reasonable doubt by the Crown, will hold the company liable as a party to the offence of criminal negligence causing death, explains Dale.

“Other amendments were added such as establishing a legal duty under which corporations are held; creating a specific offence for theft/fraud; and addressing sentencing. There have only been two convictions and one guilty plea since the bill was passed in 2003,” writes Dale.

Elsewhere, one law professor notes that as much as 14 per cent of U.S. prosecutions against companies since 2001 have involved foreign firms, she says.

One Montreal-based engineering company is facing corruption charges related to bribery in the U.S. and Britain, writes Dale, but a stumbling block in the resolution of the matter relates to the refusal by Canadian prosecutors to enforce “deferred prosecution agreements” frequently employed in the U.S.

“The agreements, entered into between the company and the prosecutors, allow companies to avoid risky trials and (sometimes) a guilty plea by agreeing to pay multimillion-dollar fines,” she explains.

Although critics of deferred prosecution agreements or out-of-court settlements are concerned about a lack of transparency, Dale says pre-trial negotiations and settlements are confidential, akin to solicitor-client privilege as set out by the Supreme Court of Canada.

If the Quebec company is successfully prosecuted, Dale says resources would need to be devoted toward investigation and prosecution of companies under the Criminal Code and the Crown would have to reconsider its position on deferred prosecution agreements.

“The combined impact of increased prosecution under the code and fines levied against these companies could generally deter others from tragic cost savings measures."  

“This trend could benefit PM Trudeau. Carving out resources for prosecuting companies could recapture points lost with the younger anti-establishment demographic due to his flipflop of the Enbridge pipeline. Prosecuting charges involve detailed comparison of safety norms of similar companies and a determination of who the decision-maker is. Special departments in the Crown Attorney’s office will need to be created as well as additional judicial and court resources to accommodate the lengthy trials,” writes Dale.

The prosecution gap between the U.S. and Canada appears to be eroding, writes Dale, and the upcoming trial will serve as a precedent for the Crown to gauge reasonable prospect of conviction.

“From a deterrent perspective, expanded prosecution of companies in Canada would pave the way for companies to be charged more frequently with s. 22.2 of the Criminal Code for fraud,” she says.

To Read More Laurelly Dale Posts Click Here
Lawyer Directory
BridgePoint Financial Services Inc.Toronto Lawyers AssociationMKD InternationalFeldstein Family LawLexop Steve Rastin - 300x125Benson Percival Brown - Flat Box Ad Unit - 300x125Leanne Townsend