What Are the Criminal Liabilities of Business Leaders?

The criminal liability of business leaders is an increasingly important topic, particularly in sectors such as construction, where incidents can have severe consequences. This responsibility involves not only individuals but can also pertain to the organizations themselves. It is crucial for business leaders to understand the legal risks they face.

What types of incidents can trigger a leader's criminal liability? How do Canadian laws, such as the Criminal Code and Bill C-21, frame this responsibility? What measures can be implemented to minimize these legal risks?

This article explores the legal obligations of business leaders and compliance strategies to prevent criminal offences.

Criminal Liability: Definition and Key Concepts

How Is Criminal Liability Defined?

According to the Criminal Code, criminal liability arises when the act or omission of an individual or organization constitutes an offence. Within a business context, leaders may be held criminally liable for the actions of their employees, particularly if they have not implemented adequate measures to prevent accidents or violations of applicable laws.

The Concept of Criminal Liability in Quebec Law

In Quebec law, criminal liability is based on the idea that a person or organization can be held accountable for an illegal act, even if they did not directly commit the offence. The Act Respecting Occupational Health and Safety (OHSA) stipulates that employers must take all necessary measures to protect their employees from hazards; otherwise, they may be held responsible in the event of an accident. Additionally, Quebec jurisprudence, illustrated by cases like C.F.G. Construction Inc. and Ressources Metanor Inc., has established important precedents in matters of criminal negligence.

The Concept of Criminal Liability in Ontario and Canadian Law

Likewise, under both Ontario and broader Canadian law, criminal liability is based on the principle that individuals or organizations can be held responsible for criminal acts, even if they did not directly commit the offence. The Criminal Code of Canada outlines various offences, and liability may extend to business leaders, particularly in cases of corporate wrongdoing. A key case illustrating this principle is R. v. Metron Construction Corporation, where the company was held liable for a workplace accident due to its failure to ensure safety regulations were followed. This case established that corporate entities could face severe penalties, including fines and imprisonment for their officers, if they fail to adhere to occupational health and safety standards.

What Is Vicarious Criminal Liability?

Under the Act to Amend the Criminal Code (criminal liability of organizations), businesses can be held criminally liable for the actions of their leaders and employees. A business can be found guilty of offences committed in the course of its activities if it has not taken sufficient measures to prevent these offences. This includes negligence in maintaining equipment, as was the case in Albert Paradis, where the company was fined $300,000 for failing to properly maintain the deceased employee's truck.

Difference Between Civil Liability and Criminal Liability

It is essential to distinguish civil liability from criminal liability. While civil liability focuses on compensating for damages, criminal liability involves a sanction for a wrongful act. In matters of criminal liability, proof of serious fault or negligence is required, as seen in the aforementioned cases. For example, criminal liability may be engaged in cases of severe violations of workplace safety standards, as occurred in R v. Transpavé, where the company was fined $100,000.

Who Can Be Criminally Liable in a Construction Business?

Business Leaders and Executives

Business leaders and executives are often the primary individuals held responsible for criminal offences committed within their organization. Under the provisions of the Canadian Criminal Code and provincial laws, an executive may be held criminally liable for offences committed by their business, especially in high-risk sectors like construction. The case of S. Fournier Excavation Inc. is a striking example, where the executive was convicted of manslaughter after the death of an employee on an inadequately secured construction site.

Legal Entities

In addition to individuals, legal entities, meaning the businesses themselves, can also be held accountable for offences committed in the course of their activities. According to the Criminal Code, a business can be found guilty if the actions of its leaders or employees violate criminal laws, even in the absence of criminal intent.

How Can Criminal Liability Be Implicated in Construction?

Common Offences

In the construction sector, several serious offences can lead to criminal liability. Violations of safety standards, fraud, and environmental offences are often the basis for these prosecutions. A relevant example is accidents resulting from a lack of precautions.

Precedent Cases in Quebec

Several judicial decisions in Quebec illustrate how businesses' criminal liability can be engaged in cases of gross negligence.

For instance, in 2012, C.F.G. Construction Inc. was found guilty of criminal negligence following the death of a worker due to inadequate maintenance of a truck. The company was fined $300,000 and placed on probation for three years under strict conditions. In another notable case, S. Fournier Excavation Inc.'s president was sentenced to 18 months in prison for criminal negligence and manslaughter after an employee was buried in an inadequately secured trench during construction work.

These examples demonstrate that negligence in safety practices on construction sites can lead to severe penalties for both companies and their leaders.

Precedent Cases in Canada

Several legal cases in Canada illustrate how companies can face criminal liability for safety failures.

For instance, in October 2012, Jeff Caron, a pipelayer for J. Cote & Son Excavating, was killed when a gravity retaining wall collapsed into a trench where he was working to replace a storm and sewer line in Burnaby, BC. Another worker involved in the excavation suffered severe injuries. In August 2023, J. Cote & Son Excavating Ltd. and former foreman David Green were charged with criminal negligence causing death and injury. Green also faces an additional charge of manslaughter.

In Ontario, on June 24, 2021, Corey Phillips died after a crane tipped over at a construction site, pinning him under steel beams. In December 2022, Donald Paul Balkwell, the crane operator, was charged with criminal negligence causing death. Investigations revealed that Balkwell was not licensed to operate the crane, and the equipment had been altered to exceed its safe limits. North Steel, responsible for supplying and installing the structural steel at the site, was also charged with criminal negligence causing death due to its involvement in the incident.

These incidents underscore the significant legal risks businesses and individuals face when safety protocols are ignored.

How Is Criminal Liability Sanctioned?

In Quebec, several cases have shown how criminal liability can be engaged in situations of negligence. In the C.F.G. Construction case, the company was fined, while in S. Fournier Excavation Inc., the executive received a prison sentence for manslaughter and criminal negligence. These cases illustrate the serious consequences for businesses and their leaders in the event of significant failures to comply with safety standards.

How to Reduce Risks That Engage Your Criminal Liability?

Regulatory Monitoring

To limit the risks of criminal liability, it is essential for businesses and their leaders to stay informed about the latest regulations regarding workplace safety and risk prevention. Establishing a regulatory monitoring system ensures that companies comply with existing laws, thereby reducing the risk of criminal offences.

Establishing Procedures

Implementing rigorous internal procedures is another key measure to minimize risks. This includes establishing safety policies, emergency protocols, and regular training for employees. These measures not only help prevent accidents but also demonstrate that the business takes its responsibilities seriously, which can be crucial in the event of criminal proceedings.

Training and Awareness

Investing in Training

It is crucial to invest in the training of leaders and employees to enhance awareness of criminal and civil liability within businesses. By incorporating educational programs on criminal law and legal obligations, companies can better understand the conditions for employers' criminal liability. This approach fosters a culture of compliance where risks are better anticipated and offences avoided.

Encouraging Accountability and Responsibility at All Levels

In addition to training, it is essential to promote accountability at all levels, from management to front-line employees. Adopting clear internal policies and establishing safety procedures engage the criminal liability of both leaders and employees. This proactive approach reduces the likelihood of leaders or legal entities being involved in situations of criminal negligence or other criminal offences.

Criminal Liability: A Crucial Issue for Businesses and Corporations

In summary, the criminal liability of business leaders is a crucial issue, particularly in high-risk sectors like construction. Leaders must be aware of the risks they face and implement measures to prevent offences. Through effective regulatory monitoring, the establishment of rigorous internal procedures, and ongoing employee training, it is possible to limit these risks and protect both the business and its leaders from potential criminal prosecutions.

FAQ

In Canada, what is criminal negligence?

Criminal negligence occurs when someone, either by action or by failing to fulfill a duty, demonstrates a wanton or reckless disregard for the lives or safety of others.

What does it mean to be liable on conviction?

To be "liable on conviction" means that an individual or entity is legally responsible for facing penalties, such as fines or imprisonment, if found guilty of a crime in a court of law. The phrase refers to the potential consequences or punishments that follow after a conviction for a criminal offence.

What is strict liability in Canada?

Strict liability offences only need the prosecution to show that the defendant did something illegal, without needing to prove that the defendant intended to do it.