Reforming the Respondeat Superior Doctrine

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2 Responses

  1. Jon May says:

    Maybe they should tackle the responsible corporate offficer doctrine first.

  2. Nick says:

    Great post – nice to see the FCPA reform debate put in proper US context. Now what about a bit of comparative international law?

    Corporate liability in the UK took a ‘great leap forward’ with Section 7 of the Bribery Act, partly encouraged by the example of the FCPA but also by the OECD’s good practice guide on criminalisation of foreign bribery. This OECD guide is ‘Annex 1’, the sister standard to ‘Annex 2’ or the 2009 good practice guide on internal controls, ethics and compliance. It goes as follows:

    Member countries‟ systems for the liability of legal persons for the bribery of foreign public officials in international business transactions should not restrict the liability to cases where the natural person or persons who perpetrated the offence are prosecuted or convicted.
    Member countries‟ systems for the liability of legal persons for the bribery of foreign public officials in international business transactions should take one of the following approaches:
    a. the level of authority of the person whose conduct triggers the liability of the legal person is flexible and reflects the wide variety of decision-making systems in legal persons; or
    b. the approach is functionally equivalent to the foregoing even though it is only triggered by acts of persons with the highest level managerial authority, because the following cases are covered:
     – A person with the highest level managerial authority offers, promises or gives a bribe to a foreign public official;
     – A person with the highest level managerial authority directs or authorises a lower level person to offer, promise or give a bribe to a foreign public official; and
    – A person with the highest level managerial authority fails to prevent a lower level person from bribing a foreign public official, including through a failure to supervise him or her or through a failure to implement adequate internal controls, ethics and compliance programmes or measures.

    Which boils down to saying that respondeat superior goes far beyond international requirements or even good practice, with headroom to accomodate a suitable FCPA ‘compliance defence’.