The Life Sciences & Healthcare industry is not free of criminal activity that may give rise to the companies’ liability for criminal offences. However, the corporate criminal liability in Poland is not effectively enforced now. The government presented its proposal to change that in the new draft law amending the Corporate Criminal Liability Act (the “draft”).
1. Entities covered by the draft
The draft proposes that the amended rules are applied only to large entities that:
- have over 500 employees,
- achieve at least EUR 100 million of net annual turnover.
2. Removal of the requirement of prior conviction of the offender
Currently, the corporate entity cannot be held criminally liable, if the offender was not convicted by a legal and binding judgment. The draft proposes to remove this requirement which will constitute considerable facilitation to conduct criminal proceedings against corporate entities.
It would also mean that the corporate entity might be held liable even in case the offender is deceased or undetected, as well as when the criminal proceedings could not be initiated against them, e.g. because of the expiry of statute of limitation.
3. The crimes covered by the corporate criminal liability
The corporate criminal liability is to result in particular from a crime committed by the entity’s body. They are to be also liable for crimes committed by authorised persons and employees listed in the draft.
The liability for the crimes committed by these persons is to be possible as long as the crime brings or might bring a benefit, even if non-material, to the entity and there is:
- a lack of due diligence in the selection or supervision of the person concerned; or
- inadequacies in the organisation of the entity which facilitated or enabled committing the crime.
Importantly, the draft removes the catalogue of crimes for which entities could be criminally liable. The aim of that is to introduce corporate criminal liability for all crimes and fiscal crimes. In practice, a life sciences company could most likely be investigated in connection with corruption and bribery as well as bid rigging.
4. Higher financial penalties
The draft increases the maximum financial penalty from PLN 5 million (approx. EUR 1,1 million) to PLN 30 million (approx. EUR 6,3 million) and makes the maximum amount of the financial penalty independent from the entity's revenue.
5. Voluntary submission to penalty
The draft introduces the possibility for corporate entities to voluntarily submit to a penalty. In order to do so, specific conditions need to be fulfilled, but the entity is provided with incentives to do so.
6. Final remarks
Currently not often in action, the corporate criminal liability in Poland has already been subject to unsuccessful attempts to amend its rules several times. We will see what the future brings for the draft that proposes many important changes in this respect.
By Anna Wiktorow-Bojska, Associate, NGL Legal