Corporate Crimes essay

Topic: 32683869 Corporate Crimes

Specifications: 2 Pages, 5 sources, APA Style

Description: Preferred language style: English (U.S.).  Please write a 3-page essay.  Distinguishing between corporate criminal liabilities versus vicarious liability resulting from negligence of an health care organization’s employee, and discuss the legal elements of criminal versus negligent liability. And what is apparent agency and what impact does the status of the agent/employee versus independent contractor has on the analysis?

Before the year 1909, the Courts in the US began to hold the hospital responsible for the actions of its physicians only in civil cases due to the vicarious liability clause (arising from the doctrine respondeat superior).  However, following the US Supreme Court case – NY Cent & Hudson River RR V. US [212 US 481 (1909)], corporate liability in negligence cases were extended from a civil dimension to a criminal liability.  The Organization could be held criminally liable for acts performed or omitted.  However, the individual should act in the benefit of the organization, should be employed, and the individual’s have an intent not to destroy the good name of the organization.  Under criminal liability two criteria need to be fulfilled, namely, the mens rea (criminal intent) and the actus rea (guilty act).  The actus rea from the employee would usually be arising from the assumed responsibilities.  There also seems to be a constitutional factor between the relationship of the employer and the employee.  However, there were several problems that arouse due to holding the individual under criminal liability.  The judges had a lot of freedom to sentence individuals in cases of crimes.  However, holding a corporation liable criminally would result in a lot of problems as the several processes and uncertainties existed in a corporation.  At the end of the day, the decisions made, were not that of a single individual.  Besides, the employees on their own will (and sometimes against the will of the corporation), would be performing actions that would not be in the good of the corporation.  In such cases, the corporation could not be held responsible for the actions.  In 1987, certain guidelines were formulated by the US law enforcing agencies, and in 1991, special laws were formulated to sentence organizations.  These laws were specially addressed to prevent employees from performing criminal acts and to report the occurrence of such acts.  Several laws can hold the employer or the organization responsible for the acts of its employees or agents including the common law, model penal code, internal corporate laws, etc.

            The organization could also be punished criminally for not having policies and regulations that could prevent criminal action of its employees.  Considering the application of vicarious civil liability in cases of corporate in the past, it has now become essential not to exclude them of vicarious criminal liability.  The government to demonstrate the importance of having criminal liability for corporates has frequently utilized the Enron case.  Another way to view the case of criminal liability of a corporation would e to consider the hospital or the corporate as an individual itself, consigning of several interrelated systems and performing many functions in close coordination with one another.

            Besides, a hospital or a healthcare organization could be held vicariously liable for the actions of its employees.  The concept of vicarious liability again arises from the doctrine of respondeat superior; which holds the organization responsible for the actions of its agents/employees.  In such cases, even if the hospital has not acted negligently, it could be held responsible or vicariously liable for the action of its employees.  The employees (physicians, specialists and nurses) would not be in a situation to compensate the patients for any negligent act of theirs.  The hospital or the healthcare organization is always in a better situation (Pacific West Law Group LLP, 2004).

            Frequently, in a vicarious liability situation, the extent to which the hospital would be controlling the manner and the means by which the patients is amended by the physician is determined.  An independent contractor may appear to the patient as being a part and parcel of the hospital staff.  In such a case, the patient would be considering the good name of the hospital and not the name of the physician.  The patient has to be sufficiently told before hand of the position the operating doctor has in that particular hospital.  However, a hospital cannot be held for certain misconducts of the physician (especially sexual abuse of the patients).  In cases of sexual abuse, the physician would be acting against the objectives of the hospital, and the hospital would not be able to control the action of the physicians.  In such cases the hospital cannot be held vicariously liable for the actions of the physician (Pacific West Law Group LLP, 2004).  Vicarious liability usually arises when a close relationship exists between two or more people.

            In an Illinois Supreme Court case, it can be seen to what extent the hospital could be held liable for the actions of the its employees including agents and independent contractors.  In this case, the patient came to the hospital in need of a knee surgery.  The patient was a retired doctor, and was attended by an anesthesiologist who was an independent contractor for the hospital.  However, due to the negligent act of the anesthesiologist, the patient suffered irreversible back injury and sued both the hospital and the anesthesiologist.  The hospital said that it was not negligent as the patient who was a doctor was aware that the anesthesiologist was an independent agent.  However, the court said that the hospital was liable in this case, as it controlled all the activities responsible for the medical care of the patient.  Even considering the doctrine of apparent agency, the hospital was liable.  Besides, the patient had not signed any document that warned him that the anesthesiologist was an independent contractor (Lawyers US, 2006).  Hence, in this case, based on the theory of apparent agency, the court held the hospital vicariously liable for the acts of the anesthesiologist who was an independent contractor.  The hospital had to pay a compensation of about $ 12. 5 million.  Even people, who were not employed by the hospital and were independent contractors, could not be held negligent, as the hospital was vicariously liable under the doctrine of apparent agency.  The patient would depend and rely on the hospital to provide its services.  During the procedure, the doctor wore a uniform that contained a badge of the hospital (Lawyers US, 2006).

            The doctrine of apparent agency would hold the hospital or the organization responsible in spite of the fact whether they are the employees or independent consultants/contractors.  A hospital may not be held vicariously liable for the actions if it is able to sufficiently inform the patient before hand, that the physician/surgeon treating them is an independent contractor (contrary notice).  This was formulated following the Loretta Henry V. Flagstaff medical Center case (2006), in which a patient was negligently treated during her pregnancy for a gall bladder [problem.  Due to the negligent act of the surgeon, the patient and her developing baby suffered damages.  Using the theory of apparent agency, the patient held the hospital responsible.  The hospital failed to inform the patient sufficiently that the doctor who was operating was an independent contractor.  A patient would be coming to the hospital because of its reputation and good name it possesses.  In such cases, the hospital has to inform the patient about an independent contractor treating them.


Carrasco, C. E. & Dupee, M. K. (1999), Corporate criminal liability, The American Criminal Law Review; Summer, 36(3), 445-473.

Lawyer USA. (2006, July 23). Illinois Supreme Court rules hospital vicariously liable based on theory of apparent authority. St. Louis Daily Record & St. Louis Countian.

Pacific West Law Group. (2004). Health Care and the Law of Vicarious Liability.

Tammelleo, A. D. (2006, May 1). Court rejects application of `apparent. Are hospitals vicariously liable for all physicians who treat patients at the hospitals?

Weissmann, A., & Newman, D. (2007). Rethinking Criminal Corporate Liability