What is corporate criminal due diligence in Canada?

What is corporate criminal due diligence in Canada?

Due diligence is a structured process designed to assess and mitigate risks within a business.

Corporate due diligence requires corporations to take proactive steps to identify, prevent, mitigate, and address criminal actions of their employees.

An organization may face a criminal offence related to negligence under section 22.1 of the Criminal Code. Section 22.1 states that an organization is party to the offence, in respect to an offence that requires the prosecution to prove negligence, if:

1. acting within the scope of their authority
   1. one of its representatives is a party to the offence, or
   2. two or more of its representatives engage in conduct, whether by act or omission, such that, if it had been the conduct of only one representative, that representative would have been a party to the offence; and
2. the senior officer who is responsible for the aspect of the organization's activities that is relevant to the offence departs - or the senior officers, collectively, depart - markedly from the standard of care that, in the circumstances, could reasonably be expected to prevent a representative of the organization from being a party to the offence.

Section 22.2 of the Criminal Code addresses non-negligence criminal liability for organizations. An organization may be convicted of an offence if one of its senior officers, with at least partial intent to benefit the organization:

1. Acting within the scope of their authority, is a party to the offence;
2. Having the mental state required to be a party to the offence and acting within the scope of their authority, directs the work of other representatives of the organization so that they do the act or make the omission specified in the offence; or
3. Knowing that a representative of the organization is or is about to be a party to the offence, does not take all reasonable measures to stop them from being a party to the offence.

Failing to implement policies that mitigate criminal liability can have severe consequences for a business.