In its recent Sentence 154/2016, dated 29 February, the Spanish Supreme Court ruled, for the first time, that companies can incur criminal liability.  The Supreme Court confirmed the sentences that were issued by the National Court in which three companies were convicted for their involvement in crimes against public health.

The Supreme Court also explained the requirements that must be met to rule that corporate liability exists, according to Article 31 bis of the Spanish Criminal Code:

  • Firstly, to rule that corporate criminal liability exists, there must be sufficient proof and verification that a crime was committed by an individual that forms part of the company concerned.
  • Secondly, the company must have breached its duty to establish a set of measures to monitor and supervise its people in order to prevent such crimes from being committed. In this regard, the Sentence established: “to assess a company’s conduct for the purpose of ascertaining its criminal liability, an analysis must be made to decide whether or not the crime committed by the individual within the company was made possible or facilitated by the absence of a corporate culture that encourages respect for the law; one that is a source of inspiration for the actions of its organizational structure and which is independent from the culture in each of the companies that form part of the organization, such a culture would be manifested in some sort of specific means that are aimed at supervising and monitoring the conduct of the companies’ executives and their subordinates so that they do not commit such crimes”.

In its Sentence, the Supreme Court also warned about the procedural conflict of interest that may arise between the individuals accused of the crime, and the companies that are represented by those same individuals. In the judges’ opinion, this is something that could give rise to a violation of the company’s right to defense. Therefore, the Supreme Court asks that judges and courts try to avoid such risk and protect companies’ right to defense. The Sentence also suggested that legislators remedy this situation by amending the law and regulations accordingly.