- Criminal liability of the corporate entities for defamation
Criminal liability of the corporate entities (legal entities) is governed in the Czech Republic by the Act no. 418/2011 Coll., on Corporate Criminal Liability. The government prepared already two years ago an amendment that was supposed to change the principle that the corporate entity may be sanctioned only for criminal offences expressively mentioned in the Article 7 of the Act. The exhaustive list of criminal offences committed by legal entities did not contain criminal defamation. The governmental proposal changed the Article 7 to be an exclusive list of criminal offences of the crimes that are excluded from the corporate liability. In the governmental proposal the criminal defamation (art. 184 of the Criminal Code) was listed as the crime that is not covered by the corporate liability.
During the process of legal enactment an MP’s proposal was produced. The MP’s proposal made a suggestion that the criminal defamation should not be excluded from the corporate liability. According to the proposal if there is a criminal liability of natural person why there is a difference for legal entities. Among other reasons there was suggested that if the crime is defined:
„ a person who communicates false information which can seriously endanger another person’s respect among his fellow citizens, in particular damaging his position in employment, and relations with his family, or causing him some other serious detriment, shall be sentenced to a term of imprisonment of up to one year. An offender shall be punished by a term of imprisonment of up to two years or prohibition of a specific activity, if he commits this act by using the press, film, radio or TV broadcasting, public computer network or some other similarly effective method“
so that the stricter penalty is if the libel is made via press, film, radio or TV broadcasting, public computer network than these methods are used mainly by publishers and broadcasters, therefore should be liable.
Despite warnings of experts and explanation of former ministers of justice the government let the act to be enacted by Parliament and Senate in the wording of MP’s proposal. The Act has been introduced on 13. June 2016.
So what can commercial corporate entities, mainly publishing houses, broadcasters, private agencies expect from the Act on Corporate Criminal Liability? The main issues are the penalties. In Part 3 of the Act the types of punishments and protective measures (§ 15f) are listed:
- Liquidation of the corporate entity
- Forfeiture of property
- Financial fine daily tax 1.000-2Mil CZK
- Forfeiture of object or other tangible value
- Prohibition of activities 1-20 years
- Prohibition participation in tenders, in concession proceedings or in competitive bid
- Prohibition of receiving of subsidies and subventions
- Publication of judgment on its expenses, identification
One has to be aware of the Subject of the Act, applicability and jurisdiction and who is excluded. Also very important is the question of Who is liable for the company and succession. The Act also includes specific procedural rules.
The aim of the MP’s proposal was very direct as the explanation for the change suggested that there has to be another tool to restrict the press (if it oversteps the legal boundaries). The question is whether this is appropriate tool. The criminal law has to serve its purpose as ultimo racio and this clear aim is a sign that has to be taken seriously as an attempt to restrict the freedom of expression as the consequences are very severe and might be misused for different reasons. The Czech legal order provides effective civil law rules and the justice is open for everybody, it is a question why this Act (provision) was enacted.
- The governmental proposal to amend the Criminal Code in respect of the crime – Defamation of a Nation, Race or Conviction to add „class“ will be subject of the next post.
For more details in respect of criminal libel in the Czech Republic see previous posts.