Since the introduction of the institution of legal entities’ exemption from criminal liability in 2016, there has been discussion on the distribution of the burden of proof in proving the conditions for its application in criminal proceedings. Meanwhile, the prosecution’s view has been gradually changing.
The Prosecutor General’s Office, which within the framework of its methodology of procedure for public prosecutors from 2018 upheld an option of transferring official bodies’ obligation to prove the exemption of the legal entity from criminal liability to prosecuted legal entities, has more recently changed its view in the June 2019 Report on the Public Prosecutor’s Activities and concluded that it is primarily the bodies participating in the criminal proceedings who must prove the decisive facts that testify to the exemption. This approach corresponds to the basic principles of criminal proceedings and reinforces the legal entities’ position in the procedure.
Exemption from criminal liability
The option of exculpation is regulated in Section 8 (5) of the Act on Criminal Liability of Legal Entities, according to which a legal entity is exempted from criminal liability if it makes every effort that could justly be expected of it to prevent the persons who acts on its behalf from committing criminal acts. In particular, these efforts may consist in the implementation and enforcement of a compliance program that contributes to the creation of an anti-crime corporate culture.
Even though in case of prosecution a legal entity may be motivated to demonstrate that it made every effort possible, the entity should not be forced to prove this with respect to the basic principles of criminal proceedings. Thus, the absence of conditions for exculpation presupposes that criminal liability should be proved, and despite the problematic formulation “is exempted”, according to the principles of investigation, the responsibility for investigation and elucidation, as well as the burden of proof, lies on the bodies participating in the criminal proceedings. The legal entity in turn is protected by the principle of presumption of innocence and prohibition from being forced to incriminate itself. Thus, within the meaning of the principle of “doubts in favor of the accused“, doubts about the existence of conditions for exculpation should not ipso facto lead to the detriment of the legal entity.
Problematic methodology of the Prosecutor General’s Office
The bodies participating in criminal proceedings traditionally perceive proving the existence of facts relating to the exculpation of legal entities as problematic. Yet the Prosecutor General’s Office has accommodated them in the framework of its methodology by attempting to shape the above-mentioned principles to their benefit.
Thus, the methodology, for example, stipulated that it is the legal entity who has to provide the relevant documents to substantiate the conclusion that all efforts were made to prevent the commission of a crime, and if they are not provided even at the request of the State Attorney, in the absence of facts indicating the applicability of Sec. 8 (5) of the Act this should be considered a “resolved question“. Other passages in the methodology also allow the assumption that the Prosecuting Attorney inclines towards the option of turning the burden of proof to the legal entity’s disadvantage in the sense of its responsibility for the result of proving by saying that the institution of exculpation represents the “benefit” that might do the legal entity good only if it gets involved. However, the attempt to turn exculpation into an institution that allows more stringent treatment of legal entities has been justly criticized, for
although the liability of legal entities is primarily derived from the fault of natural persons who have acted in its interest or within its activities, the fault of the legal entity itself consists precisely in the failure to exercise due diligence and to manage operational risk. This factor must be considered a part of the subjective side of a crime, and therefore the bodies participating in the criminal proceedings may not be freed from the burden of proof regarding the proving of this factor. Proving one’s innocence is a right, not an obligation, of the person against whom the criminal proceedings are conducted.
Although the methodology also stipulates that the defendant’s guilt must be proved absolutely, and that in the end, the interpretation of the Act is always in the hands of the court, from the standpoint of defense, in some cases it could be problematic to determine whether it is appropriate to actively present statements and evidence that indicate the fulfillment of conditions of exculpation, or whether their elucidation should be left completely in the hands of the bodies participating in the criminal proceedings.
The current shift in the burden of proof
The Prosecutor General’s Office responded to the criticism of the methodology by referring to its Special Report on Findings from the Application of the Institution of Exculpation already within the framework of the Report on the Public Prosecutor’s Activities from 2019. It stated explicitly that the burden of proving that every effort has been made cannot rest on the legal entity, for this excluded the concept on which Czech procedural criminal law rests. This conclusion was accompanied by a reference to the principle of officiality and by explicit confirmation that it is primarily the bodies participating in criminal proceedings who have to prove the facts decisive for the application of Sec. 8 (5) of the Act on Criminal Liability of Legal Entities.
Although the Report then also emphasized that proving the conditions of exculpation ex officio is problematic, and the content of the above-mentioned methodology remained unchanged, the explicit refusal to shift the burden of proof away from the prosecution is definitely beneficial to legal entities from the standpoint of defense. This can be seen as a confirmation that if some doubts that the conditions of exculpation are met arise in criminal proceedings, this does not automatically prove the legal entity’s guilt, but on the contrary leads to an exemption to the principle of “doubts in favor of the accused“.
At the same time it should be emphasized that this does not result in compliance programs losing their importance, they continue to be a condition that allows the application of the institution of exculpation. Within the framework of procedural strategy, it is only necessary to assess to what extent the legal entity should be involved in proving that they have been duly implemented.
Legal entities may be expected to cooperate with the bodies participating in criminal proceedings while proving the conditions of exculpation, for which they should prepare themselves already at the stage of building their compliance structure.
By Lukas Duffek, Partner, and Tereza Majerova, Junior Lawyer, Rowan Legal