Act on criminal liability of companies to be passed by the Polish parliament – comments from a litigation lawyer

Businesses in Poland may soon be held liable for criminal offences committed by its representatives. The new law is likely to be passed in March. The proposed solutions will have a serious impact. Here are some comments from a litigation lawyer:
 
Firstly, the new law is going to give rise to criminal liability for companies - not only as a result of their own directors’ and employees’ actions, but also the actions of others with whom they are associated. The main criterion will be whether a company gains any profit or benefit as a result of an unlawful action. It will cover the obvious cases such as a criminal liability for a garbage dump or a chemical leakage to the environment but also for things such as tax evasion, fraud or any type of corrupt practices including bribes and kick-back schemes.
 
Secondly, companies may be held liable for criminal offences even if a perpetrator was not found guilty as charged. It will be sufficient for the prosecutor to prove that a person performing a particular action for the company committed a criminal offence which gave or could have given a benefit to the company. In the current system, the pre-requisite for the criminal liability of companies is proving in the court of law that the perpetrator is guilty of a criminal offence. In the new system, criminal proceedings against a company may run in parallel with the proceedings against a perpetrator. The process may be swift and ruthless in these circumstances.
 
Thirdly, companies may be held liable for criminal offences committed in the past.
 
Fourthly. the fines to be imposed will be much higher than today. The courts will be able to impose a fine ranging from PLN 30,000 to even PLN 30 million. In special cases, where the company’s activity threatens the security of economic transactions, the court will also be able to order the dissolution of the company. The fines will not be an end of problem; other sanctions can be imposed too, if the need arises (such as being disqualified from public contracts or interim ban on certain business operations).
 
The proper control over the company’s activities and its representatives will be currently a must. Compliance has never been more important than today. Each company should adopt a compliance policy and strictly stick to its terms.
 
If the company wants to fulfil its regulatory obligations and reduce the risk of criminal liability, it has to introduce the compliance policy and adopt some specific procedures. This is all the more important as the failure to comply with the law may adversely affect the company’s financial situation, as well as its image and reputation.
 
Each company should prepare itself and its employees for the new rules. The suggested actions are as follows:

1. to conduct internal audit to identify and assess potential risks and compliance issues taking into account the company’s areas of activity and possibility of criminal offences,

2. to develop the rules of conduct and guidelines for the company’s management and employees,

3. to appoint a compliance officer responsible for adoption of developed compliance policies and actions to be undertaken in case of potential illegal situations,

4. to carry out special trainings for the employees in order to keep and observe the company’s rules of conduct and adhere to the implemented standards.

If the company takes no steps to regulate this area and mitigate relevant risks, it will be extremely difficult to avoid criminal liability if the proceedings are started.
 
Woźniak Legal’s detailed guidance on how the new provisions work and how businesses can best mitigate relevant risks is being prepared. As soon as the new law is passed the guidance will be published.