Panel on Corporate Criminal Liability in the European Union at the European Law Institute’s annual meeting at the University of Vienna. (L-R) Andreas Pollak, Justice Donal Gerard O’Donnell, Pietro Sirena, Fabio Nicolicchia
Franz Pfluegl – European Law Institue
In September, the European Law Institute held its annual meeting in Vienna, Austria. The meeting brings together judges, attorneys, professors, and policy experts from throughout Europe to discuss issues facing the European Union. This year, the meetings focused heavily on sustainability and its impact on the legal field. One panel addressed corporate criminal liability, presenting draft model rules to be adopted by European jurisdictions.
Corporate criminal liability is an increasingly important topic within sustainability and climate change debates. The ability to hold corporations, and their leadership, accountable for the actions that are harmful to the climate is an underlying theme in sustainability regulations.
Within the European Union, a pair of directives worked to create the legal liability. The Corporate Sustainability Reporting Directive created disclosure requirements for companies relating to greenhouse gas emissions and human rights issues. The Corporate Sustainability Due Diligence Directive created legal liability, not only for the actions of the parent company, but for companies along the value chain. While those directives are currently being reformed by the European Commission, the enforcement mechanism will be found in corporate criminal liability.
These issues were the subject of a panel at the European Law Institute’s annual meeting. ELI is an independent legal think tank funded, in part, by the European Union to draft model laws and provide guidance on emerging topics, focusing on European legal development in a global context. ELI was founded in 2011 and is based at the University of Vienna. ELI Fellows gather in the fall for annual meetings that alternate between Vienna and other host countries in the EU.
The panel, Corporate Criminal Liability in the European Union , was moderated by Pierto Sirena, ELI Treasurer and Dean at Bocconi University. The panelists were Fabio Nicolicchia, researcher at the University of Ferrara; Donal Gerard O’Donnell, Chief Justice of Ireland; Andreas Pollak, attorney and board member of the European Criminal Bar Association; and Ingrid Breit, Deputy Head of Unit for Criminal Law, European Commission.
Nicolicchia introduced the project and the draft model rules. The project started in March 2023, with Nicolicchia and Celina Nowak at the head. It was formed to address inconsistencies in the law throughout the EU. Each member state takes a different approach to enforcement, most notably in the liability of individuals for the actions of corporations. Nicolichhia argues for harmonisation, a concept in EU law that seeks to make all member states adopt identical legislation.
This is best accomplished through directives from the European Commission, as with the above mentioned CSRD and CSDDD. For now, ELI is hoping to provide a model law that can be used as guidance by national legislators looking to harmonise. The model law is expected to be released in early 2026.
Panelists look on as Donal Gerard O’Donnell, the Chief Justice of Ireland, speaks on Corporate Criminal Liability in the European Union during the European Law Institutes (ELI) annual meeting at the University of Vienna.
Franz Pfluegl – European Law Institue
O’Donnell offered a judicial perspective. He also focused on the issue of harmonisation, and the complexities of aligning through multiple jurisdictions. Interestingly, he also noted a need to also align with the law of the United Kingdom, despite their exit from the EU, as many companies are engaged in transnational operations between the UK and EU member states.
O’Donnell also addressed the issue of criminal liability for companies and the alignment with criminal liability of individuals. He noted that enforcement of the individual is key to enforcement of the company’s actions. He cited a recent case in another jurisdiction involving pollution. The issue in that case was that the company was no longer in existence, therefore the company could no longer be prosecuted. They then sought enforcement through a corporate director. In jurisdictions without that link, a company can dissolve and avoid criminal penalties.
Andreas Pollak
Franz Pfluegl – European Law Institue
When asked about environmental crimes and shell companies, he made a comparison to financial crimes. He cautioned against over regulating, which may discourage the use of subsidiaries in legitimate circumstances, but encouraged balance.
Pollak offered a practitioner’s perspective. He noted that the purpose of corporate criminal law is to alter the behaviors of legitimate corporations. To influence their behavior.
In looking at the proposed legislation, he questioned the application in succession, when a company merges with another company or is obtained by a new company. Some enforcement mechanism must be in place, but in such a manner that it does not discourage legitimate business actions.
The need for harmonisation of corporate criminal law in the European Union will be instrumental in the sustainability and climate change debate. Climate activists are already working to hold corporate directors accountable for corporate actions through existing criminal laws. Whether the EU continues the piecemeal approach through due diligence directives, leaving enforcement and liability to the member states, or harmonises at the EU level is uncertain. Watch for the European Law Institute to release their findings in March 2026.