The penalty provisions in some Thai laws include a presumption that directors and managers of an entity found to be in violation of such laws were involved in the violation and should thus be held personally liable. The burden of proof is on the directors and managers to rebut this presumption by proving that they were not involved. The Direct Sale and Direct Marketing Act (DSDM Act) includes such a provision in Clause 54 as follows:
In the event that a legal entity violates this Act, the managing director, manager or any persons responsible for the operations of the legal entity shall also be liable for the penalties the law prescribes for that offence unless such persons can prove that he or she was not involved in the commission of the crime of the legal entity.
On 28 March 2012, the Constitutional Court ruled (Ruling No.12/2555) that Clause 54 of the DSDM Act is invalid, as the presumption of guilt of the directors and managers conflicts with Section 39 para 2 of the Thai Constitution, which states as follows:
In criminal cases, it shall be assumed that the accused or defendant is not guilty.
In other words, the Constitutional Court held that the Thai Constitution provides a presumption of innocence with respect to the guilt of directors and managers of an entity in violation of the DSDM Act, such that the prosecuting authorities have the burden of proving that such directors and managers were involved in the violation in order for liabilty to apply to them.
Although the ruling is limited to Section 54 of the DSDM Act, it has implications for other laws that include a presumption of guilt (and thus liability) for directors and managers of entities in violation of such law. By applying the Constitutional Court’s analysis under the DSDM Act to such other laws, there should instead be a presumption of innocence for directors and managers of entities in violation of a particular law, with the burden of proof to rebut such presumption on the prosecuting authorities to establish that a particular director or manager was in fact involved in the violation at issue.
The ruling is final and binding upon the parliament, the cabinet, the courts and other agencies in Thailand (Section 216 para 5 of the Thai Constitution). A copy of the Constitutional Court’s ruling can be found here.