Frank Luciano, Civil Demand Associates on...

           A Reasonable Rant on Civil Recovery Laws


The subject of Civil Recovery as it pertains to asset protection isn’t a new concept in the retail industry as many states have possessed recovery statutes for the last 30 years. The retail industry as a whole has tested the waters with these recovery statutes and, in most cases, has pushed for changes which would assist the retailer in avoiding various pitfalls that would occur when one apprehends a shoplifter and attempts to recover compensation for losses incurred.

If you were to pool a group of loss prevention practitioners, asking them to address deficiencies in the recovery laws, the responses would most likely revolve around two major areas of concern: the lack of parental liability for juvenile offenders and the inability to pursue civil recovery of prosecuted offenders.

One cannot discuss the issue of parental liability without addressing its moral and societal implications. Common law dictates that every minor is responsible for their own torts (civil wrongs with compensatory ramifications). Without legislation which would place legal liability on the responsible guardian for their child’s action, the law infers that not only must an action be brought upon the minor, but any due compensation awarded will also lie with the minor.

While the majority of civil recovery statutes allow for parental liability in the context of civil recovery, there are still 10 states that omit such liability. The omission of parental responsibility for their minor offender’s actions means that any civil action must be directed to the minor. Furthermore, any compensatory damages must be paid by that minor. From a public policy standpoint, any practices in this vein would be deemed unacceptable and might even contribute to decreased patronage of a retailer’s brand.

The majority of states which have instituted a clearly defined relationship in the face of such a challenge have done so for two reasons. From a public policy standpoint, it seems only fitting to shift fiscal responsibility to the parent or legal guardian. Holding parents financially responsible for their children’s actions can result in motivating the needed parental oversight that can have a positive effect on minor recidivism. Coupled with this principle is the compensatory nature of the civil law venue to make the victim whole. The criminal system remains rehabilitative in nature in that it lacks the full compensatory function that the civil system can provide.

Conversely, it is this same systemic separation which is seemingly ignored when the statute outlines the mutual exclusivity of civil recovery versus criminal prosecution. Most of our contemporaries in the civil recovery industry refer to a handful of states as “either-or” states. These are typically states whose legislation outlines a strict prohibition for making a civil demand if any criminal matter has been initiated. As with parental liability, the majority of civil recovery laws allow a retailer to pursue a civil demand while criminal prosecution is taking place. There are, however, 5 states which either expressly prohibits a retailer from pursuing the civil recovery of prosecuted offenders, or there is a de facto prohibition from civil recovery due to impediments placed by the civil recovery statute in trying to pursue a civil demand as it pertains to a prosecuted offender.

Retailers are essentially forced to choose between making a civil demand and referring a case for prosecution. Although such a stipulation may have been included as a means of elevating the potential burden of a case being filed in both the civil and criminal forums, the legislature has inadvertently placed a very unusual responsibility in the hands of the punitive side of the legal system.

Typically, the criminal system will provide a remedy for the victim to recover any actual damages incurred while the civil system will allow for that retailer to claim security and apprehension losses. This is the remedy upon which most states have relied and have thus maintained the traditional compensatory role of the civil system concurrent with the punitive role of the criminal system. The most costly cases in terms of personnel and investigation are also the same cases that retailers would like to see prosecuted.

Those recovery statutes which fall into the “either-or” category have essentially created a situation in which a retailer who chooses to arrest shoplifters and dishonest associates will have no recourse for reimbursement of their loss prevention expenditures (the spirit of civil demand).

Although retail theft cannot be completely stopped, our efforts to assuage it can allow retailers to extend the best pricing possible to their patrons. Issues, such as parental liability and “either-or statutes”, go hand-in-hand with reduced recidivism and economic prosperity. Shifting the responsibility to that of the parents (the very consumers who patronize those retailers) helps to greatly reduce recidivism. Reduced recidivism infers a decrease in overall security and apprehension costs and thus a reduced price to the consumer for sought-after goods. This principle, coupled with a simply-conveyed, globally-applied civil demand amount, will directly affect the cultivation of the same economic prosperity that the state professes to encourage. 

(Article co-authored by Neal C. Tenen, attorney at law)