The M'Naghten Rule is a legal standard used to determine whether a defendant can be held criminally responsible for their actions due to insanity. Under this rule, a person may be excused from liability if, at the time of the offense, they were unable to understand the nature of their actions or did not know that their actions were wrong due to a severe mental disorder. This rule emphasizes cognitive impairment and moral understanding, shaping how insanity defenses are argued in court.