Corporate Crime - Individuals vs. Corporations

Topics: Criminal law, Law, Crime Pages: 17 (5422 words) Published: April 10, 2013
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Corporate Crime (BTF2223):
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Research Report Assignment
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Proposition: “In order to effectively punish and deter corporate crime, the law should impose criminal sanctions on individuals rather than on corporations.” -------------------------------------------------

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Table of Contents
Cover page ….……………………………………………………………………1 Table of contents…………………………………………………………………2 Preliminaries………………………………………………………………………3 Sanctions, punishment and deterrence ………… …………………………………4 Corporations and corporate crime ………………………………………………5 Imprisonment as the supreme criminal sanction ………………………………… 5-6 Procedural deficiencies in taking action against a corporation …………………. 6-7 Stifling the role of a director and business prosperity ………………………… 7-8 Determining precisely which party or parties are at fault …………………………8-9 Protecting innocent bystanders from the wrongdoing of others …………………10 The need for reform in criminal sanctions …………………………………….…11-13 Conclusion ……………….……………….……………….……………….…….14 Bibliography ……………….……………….……………….……………….… 15-18

Preliminaries
Corporate criminal liability is imposed in almost every area of corporate activity, including, consumer protection, workplace safety, environmental protection, securities regulation and taxation. For this reason it is vital that it is regulated as close to maximum efficiency as possible. Deciding whether or not criminal sanctions should be imposed on the corporation itself, the individuals or both should not merely be confined to a yes or no question. The law is far too sophisticated and subjective in nature for such a simplistic view to be taken. This research report holds the view that adopting such a narrow mindset would lead to insufficient levels of punishment and deterrence and rather a miscarriage of justice occurring for corporate crime. What essentially is being argued is that engaging legal action under personal or corporate criminal liability should not be viewed as mutually exclusive events. The decision of whether to pursue either corporation or the individual should revolve around a multitude of factors. These factors at hand need to be balanced and feature the area of the law applicable to the case, the unique facts and circumstances surrounding the case and ‘prosecution policy’. The prosecution policy is responsible for judging the likelihood of receiving a criminal conviction in addition to what is in the best interests of society as a collective unit. Furthermore, it is not necessarily just a choice of individuals, corporations or both, but also the criminal sanctions that act as an instrument to punish and deter corporate crime.

Sanctions, punishment and deterrence
Sanctions are defined as a penalty imposed for violating accepted social norms; in addition criminal sanctions are either a fine, imprisonment or both. The reasons behind the existence of sanctions are underpinned by five fundamental legal pillars known as...

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Clough, J. & Mulhern, C., The prosecution of corporations, Oxford University Press, South Melbourne, Vic., 2002.
Coffee, J.C., “’No Soul to Damn: No Body to Kick’: An Unscandalized Inquiry into the Problem of Corporate Punishment”, Michigan Law Review, Vol. 97, No. 3, 1981, pp. 386-393.
Croall, H., Understanding white collar crime, Open University, Buckingham, 2001.
Department of Treasury, “Review of Sanctions in Corporate Law”, Australian Government, 2007, http://archive.treasury.gov.au/documents/1182/PDF/Review_of_Sanctions.pdf, viewed 23 August, 2012.
Gobert, J.J. & Punch, M., Rethinking corporate crime, Butterworths, London, 2003.
Gregory, P., & Shaw, M., “Esso Fined a Record $2M”, The Age, 31 July, 2001, Business, pp. 1.
Keay, A., "Directors ' Duties to Creditors: Contractarian Concerns Relating to Efficiency and Over-protection of Creditors", Modern Law Review, Vol. 6, No. 5, 2003, pp. 686-687.
Kennedy, C., “Criminal Sentences for Corporations: Alternative Fining Mechanisms”, California Law Review, Vol. 73, No. 2, 1985, pp. 443.
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Ramsay, I.M. & Noakes, D.B., “Piercing the Corporate Veil in Australia”, Company and Securities Law Journal, Vol. 19, No. 1, 2001, pp. 250-271.
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[ 2 ]. Your Dictionary, revised 2012, http://law.yourdictionary.com/sanction, viewed 25 August, 2012.
[ 3 ]. Australian Law Reform Commission, revised 2006, http://www.austlii.edu.au/au/other/alrc/publications/reports/103/10.html, viewed 13 August, 2012.
[ 8 ]. Salomon v. A. Salomon & Co. Ltd. (1897) AC 22.
[ 9 ]. I.M. Ramsay & D.B. Noakes, “Piercing the Corporate Veil in Australia”, Company and Securities Law Journal, Vol. 19, No. 1, 2001, pp. 250-271.
[ 10 ]. H. Croall, Understanding white collar crime, Open University, Buckingham, 2001.
[ 11 ]. J.J. Gobert & M. Punch, Rethinking corporate crime, Butterworths, London, 2003.
[ 15 ]. P.L. Waller, C.R. Williams & B. Peter, Brett, Waller and Williams criminal law: text and cases, 8th edn, Butterworths, Sydney, 1997.
[ 16 ]. P. Bhattacharya, “Court Rules Union Carbide Not Liable in Bhopal Case”, The Wall Street Journal, 2012, http://online.wsj.com/article/SB10001424052702303561504577493642502980690.html, viewed 1 September, 2012.
[ 17 ]. Personal Liability for Corporate Fault Discussion Paper, Corporation and Markets Advisory Committee, Canberra, 2005.
[ 18 ]. The HIH Royal Comission, revised 2012, http://www.hihroyalcom.gov.au/, viewed August 14, 2012.
[ 19 ]. M. Kirby, "Rethinking Company Law and Practice", Australian Journal of Corporate Law, Vol. 5, No. 1, 1995, pp. 176-177.
[ 20 ]. A. Keay, "Directors ' Duties to Creditors: Contractarian Concerns Relating to Efficiency and Over-protection of Creditors", Modern Law Review, Vol. 6, No. 5, 2003, pp. 686-687.
[ 21 ]. Survey of Company Directors, Department of Treasury, Canberra, 2008.
[ 22 ]. Proposed Directors ' Liability Reforms Released for Public Consultation, Department of Treasury, Canberra, 2010.
[ 23 ]. Personal Liability for Corporate Fault Reform Bill 2012 - Explanatory Document, Department of Treasury, Canberra, 2012.
[ 24 ]. C. Kennedy, “Criminal Sentences for Corporations: Alternative Fining Mechanisms”, California Law Review, Vol. 73, No. 2, 1985, pp. 443.
[ 25 ]. BBC News, “1987: Zeebrugge disaster was no accident”, BBC News, 1998, http://news.bbc.co.uk/onthisday/hi/dates/stories/october/8/newsid_2626000/2626265.stm, viewed 19 August, 2012.
[ 26 ]. BBC News, “Concorde crash kills 113”, BBC News, 2000, http://news.bbc.co.uk/2/hi/europe/851209.stm, viewed 20 August, 2012.
[ 29 ]. Law Reform Commission of Canada, Criminal Responsibility for Group Action (Working Paper No. 16), Law Reform Commission of Canada, Ottawa, 1976.
[ 32 ]. Department of Treasury, “Review of Sanctions in Corporate Law”, Australian Government, 2007, http://archive.treasury.gov.au/documents/1182/PDF/Review_of_Sanctions.pdf, viewed 23 August, 2012.
[ 34 ]. P. Gregory & M. Shaw, “Esso Fined a Record $2M”, The Age, 31 July, 2001, Business, pp. 1.
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