“In order to effectively punish and deter corporate crime, the law should impose criminal sanctions on individuals rather than on corporations.” Introduction
Corporate Crime refers to crimes committed by corporations, or individuals acting on behalf of companies (Tomasic, 1993). As corporate crime also involves top managers and employees of the company, it sometimes overlaps with white-collar crime (Grabosky & Braithwaite, 1987). There is no doubt that corporate crime has taken a heavy toll on Australian society, as proven by the Treasury’s 1985 Draft White Paper, which estimated that the revenue losses arising from tax fraud by corporations amounted to $ 3 billion per year (Grabosky & Braithwaite, 1987). Also illegal price fixing in the building industry added estimated costs of $30 million during the late 1970s, not to mention the hundred of deaths and tens of thousands of serious injuries occuring in Australian workplaces each year, which may have arisen as a result of violations of occupational health laws (Grabosky & Braithwaite, 1987). The prevention and detection of corporate crime are both difficult as much of it is hidden from the public eye. However, there is considerable debate regarding the basis of imposng criminal liability on a corporation that breaks the law. The main issue is whether the law should impose criminal sanctions on individuals rather than on corporations. Central to this discussion on criminal liability of corporations versus the liability of individuals within the corporation is the concept of corporate criminal liability. The paper will firstly introduce and discuss the concept of corporate criminal liability. This paper further attempts to discuss the different views held by scholars regarding the imposition of criminal liability on a corporation, specifically whether the corporation as an artificial person should be vicariously liable for its actions, or whether individuals within the company acting in the interests of the corporation should be held liable for the company’s wrongdoings. It does this by dividing the two different views of scholars into two different camps, the advantages of corporate criminal liability and criticisms of corporate criminal liability. It will ultimately be argued that the law should directly impose sanctions on the corporation, as it is a separate legal entity and thus its own person under the law, under the concept of corporate criminal liability. However, where an individual director or manager is accessorially liable for the commitment of an offence by the corporation, the law should punish those individuals accordingly.
The Concept of Corporate Criminal Liability
Under the doctrine of separate legal entity, a corporation is a legal person that is separate from its employees and shareholders, thus having the capability to own property, enter into contracts and sue and be sued under its own name (Ferguson, 1998). It is this doctrine that forms the concept of corporate criminal liability. The concept of Corporate Criminal liability is important in determining whether laws should impose sanctions on corporations or individuals for any illegal wrongdoing that may arise. In criminal law, corporate liability refers to the length at which a corporation as a legal person is responsible for the actions of the individuals acting on its behalf (Pop, 2006). Accordingly, the main goals of corporate criminal liability are characteristic of criminal law in general, in that it hopes to achieve deterrence, retribution and rehabilitation of corporate offenders, as well as to achieve consistency and predictabiliy similar to criminal law (Pop, 2006). Unsurprisingly, corporate criminal liaiblity has come under fire from critics, partly due to the fact that companies are arificial persons under the law and not natural persons.
Criticisms of Corporate Criminal Liability
Some critics of corporate criminal liability...