Criticism of The Concept
The existence of such a crime has been criticised, especially from the point of view of law and economics which argues that civil damages are a more appropriate means of compensation, recognition of the loss suffered and deterrence. Such arguments emphasise that, because the civil courts award compensation commensurate with the damage done, they apply the appropriate level of deterrence.
... pursuing corporate criminal liability results in society bearing the higher sanctioning costs of stigma penalties and the increased costs of deterring corporate misbehaviour created by the procedural protections of criminal law.
— Khanna (1996) p.1533
Again, such arguments contend that "over-deterrence" may divert resources from other socially-beneficial activities.
... when the penalty exceeds the social harm, the problem of socially excessive product prices and litigation costs again arises.
— Fischel & Sykes (1996), p.325
However, these views have themselves been criticised. Clarkson identifies four valuable characteristics of criminal prosecution:
- Stronger procedural protection of corporations, such as proof beyond reasonable doubt;
- More powerful enforcement agencies, such as the Health and Safety Executive in the UK;
- The stigma and censure that follow from conviction; and
- The symbolic role of criminal law that "sends a message" to society.
A further strand of criticism holds that only individuals can commit crimes. Further, it is individuals who feel the threat of deterrence. In England in 1994, OLL Ltd were convicted of corporate manslaughter over the Lyme Bay kayaking tragedy and fined £60,000 while Peter Kite, one of the company's directors, was sentenced to three years' imprisonment, arguably a greater influence on the conduct of company managers. Further, a corporation may simply be a "veil" for an individual's activities, easily liquidated and with no reputation to protect. Again it is argued, company fines ultimately punish shareholders, customers and employees in general, rather than culpable managers.
Read more about this topic: Corporate Manslaughter
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