Criminal liability of corporations: A counter-productive policy?
- Why corporate liability is a beneficial policy?
- The burden of the crimes committed by companies
Criminal liability is one of the central aspects of a democratic system, assuring that wrongdoers will be punished for acts committed against the society as a whole. Criminal law has an important role to play in regulating the behavior of individuals, ensuring they abide by criminal law and are criminally responsible for their acts.
As such, a corporation is a legal person and thus criminally liable. This has some negative aspects. Notably, innocent shareholders may bear some cost of the serious criminal offences committed by their company, in that share prices may suffer. Nevertheless, this essay argues that even though holding a company liable for crimes can be costly to shareholders and creates negative externalities, the broader advantages arising from such a policy allows one to say it is efficient.
To demonstrate this statement, this essay will argue that corporate liability is a beneficial policy in the sense that its advantages outweigh its disadvantages. It will then focus on the shareholders to show that even if they suffer from the crime, this burden is legitimate to a certain extent and they are not the only one to bear the cost of the offence. It will focus on the UK context but will also refer to other legal jurisdictions where relevant.