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Lecture

6 Corporate crime.docx
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Department
Law
Course
LAWS 2301
Professor
Diana Young
Semester
Fall

Description
Corporate crime Corporate crime - 2 things are going on: corporations as offenders, and individuals who commit crimes within the corporation - When a person feels that the law doesn’t help them anymore, they stop following the law - Alegal person in law (either judicial or personality) can enter into contracts, they have continuation whereas shareholders have limited liability • Shareholders have limited liability, which means that the liability of a firm’s owners for no more than the capital they have invested in the firm. If the corporation goes bankrupt, they only need to pay back what they own - There is a division of ownership and control • The people who own the company aren’t always the ones making the decisions Corporations - The importance of regulating corporate conduct: • We place non-criminal limits on them to keep higher control over them • ACEO doesn’t own corporations and their primary obligation is to the investors - Corporation’s decisions occur through human beings.Act through an aggregate (many people performing various tasks), but because you are not really the sole person responsible for corporate actions, it makes it possible for people to resist responsibility for actions • Ex: “Doing my duty”, “I was just doing my job!” • Say they were just following orders - They are in a position to do much more harm than various individuals - Corporation provides: • Amean of investment • Mean to accumulate capital • Corporation allows many people to invest money in one place to engage in special projects which would be otherwise impossible for one individual - Performs an important function in society - Corporation itself does not exist without substantial state (government) intervention (ex: stock exchange) - People are motivated by responsibility to family, community, or society • Not everything is about making money - Your obligation as a CEO of a corporation is to your shareholders • As a CEO you can be a nice person, but it’s hard to make right and wrong decisions about how the corporation runs - Good business person= seen as more predictive • For people operating in corporate context, they will push the boundaries (find a way around the regulations/laws) Corporations and crime/harm - Corporations are in a position to do a lot of harm • Environmental degradation (toxic things in the environment) - There are problems with prosecuting corporate crime • The Crown must prove the: Mens rea (the guilty mind) andActus reus (the act)  Need both to prove criminal culpability • Criminal offences are thought as individual things/acts, and basically, the elements of an offence in criminal law are the mens rea and actus reus and this means you need the guilty mind (intent) and the actual act  This is hard because responsibilities are being delegated • Another problem of prosecuting corporations as an entity, you wouldn’t be punishing the person who was behind the scheme (like inAIG) • We tend to minimize corporate crime even though it is quite damaging. There are real problems in prosecuting these types of offenses, partly due to financial things • In Canada, there has only ever been 10 corporate prosecutions (in history, total) shows how hard it is to prosecute them - Prosecuting individuals can also be problematic • Often what you will get is a scapegoat, those lower in the “food chain”. It will be easier to attribute knowledge to the lower people rather than management Corporations and regulations (alternative to regulating corporations) - Corporations have continuity - Corporate malfeasants may not even be tied to the company anymore (left the company) - Regulation as a mechanism of social control has differences between criminal law and regulatory schemes • Regulation establishes norms for the conduct of businesses • Ex: health regulations for restaurants - We have alternate means of taking care of corporations that they are regulations. Why? Because regulations aren’t bound by the theoretical parts of criminal law (so no mens rea has to be proven) - Up to the policy makers in the corporation that the corporation has in place measures to ensure than the regulations are complied with • Strict liability: You don’t have to show intent, but rather that the corporation that breached their standards and did not use due diligence to make sure that the regulations were not breached  Due diligence: meeting reasonable standards of business. Breeching environmental regulations and so the corporation can say “This is an accident, we didn’t mean for this to happen, and we have put in place measures so that this doesn’t happen again” • Basic regulations ensure that future harm doesn’t happen - Even with these regulations, people still want to see corporations prosecuted. Why? Because of revenge and because you don’t want corporations to be seen as above the rule of law. We want to see that justice is served and there is a stigma associated with criminal prosecutions that we don’t see with regulations • Regulations seem flimsy compared to being prosecuted criminally • If regulations aren’t taken seriously, then we get the image that they are above the law Corporate prosecution in Canada - One of the most well-known corporate criminal prosecutions in Canada is the Westway Mine incident in Cape Breton • It was a coal mine operated by Curragh Corporation • It was seen as a boom to the community • The owner of Curragh (Clifford) was able to get government participation because t
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