Death penalty call for corrupt companies

Date: 
Monday, 25 July, 2016

Corrupt companies should face a corporate ‘death penalty’, corporate probation or public shaming, a new report from the Centre for Crime and Justice Studies proposes today. The report – Redefining Criminality – by Dr David Ellis and Professor David Whyte of the University of Liverpool, reveals that the public consider the crimes of the powerful to be as serious as, or worse than, everyday crimes such as handling stolen goods or joy riding. Yet compared to the tough punishments imposed on everyday crimes, criminality among companies and state officials often results in disproportionately lenient sanctions.

According to the report, 95 per cent of those questioned viewed a bank knowingly defrauding customers by overcharging as on par with, or more serious than, handling stolen goods. Only two per cent regarded handling stolen goods as a more serious offence. Ninety-five per cent said they viewed a pharmaceutical company deliberately over-charging the NHS as on par with, or more serious than, joyriding. Only two per cent regarded joyriding as a more serious offence. Other findings include:

  • 96% report that they view police manipulation of evidence as on par with, or more serious than, shoplifting. Only 1% regard shoplifting as a more serious offence.
  • 95% view an accountancy firm hiding evidence of tax fraud from inspectors as on par with, or more serious than, shoplifting. Only 2% of the British public regard shoplifting as a more serious offence.
  • 90% view an investment firm manipulating stock prices as on par with, or more serious than, handling stolen goods. Only 6% regard handling stolen goods as a more serious offence.

The findings come against the background of renewed concern over the business activities of powerful corporations. Earlier this month, the consumer organisation Which? reported that ‘punitive’ unauthorised overdraft fees were more expensive than payday loans. In June, the Health Secretary Jeremy Hunt asked the Competition and Markets Authority to investigate allegations that drugs companies were overcharging the NHS for a range of medicines.

The report proposes a number of sanctions that could be imposed on corrupt organisations:

  • Corporate death penalty: Companies would be nationalised or put into the hands of a receiver.
  • Corporate probation: An established punishment used in the United States, this involves imposing a specified set of conditions on the convicted company under strict supervision.
  • Public shaming: This might include publishing an advertisement in a newspaper that publicly announces a conviction, or being ordered to show a sign detailing the conviction outside a firm’s premises.

Dr David Ellis, one of the report authors said:

This report demonstrates that the public overwhelmingly view the fraud and corruption committed by people in positions of institutional power, and by private corporations, as equally, if not more, serious than the crimes that the criminal justice system spends much more time and energy on.

Such biases within the criminal justice system are clearly out of touch with public opinion and must be addressed in order to tackle the most serious harms inflicted upon society.

Richard Garside, Director at the Centre for Crime and Justice Studies said:

This research finds that state and corporate offending are viewed as a serious matter. This isn’t about arguing that bent bankers should receive tougher sentences than shoplifters, or that joy riders should be treated leniently compared with corrupt officials. But it important that appropriate sanctions for corporate and state crime are applied consistently and in keeping with its seriousness.