Gobert, 'Controlling Corporate Criminality: Penal Sanctions and Beyond'

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You are here: BAILII >> Databases >> United Kingdom Journals >> Gobert, 'Controlling Corporate Criminality: Penal Sanctions and Beyond' URL: http://www.bailii.org/uk/other/journals/WebJCLI/1998/issue2/gobert2.html Cite as: Gobert, 'Controlling Corporate Criminality: Penal Sanctions and Beyond'

Controlling Corporate Criminality: Penal Sanctions and Beyond

James Gobert

Copyright © 1998 James Gobert.
First Published in Web Journal of Current Legal Issues in association with Blackstone Press Ltd.

Summary

While journal articles on corporate crime have tended to focus on the proper test of substantive liability, the more meaningful issue from the company's perspective may be what sanctions will be visited on it should it be convicted of an offence. This article examines the range of possible sanctions, as well as the possibility of establishing a scheme of incentives which would dissuade companies from committing crimes in the first place.

Introduction

Oliver Wendell Holmes' advice to law students that they should see the law through the eyes of the "bad man" (Holmes 1897) was never more apt than when applied to companies. The "bad man" -- more accurately, the amoral man -- obeys the law not out of a sense of moral conviction but because of the consequences that may befall him if he does not. The company is the epitome of the "bad man". It has no mortal soul to preserve. ⁽¹⁾ Its preoccupation is with profits, and, when presented with alternative courses of action, the question it will ask itself is whether it will be better or worse off financially for having followed a particular course of action. When the specific issue is whether or not to pursue a business practice that is in violation of the law, the analysis may remain the same. The basic comparison is between profits less potential fines and other costs incurred in the defence of a criminal prosecution, discounted by the probability of detection, prosecution and conviction, on the one hand, and profits generated through a law-abiding operation of the business, on the other. Of course, intangible factors, such as the desire to avoid adverse publicity, as well as the company's ability to attract and retain key personnel, may enter the equation, but profitability remains the bottom line.

If this is a not inaccurate, albeit simplified, description of the corporate mentality, then at least as important as devising a workable theory of substantive liability is the development of a regime of meaningful sanctions. While the literature is rich with articles exploring the former, however, the problem of sanctions has remained relatively ignored. Yet it is error to assume that the establishment of a body of substantive criminal law that will allow for the prosecution of companies will result in a transformation of corporate behaviour. To the company's way of thinking, there may be little point in changing a criminogenic but profitable method of conducting its business unless it is in its financial interest to do so. To take but a simple example, if a company can undersell its competitors and force them out of business by not installing expensive but legally mandated safety equipment, while incurring the occasional de minimis fine for its failure to have installed the equipment, where is the incentive to comply with the law? My objective in this article is to take a critical look at corporate criminal sanctions, both those which the courts currently impose and others that may have criminological merit ⁽²⁾.

But the process of investigation, prosecution and sanction is an expensive and perhaps not particularly effective way of addressing the problem of corporate misconduct. The optimal solution would be if companies could be persuaded to monitor their own activities and not engage in wrongdoing. I therefore propose in this article to look beyond sanctions, to see if there might be room for schemes which provide companies with incentives both not to violate the law and to report any violations that should occur. I am, however, under no idealistic illusions. If such schemes are to be effective, they will have to be shown to be in the company's own self-interest to participate.

Fines - The Penalty of Default

The task of constructing a viable regime of corporate sanctions, like the task of constructing a viable theory of corporate liability, has been hampered by the judicial and legislative tendency to equate a company that violates the law with an individual who violates the law. The caution evident in the Crown's less-than-vigorous pursuit of corporate wrongdoers, as well as the reluctance of the courts to convict companies of crimes, may be explained in part by the perceived absence of a meaningful sanction that could be imposed even if a conviction were to be obtained. Stable, J, put his finger on the problem in R. v ICR Haulage [1944] 1 All ER 691 when he stated that "the court will not stultify itself by embarking on a trial in which, if a verdict of guilty is returned, no effective order by way of sentence can be made." (Id., 693) When sanctions against individual offenders were limited to imprisonment and capital punishment, there was no corporate analogue available. The fine became the penalty of default.

This is not to say that the fine is not without its penological merits. One obvious advantage is that it is relatively cost-free to administer. When offenders are sentenced to prison, the government must bear the not inconsiderable expense of housing and feeding the offender, providing a secure facility, and employing the necessary personnel to maintain order and protect the public against escapes. In 1991/92, it was calculated that the average cost of maintaining a prisoner behind bars in England and Wales was approximately £22,000 per year. (Harding and Koffman 1995) In contrast, the administrative costs involved in collecting a fine are de minimis. Furthermore, these costs can be charged to the offenders, who remain at liberty and able to earn. Prisoners, in contrast, are paid token wages and cannot realistically be expected to contribute to the costs of their imprisonment.

Another advantage to the fine is that it generates the capital to provide compensation or restitution to the victims of an offence. (The difference between compensation and restitution is that whereas compensation attempts to provide a satisfactory substitute -- usually money damages -- for the harm incurred, restitution, more ambitiously, seeks to restore the status quo ante either by undoing the harm done or by placing the victim in the same position in which he or she would have been had the crime not occurred). However, at present there is no obligation on the government to use the proceeds of a criminal fine for either compensation or restitution. Even if it wished to impose a compensatory or restitutionary penalty, a court may have insufficient evidence of loss to make an accurate determination of the amount needed.

Courts are in a position to gather evidence of loss, however, as there exists statutory authority for the provision of compensation to victims of criminal offences in conjunction with a criminal prosecution (Criminal Justice Act 1988 secs. 104-115; Power of Criminal Courts Act 1973) This merger of the criminal and civil makes particularly good sense in the corporate context. The financial ability of the victim of corporate wrongdoing to pursue a civil claim will usually be no match for the financial resources which the company can bring to bear in defending the suit, and, in what often becomes a war of attrition, litigants can find their financial resources exhausted before they get to trial. A settlement may be the only practical alternative, but the company will hold the stronger bargaining position and be able to exploit it in settlement negotiations. Settlements are unsatisfactory from a jurisprudential vantage point for they allow a corporate wrongdoer to "buy off" its victims and thereby avoid a judicial decree publicising and condemning its criminal acts.

Where there are large numbers of victims, as where millions of customers are illegally overcharged by a matter of pence, no single individual will have lost sufficiently to make a civil suit worthwhile. And which civil litigants are to sue when the harm is to the environment? In all of these cases, it makes sense for the state to adapt the criminal proceeding to allow for compensation and restitution, in addition to any other objectives it might have, even if it means prolonging the trial to receive evidence of the harm caused by the crime. ⁽³⁾ In the United States, under federal sentencing guidelines for organisational offenders, restitution orders are not only mandatory (USSG s.8B1.1.) but take priority over any fine due the state (USSG s.8D1.4(b)(4). Thus, if a company's assets are limited, the moneys first collected go to the victims of the offence. Of course, victims should not be precluded from pursuing their civil remedies in a separate proceeding, if they prefer to do so.

In the corporate context, a fine has the additional advantage of relating directly to the nature of the corporate enterprise. (see generally Parker 1989; Posner 1992). Deterrence theory posits a rational offender who calculates the advantages and disadvantages of obeying the law. The penalties following a conviction need to be sufficiently great to persuade the would-be law-breaker not to take the criminal path. The problem that theory encounters in the case of the human offender, however, is that the comparison is not of like with like. The putative offender has to balance the benefits of, for instance, assaulting an enemy against the prospect of spending five years in jail. Most corporate crimes, in contrast, are financially motivated. The monetary gain that the company might expect from violating the law can be compared to the monetary loss which would occur if there were to be a prosecution and conviction. As a rational cost-benefit calculator ⁽⁴⁾, the company is likely to be responsive to a financial penalty. Whereas the greatest threat to an individual may be the loss of liberty, the greatest threat to a company is the loss of profitability. Because such a loss strikes at the essential purpose of the company, a fine holds the potential to be an effective deterrent. Moreover, the fine may induce the convicted company to discipline or discharge those responsible for placing it in legal jeopardy, thereby allowing the corporate sanction to filter down to its human source. (Posner 1992)

To be effective, however, a fine must be sufficiently onerous to have an impact on the company. In practice the fines imposed by the British courts have bordered on the trivial. In Tesco Supermarkets Ltd v Nattrass [1971] 2 All ER 127, the leading case on the substantive law of corporate criminal responsibility, the fine imposed by the trial court was £25. Perhaps the inadvertent over-pricing involved in the case was not terribly serious, but in Alphacell Ltd. v Woodward [1972] 2 All ER 475 the corporate defendant was fined £24 for having polluted a river. Even by the standards of the early 70's these were grossly insufficient sums to cause a company to ameliorate its behaviour, if this were their aim.

The passage of time has seen little shift in judicial sanctioning. Bergman (1992) reported that the average fine imposed in 1991 for a health and safety violation was £732. Extreme but not all that exceptional is R. v British Steel PLC [1995] ICR 586 where the defendant was convicted of violating section 3 of the Health and Safety at Work Act 1974 after one of its platforms had collapsed and killed an innocent workman. The trial judge fined the company £100. The company challenged the conviction and, in what can only be described as an excess of hubris, the amount of the fine. The Court of Appeal upheld the conviction and described the fine as "derisory", openly lamenting its inability to increase it. Rightly so, for the fine not only failed to take into account the defendant's assets, but also the harm caused by its actions. As opposed to having a deterrent effect, such penalties may actually foster corporate irresponsibility. (Box 1983, at p. 59)

In determining a suitable level of fine to achieve deterrence, account needs to be taken of the company's calculations that its offence will be detected, and that a successful prosecution will follow. A hypothetical may bring home the point. Assume that the maximum fine that a company would face if convicted of a particular offence was twice the expected profit that would be generated by the illegal operation. Under a strict economic analysis, it would be in the company's financial interest to continue its illegal behaviour as long as its estimate of the chances of detection and conviction remained below 50%. An additional factor from the government's perspective is that the fine should be sufficient to repay the not inconsiderable costs of an investigation.⁽⁵⁾

As indicated, fines in practice have been generally minimalist. Part of the explanation is that the court's reference point is the regulatory violation and not the harm resulting from that violation. Another part of the explanation is that in cases where an offence may be committed by either an individual or a company, the fine is generally set with the human offender in mind. However, the net worth of the typical company is likely to dwarf the net worth of the typical individual, and a fine that might seem oppressive for an individual is likely to be a drop in the bucket for the company. What might in theory be argued to be a non-discriminatory approach to criminal sanctions turns out in practice to be yet another illustration of an uncritical anthropomorphism that transposes to companies a penal structure designed for human offenders. ⁽⁶⁾

Even statutory sanctions specifically directed at companies may fail to distinguish between the small family-owned business and the large multi-national corporation. This problem, however, is not insurmountable. A useful model was provided by the unit fine provisions of the Criminal Justice Act 1991. Under Section 18 of the Act two offenders who committed the identical crime could receive different penalties if they had different "disposable weekly incomes." The idea was to make the severity of the fine comparably burdensome for rich and poor. The unit fine provisions were held up to ridicule, however, when they resulted in what appeared to be exorbitant penalties for relatively minor offences ⁽⁷⁾, and they were subsequently repealed. (Criminal Justice Act 1993 s.65) However, the concept may merit resurrection in the corporate context, especially in respect to serious offences. ⁽⁸⁾ Under the European Union's competition law provisions, fines of up to 10% of the company's previous year's global turnover can be assessed. ⁽⁹⁾ In the Commission Decision in Re Polypropylene [1988] 4 CMLR 347 these provisions led to a fine of over 35 million pounds in a case of price-fixing. Of course, making an accurate determination of a company's assets may not be that easy, but it is interesting to note that the type of pre-sentence social inquiry report that is routine in respect to individual offenders is rare in the case of the corporate defendant. (Wells 1993)

Raising the absolute ceiling on fines, however, is not unproblematic. For a company already operating on the margin, a high fine may drive it out of business. ⁽¹⁰⁾ For a successful company, the increased maximum might still be barely noticeable. Absolute sums can be terribly misleading. In the same year that British Petroleum was fined the impressive amount of £750,000 for safety violations, it reported an even more impressive profit of £1,391,000,000. (Slapper 1993) The fine represented less than one percent of the company's after-tax profit. In industries where criminal violations are widespread, and the Crown, lacking the resources to proceed against all violators, decides to bring a deterrent prosecution against a target offender, an onerous fine will strike disproportionately at that company vis-à-vis its competitors.

Perhaps one does not feel much sympathy for the offending corporation which is singled out for prosecution. The more serious drawback to draconian fines is their spill-over effect. In the non-corporate context, there are, inevitably, secondary consequences when a convicted offender is sent to prison. The family of the offender is likely to suffer psychologically and economically. Although these repercussions may be burdensome for family members who have themselves committed no crime, the spill-over is not part of a formal state policy but more of an incidental corollary to the punishment of the offender. In the corporate context, the danger is that there is all spill-over and no punishment. Under Tesco Supermarkets Ltd v Nattrass, [1971] 2 All ER 127, a company becomes criminally liable when a person of sufficiently high standing within the company to be "identified" with it commits an offence. The corporate executives whose crimes are attributed to the company under this scheme are likely to be the last to be made redundant if the company is forced to retrench following the imposition of an onerous fine. More probable is that innocent members of the company's workforce will lose their jobs in order to generate the savings that can be used to pay the fine. Such persons are expendable and easier to replace in better times than the "brains" of the company. ⁽¹¹⁾

If layoffs are to be avoided, the fine may have to be passed on to innocent members of the public in the form of price increases. In industries where a company has a virtual monopoly ⁽¹²⁾, the public may be powerless to resist the price rise. Setting fines that are sufficiently high that they cannot be passed on without a significant loss in the company's market share may minimise the pass-on effect, but swingeing fines increase the prospect that a company will lose its competitive edge and be driven out of business. If this occurs, the brunt of the punishment may be shouldered by those such as the company's employees, suppliers and distributors, who are themselves innocent. The government too will share in the loss, for it will lose tax revenues while having to provide benefits for those who are now out of work. Corporate liquidations are simply not in the interest of the economy as a whole. While shareholders too will be adversely affected by a high fine, the rejoinder in their case is that they were never entitled to the dividends of the company's illegal practices in the first place.

An ingenious solution to the spill-over problem has been advanced by Professor Coffee (1981). His proposal is that courts be able to order a corporate offender to issue new shares of stock in the company equal to the value of any fine which the court might wish to impose. These shares would then be sold on the open market, and the funds generated used to redress the harm caused by the company's wrongdoing and compensate any victims. ⁽¹³⁾ Because this "equity fine" would precipitate no immediate need for cash, it would not be necessary for the company to raise the price of its product; and, as the company's operating capital would not be reduced, it would not have to lay off any workers. At the same time, the equity fine, because it takes into account future as well as past earnings, would effectively raise the limit of the monetary penalty which could be assessed against the offender.

The one group that would be disadvantaged by an equity fine would be the company's shareholders, the value of whose stock would be reduced. ⁽¹⁴⁾ With more shares on the market, their company would also become more vulnerable to a hostile take-over. However, the disadvantage to shareholders need not cause undue concern. First, the shareholders presumably benefited from the profits generated by the company's illegality, and have no more entitlement to such profits than does the company. Secondly, it is the shareholders' responsibility to exercise supervisory control over management; after all, it is their company. In practice as well as in law, corporate ownership and management have become effectively severed, but the prospect of an equity fine may spur shareholders to take a more pro-active role in the management of their company. If this were to be its legacy, the equity fine will have brought welcome reform to the law of corporate governance.

Despite its attractiveness, the equity fine suffers from the same fundamental weakness as its more traditional cousin. The problem with fines, whatever the species, is that they lend themselves, all too easily, to a cost-benefit analysis. Like the costs of labour and advertising, the fine becomes simply another entry on the corporate balance sheet. If continuation of a company's illegal practices, burdened by the occasional fine, will be profitable, a rational company may well not be deterred from its criminogenic way of doing business. The crime is viewed not as a wrong against society but as a non-capital expenditure.

Community Service Orders

Individual offenders often receive a community service order in lieu of imprisonment. Community service may be viewed as a form of atonement. By providing a constructive benefit to the community, the criminal repays society for the harm which he or she has caused. In the case of convicted companies, a community service order likewise would provide the company the opportunity to make amends for its crime. This is an attractive sentencing option given the impossibility of imprisoning the company. It also provides a means, as will subsequently be discussed, of avoiding the spill-over effects of a heavy fine. Where the fine that the court might wish to impose will exceed the company's ability to pay and an equity fine is not feasible (perhaps because there are few potential investors or the defendant is a limited company⁽¹⁵⁾), a community service order holds particular appeal.

The community service order should be entered not against specific individuals within a company but against the company itself. The company would be required to engage its workforce in a socially constructive project. ⁽¹⁶⁾ The order should be shaped to take into account the company's expertise. Thus, it would not be inappropriate for a court, without binding itself, to solicit proposals from the company as to the type of project that would be best suited to its capabilities. Where feasible, the order should be restitutional in nature and designed to repair or undo the harm the company had caused. An obvious example would be an order that required an industrial polluter to clean up the environmental damage it had created. ⁽¹⁷⁾ Even if the envisaged project was beyond the company's capacities, it could be ordered to provide the backup support, as well as the financing, for others who were more qualified. Financial underwriting of a project by a third party, however, is less attractive than a sentence that directly engages the company and its personnel in the community service for it in effect becomes a fine by another name.

A court should insist that the company's management be involved in any community service order. Corporate executives should not be able to delegate this responsibility to employees any more than a convicted defendant should be allowed to hire a substitute to serve his prison sentence, particularly given that under the "identification" test of corporate criminal liability established in Nattrass, it is the executive's fault that exposes the company to a conviction in the first place. As a practical matter, a community service order imposed on a corporate executive holds more potential than a comparable order imposed on the typical thief or burglar. Most petty criminals have no formal training and few useful skills. The benefits which they can be expected to provide to society as a result of their community service will be limited. Corporate executives, in contrast, will often have talents that will allow them to take on more ambitious projects. In one American case, for example, a convicted corporate officer was ordered to help design a rehabilitation programme for ex-offenders. ⁽¹⁸⁾

Compelled research into the causes and prevention of the company's crime offers another avenue for a sentence that links sanction to offence. While, for example, a court might order a corporate offender convicted of health and safety violations to introduce state-of-the-art safety equipment (See Fisse 1990), sometimes the "state of the art" is severely deficient (perhaps because no company in the industry sees it in its financial interest to have a well-financed Research and Development department as long as none of its competitors do). In such cases the offender could be ordered to undertake the needed research. Assume, for instance, that British Rail and P&O Ferries, the corporate culprits in, respectively, the Clapham Junction rail crash and the capsize of the Herald of Free Enterprise, had been convicted of manslaughter (neither was in fact). As part of a sanction package, the court might have ordered them to undertake research into the ways that similar disasters could be prevented in the future. As it was, this task was allocated to government appointed boards of inquiry subsidised at taxpayer expense.

The provision of assistance to those in need provides yet another direction which a community service order might take. In United States v Danilow Pastry Corp (1983) 563 F. Supp. 1159 (SDNY) a New York court required convicted bakeries to supply fresh baked goods without charge to needy organisations for a twelve month period. Orders such as these would not necessarily result in compensation or restitution to the victims of the offence, however. They are designed to supplement, rather than displace, compensation and restitution orders.

There may be some spill-over effects when a community service order is entered, but they will be of a lesser degree and of a different kind. A swingeing fine can lead to redundancies, with laid-off workers losing their source of income. A community service order, in contrast, is unlikely to result in job losses. To the contrary, the company may have to hire additional personnel to fulfil the terms of the order. Employees may balk at having to perform tasks other than those which they were hired to do, but reassignments are not uncommon in industry and the acquisition of new skills is arguably in the employees' long-term interest.

A more serious danger that needs to be guarded against is that of the court or government hijacking the sentencing process for its own ends. There are innumerable meritorious projects that might be suitable for a community service order, and a court might be tempted to shape its order to fund a pet project. In United States v Missouri Valley Construction Company (1984) 741 F.2d 1542 (8th Cir) the trial judge ordered the convicted corporation to endow a chair of ethics at the state university. While there was no suggestion that the judge had acted improperly or had any ulterior purpose in mind, one can imagine the outcry if the judge were to be subsequently appointed as Vice-chancellor of the university. The judge's order in the case was in fact reversed on appeal. A similar danger is that the government might come to regard community service orders as a means for co-opting private industry into undertaking projects which it is unwilling to pay for itself --why build a hospital at public expense when one can recruit a convicted company to do the job? Another danger is that the community service order will be used to circumvent the upper limits of the fine set by Parliament, although this risk could be avoided by careful judicial scrutiny of proposed projects to ensure that their costs do not exceed the maximum fine which could be imposed by law for the offence. A budget could be prepared by an independent analyst appointed by the court.

There is also a penological dilemma that merits attention. Criminal sanctions serve a denunciatory function, marking the offender as one who has wronged society. A community service sentence, however, rather than resulting in stigma, may enhance the offender's reputation. Consider again the Missouri Valley Construction case where the trial judge ordered the convicted corporation to endow a university chair in ethics. Long after the company's illegal activity would have been forgotten, the chair would remain in existence. If designated by the name of the company (not uncommon in respect to endowed chairs), this initially involuntary established linkage would provide the company considerable free publicity, and, ironically, would associate it with the highest of ethical standards. Likewise, if a library or hospital were to be named after the company which financed it (again not that uncommon), the offender would benefit from the association of the building with the company. Sometimes a company will actively seek to exploit its community service sentence, as did the American petroleum company which was ordered to clean up a water source that it had polluted. The company subsequently produced TV advertisements which highlighted environmentally-friendly credentials. It is ironic indeed when criminal punishment serves to enhance an offender's public image. This danger could to some extent be avoided by attaching an adverse publicity order (see below) to a community service sentence.

Adverse Publicity Orders

Criminal sanctions can have both an educative and denunciatory effect. The conviction forms the core of the denunciation, but its impact may be lost if the public remain unaware of the defendant's crime. In an age when convicted criminals were hanged in the public square, the observability of the punishment reinforced the condemnation of the verdict. With the virtual abolition of the death penalty, there is less likelihood that members of the public will learn of the offences of those convicted of serious crimes. No stigma will attach to an offender if the public, or the critical segment of it from the offender's perspective, is ignorant of the verdict. Most corporate crimes in fact go unreported. (See Comment 1961) Cases where significant deaths occur, as in a fire or train crash, are the exceptions. In the more typical case, the corporate offence is either too technical to warrant the newspaper space required to explain it or insufficiently newsworthy to merit reporting. If a court wishes to achieve a denunciatory effect, it will have to take the initiative in seeing to it that the company's wrongdoing is publicised. It can do so by making an adverse publicity order. (Fisse and Braithwaite 1983) Such an order places on the convicted company the burden of informing others of its offence. An advertisement is typically placed in the newspapers at the company's expense, or the company might be required to send a letter to shareholders or relevant members of the public (such as potential purchasers of the company's product). An adverse publicity order is usually in addition to any other sanctions imposed by the court.

The idea of providing public notice of a conviction is not new. Fisse (1990) notes that the nineteenth century Bread Acts authorised magistrates to order the publication of the names of those found guilty of adulterating bread. (55 Geo. 3, ch. 49, s.10 (1815); 3 Geo.4, ch. 106, s.3 (1822). The more recent Fair Trading Act 1973 empowers the Director General of Fair Trading to publish information and advice to protect consumers. (sec. 124) Presumably this would include alerting the public to illegal activities of a company. In the United States, under federal sentencing guidelines, a judge may order a convicted company to publicise at its own expense the fact of its conviction and the remedial steps it plans to avoid future violations. A somewhat melodramatic example is the advertisement placed by the American Caster Corporation in the Los Angeles Times pursuant to a court order:

The prospect of an adverse publicity order may turn out to have a not inconsiderable deterrent effect. Companies often go to great lengths to cultivate their public image through advertisements in the media. If the company's "good name" were to be placed in jeopardy by a conviction, there might be a strong incentive to obey the law. The loss in potential sales from an adverse publicity order might far exceed the maximum fine that a court could impose. The public, through its purchasing power, would in effect be given a voice, albeit an indirect and crude one, in determining the penalty ultimately imposed on the offender.

What effect an adverse publicity order in fact will have is somewhat conjectural. Past victims of the company's offence may become aware of their victimisation and bring a civil action to recover damages. An example would be where individuals were suffering from the effect of exposure to a certain chemical, but were unaware of the source of their illness. An adverse publicity order would also provide notification to those contemplating future business with the offender, with a possible outcome being a decision to take their custom elsewhere or at least to proceed with caution. The public may also respond. The consumer boycott of products manufactured in South Africa during the era of apartheid, and the more recent boycott of French wines, as a protest against France's nuclear testing in the South Pacific, demonstrate that the public's purchasing habits are not immutable. However, adverse publicity may have little effect on the buying habits of the perhaps majority of consumers who are more concerned with "value for money" than with whether a company is a "good citizen". The government may also lack the expertise to create an advertisement that will achieve its intended purpose, and companies may be able to mount an advertising campaign of their own to neutralise the government's efforts (although such counter-publicity could be prohibited by court order).

Even if efficacious, adverse publicity orders may produce an undesirable spill-over effect. Assume, for the sake of argument, that an adverse publicity order led to an effective consumer boycott of the offender's product. The resulting loss of sales could cause the company to close some of its plants or go out of business altogether, in which case the force of the sanction might again fall disproportionately on innocent workers, suppliers and distributors. Those responsible for the critical decisions are likely to be better placed to find new employment and better cushioned against any interim financial hardship.

Restraint Oriented Sanctions

A rational sentencing regime should have as one of its objectives the prevention of future crimes. Sentencing an individual to prison effectively protects the general public from the offender for the duration of the term of imprisonment. The death penalty of course was the ultimate restraint, but, for all practical purposes, it has been abolished. While imprisonment of a company is obviously unfeasible, restraint need not be equated with physical confinement. In respect to human offenders, restraint may take the form of restricting the offender from engaging in the activity that led to the offence. An obvious example is where a driver's license is suspended or revoked because of motor vehicle violations. Similarly, a doctor who causes criminal harm to a patient may be struck from the medical rolls. Can a comparable regime of activity-related restraints be devised for companies?

Several years ago, the Council of Europe proposed a series of graduated penalties for convicted corporate offenders, many of which had a restraint function. ⁽¹⁹⁾ While a first or inadvertent offence of a minor nature might invite only a judicial warning or reprimand, a subsequent or a more serious violation could lead to an order prohibiting the company from activities that the court envisaged might lead to repeat offences. The term of prohibition would be equal to the length of a prison sentence that the court would have imposed had imprisonment been an option. In industries where government contracts are actively sought, the convicted company might be precluded from bidding on such contracts for a set period. Progressing still further up the restraint ladder, the company's license to engage in activities associated with its crime could be either temporarily or permanently suspended. The ultimate restraint for a corporate offender would be forced liquidation or closure. Not all corporate offences are of equal gravity, of course, and Parliament might choose to construct a point system for offences, such that the accumulation of a certain number of points would be required before this analogue to a "death penalty" would be triggered. ⁽²⁰⁾ Drivers of motor vehicles will be familiar with the concept of a point system, and its potential deterrent and restraining effects. As in the case of motor vehicle offences, each of the crimes which contributed to the company's point total would carry an independent penalty as well.

The problem with the liquidation/closure option is, again, that of spill-over. Closing down a company will have an obviously dislocative effect on employees who lose their jobs. From the government's perspective, there is a double whammy - the redundant employees will swell the ranks of the unemployed at the same time as the state is losing the benefit of the taxes paid by the company. Less drastic sanctions, such as precluding the convicted company from government contracts, encounter similar problems. Lost contracts lead to lost jobs, and the employees made redundant will bear the brunt of the sentence.

Rehabilitation and Remedial Orders

There is an alternative to restraint-orientated sanctions for protecting society against further crimes by convicted offenders. Individual offenders need only be restrained so long as they pose a danger to the public; they can be released when they cease to be dangerous. This point will be reached when the offender has been rehabilitated. At one time hailed as the way forward in penology, the attractiveness of the rehabilitative ideal has been tarnished by the exaggerated and unfulfilled claims of its proponents. (Allen 1981) The sticking point, often hard to accept because it concedes the limits of our knowledge, is that the complex constellation of factors -- biological, psychological, economic and social -- that cause individuals to commit crime is not well understood, with even less known about how to go about curing criminality. ⁽²¹⁾

The fact that efforts to rehabilitate individual offenders have been disappointing should not cause one to despair of the prospect of rehabilitating corporate offenders. There are reasons to believe that reformation of a company may be more feasible than rehabilitation of an individual. Most corporate decisions, including those to violate the law, are the product of hard-headed reason. While both judges and penologists tend to treat individual offenders as if they were rational beings, reality comes far closer to theory in the case of companies. (Tigar 1990) Furthermore, whereas the rehabilitation of individual offenders may require an inquiry into formative early life experiences, the rehabilitation of a company can usually ignore the psychological problems of those who generated the criminogenic policies in the first instance, who might well be deceased or no longer working for the company. Their successors may have no vested personal interest in preserving an illegal approach to the company's business.

One objection sometimes raised in connection with the compelled rehabilitation of a human offender is that it impinges on the offender's autonomy. This in turn raises the troublesome question of whether an offender has the right to serve the sentence prescribed by law and resist all attempts by the state to alter his mind or personality. Questions such as this are well beyond the scope of this article (See generally Shapiro 1974; Gobert 1975), and the point is mentioned only to note that comparable issues do not arise when the offender is a company. There is no comparable threat to the company's "personhood" because the company is not a person. Unlike a human being, a company exists by the grace of the state, and has no inherent right to exist in a criminogenic form.

How, then, would a rehabilitative order work in practice? The goal, which is the rectification of the corporate policies and practices that gave rise to the criminal offence, is so crucial that a remedial/rehabilitative probation condition should be virtually automatic unless the company could show that it had already taken adequate steps to prevent a reoccurrence of the offence. Unlike in the case of individual offenders, the convicted company should not be permitted to reject the rehabilitative condition, as the alternative of a prison sentence, which is the fate of individuals who reject rehabilitative orders, is not an option. Before sentence is imposed, however, the company should be afforded the opportunity to submit its own proposals for remedying the criminogenic aspects of its business. (Fisse and Braithwaite 1988) It is the company that is most familiar with the intricacies of its operation, and therefore best positioned to fashion remedies that take account of its particular situation. Certainly it is in a better position to do this than the prosecutor who is given this responsibility under the Law Commission's proposals for "remedial orders" in the case of a company convicted of its proposed offence of corporate killing.⁽²²⁾

A court should not automatically defer to whatever proposals the convicted company submits. If the court does not find the company's proposals acceptable, it should be able to appoint its own experts (to be paid for by the company) to conduct an independent examination and furnish it with recommendations. (Gruner 1993) Only then would the court prepare its order. The reach of the order could extend to required changes in company policies, the redeployment of individuals associated with the criminal offence (although the dangers of scapegoating must not be ignored), and the establishment of effective internal monitoring systems. (See Stone 1975) Beyond specific changes, a new philosophical orientation may be needed. Where in the past a company's system of rewards might have stressed productivity and profit to the virtual exclusion of all else, new policies might be mandated that identified compliance with legal and ethical standards as a critical performance indicator in all promotion and pay reviews.

During the probationary period, the company would have to submit periodic progress reports to the court, and unannounced inspections by probation officers would be permitted. If the court concluded that the company was not acting in good faith or was not fulfilling the terms of its order, it would have the authority to appoint a master to assume control of the company's operation until the terms of the order were met. ⁽²³⁾ The master would displace the company's CEO during the period of appointment, and the latter's powers would be suspended, as would those of the company's board of directors. Rules governing the powers of a master might be formulated by Parliament, or be left in the discretion of the trial judge in order to permit the order to take into account the particular circumstances of the offender. The master would be empowered to hire consultants and other personnel needed to ensure compliance with the court's remedial order, with all expenses being chargeable to the company.

The very threat of a court-appointed master might itself kick-start the reformation process. Companies uniformly prefer self-regulation to government regulation. No company wishes to see its operations under the control of a CEO not of its choosing. Even reasonable proposals from such a figurehead may be greeted with suspicion by corporate officials, which is not to say that these officials would not co-operate with a court-appointed master. Apart from any legal obligation to do so, they will want to hasten the day when they are able to resume control of their company.

Beyond Punishment

The criminal justice system is built largely on principles of negative reinforcement. Those who engage in disapproved conduct (i.e., violate the law) are negatively reinforced (i.e., punished) by a fine, imprisonment or other sanction. Providing positive reinforcement (i.e., some form of benefit) for not engaging in criminal activity is generally seen to be impractical. How could the state reward all citizens who did not commit crimes? A criminal justice scheme based on positive reinforcement principles may, however, be more feasible in respect to companies.

Two questions need to be addressed: first, what types of conduct should be rewarded; and secondly, what rewards could be offered to those companies which behave in the desired manner. In respect to the first question, the conduct to be positively reinforced must obviously go beyond mere obedience of the law. Both individuals and companies are already expected to obey the law. What, then, might be required of a company if a reward is to be bestowed? Insight into a possible answer may be gleaned by examining the sentencing guidelines for organisational defendants promulgated by the United States Sentencing Commission. ⁽²⁴⁾

The guidelines envisage a three stage process through which a court will proceed in setting a fine for a convicted corporate offender. In the first, the court will calculate a base fine that reflects the seriousness of the offence committed (USSG s8C2.4.). Seriousness is measured by the greater of the pecuniary gain to the offender; the pecuniary loss to the victim (to the extent the loss was caused intentionally, knowingly or recklessly); and the intrinsic wrongfulness of the offence as established by a statutory table (USSG s8C2.4(a)). Next, the court will multiply the base fine by a numerical factor that reflects the culpability of the offender (USSG s8C2.7). This will yield a recommended fine range. Finally, the court will select an appropriate fine from within the recommended range, unless it can justify a departure from that range (USSG s8C2.8).

Perhaps the most critical component in the above calculus is the determination of the "culpability score" against which the base fine is multiplied. A convicted company begins with a mean culpability score, which may then be adjusted upwards or downwards to reflect the presence of aggravating or mitigating factors (USSG s8C2.5). Among the more egregious aggravating factors are past misconduct of a similar nature and the involvement of high-level management in the offence ⁽²⁵⁾. The most significant mitigating factors are the establishment of a generally effective compliance programme to prevent and detect violations and the reporting to the appropriate authorities of any offence that might be unearthed before the latter learn of it from an independent source. A lesser amount of mitigation points are also awarded for co-operating with official investigations and accepting one's responsibility for the offence.

It is the mitigation dimension of the culpability score which is most relevant to our inquiry. What lies behind the concept of self-policing through compliance programmes is a recognition that a company is better positioned to monitor its activities than is an external agency. The latter has less familiarity with the company's internal structures and lacks ready access to its books and files. Furthermore, external regulatory and law enforcement agencies have limited resources at their disposal. They will inevitably find maintaining an ongoing presence problematic, and will usually only react when a violation has been brought to their attention. A regulatory authority, moreover, does not possess the power to dictate to a company how it should be conducting its business. In contrast, an internal compliance department which takes its job seriously is an ever-present check on practices which might ripen into violations of the law. It will have the authority, unlike the regulatory agency, to order changes in the company's operation.

The United States Sentencing guidelines, although in many ways commendably innovative, still are based on principles of negative reinforcement. The company is punished for its misdeeds -- or more accurately, given that American corporate liability is based on doctrines of vicarious liability ⁽²⁶⁾, the misdeeds of its employees. This is so even where an offence is in violation of company policy that is being rigorously enforced. The severity of the punishment is reduced for companies that have adopted compliance programmes, but such companies are still convicted. The argument that a reduction of the company's fine for having adopted a compliance programme constitutes a reward is not going to impress the company which has been driven into bankruptcy by the imposition of a multi-million dollar fine (which is not that uncommon in federal courts). The fact that the fine could have been two or even ten times the amount had the company not adopted a compliance programme is of little consolation. What would be a greater incentive to the company would be the opportunity to avoid prosecution, conviction and punishment altogether. Indeed, without such an incentive, a company must make the "prisoner's dilemma" calculation of whether it will be better off by self-reporting its crime, thereby incurring a certain but reduced penalty, or not reporting and taking its chances that the offence will go undiscovered. (Gruner 1994) Given the ease with which transgressions can generally be concealed under a corporate veil, the latter strategy is likely to appeal unless the incentives in favour of self-reporting are significant.

There is no reason why the carrot of avoiding criminal liability altogether should not be held out to companies which develop codes of good practice, police themselves through compliance departments, self-report any violations to the appropriate legal authorities and generally co-operate with official investigations; in other words, which behave like a model corporate citizen. (Walsh and Pyrich 1995) In order for such a scheme to be viable, however, there will need to be sweeping changes in the UK's approach to corporate criminal liability. Under prevailing legal doctrine, the threat of a prosecution is so meaningless, the likelihood of a conviction so improbable, and the prospect of a sanction that bites so remote that there is little incentive for a company to establish a compliance department. However, signs of change are beginning to appear. Recently both courts and the Law Commission have been moving towards an expanded basis of criminal liability. In Meridian Global Funds Management Asia Ltd. v Securities Commission, [1995] 3 All ER 918 the Privy Council extended the range of persons whose acts or knowledge could count as that of the company, by focusing on the rules of attribution which allocated responsibilities within the company. An alternative way forward is to interpret the language of a statute so as to impose vicarious criminal liability. This is what the court did in British Steel Plc [1995] ICR 586 in construing section 3(1) of the Health and Safety at Work Act 1974. Arguably the more intellectually honest approach would be to redefine when a company is liable for crimes which occur in the course of its business operation. In its review of corporate killings, the Law Commission advanced a test of corporate accountability which could be easily adapted to other branches of the criminal law. Its two major components consist of a showing that:

Apart from the difficulties associated with determining when a company's failings have fallen sufficiently below what can reasonably be expected of it to warrant criminal liability, the Commission's proposals can be faulted for preserving the anthropomorphic approach of it progenitors. Who comprises "management" may prove as contentious an issue as that of who constitutes the "brains of a company under Nattrass. A more intellectually defensible approach would be to ground substantive liability in a corporate failure to prevent a violation of the law, with a due diligence defence available to the company (Gobert 1994; Colvin 1995)

Whatever the final parameters of an expanded regime of corporate criminal liability, its knock-on effect will be to require more refined judgments on the part of prosecutors as to when criminal charges should be brought. Discretion will have to be exercised, and companies which have taken steps to prevent, detect and report illegal violations should be the beneficiaries of this discretion, even if their efforts have not proved successful in the instant case. (Gruner 1994) ⁽²⁷⁾ The United States Justice Department has adopted guidelines that allow for the non-prosecution of defence contractors who may have committed fraud when the company has a generally effective compliance programme and has voluntarily participated in the Department of Defence's Voluntary Disclosure programme. (Walsh and Pyrich 1995)

Still, a stronger incentive than the possibility of a favourable exercise of prosecutorial discretion may be needed to persuade companies to self-report their violations of the law rather than direct their energies towards their concealment. This can be achieved by affording the company a formal due diligence defence to criminal charges. (Council of Europe 1990, Gobert 1994; Sullivan 1996) A company which:

should be able to introduce evidence of these self-policing efforts in its defence. Each of the three strands is evidence of due diligence and together they may present a compelling case for an acquittal. The specifics of what constitutes due diligence in a particular case may further turn on idiosyncratic factors such as the nature of the company's business and the types of violations to which it may be particularly susceptible, the practices of the company's competitors (although industry-wide negligence can never serve as a creditable excuse), the company's own history, and any circumstances of the case deserving of special attention. Whatever the requirements, the burden of proving due diligence, but only by a balance of probabilities, should be placed on the company rather than on the Crown because of its greater familiarity with its operation. (Gobert 1994)

Allowing due diligence as a defence to a company charged with a criminal offence is justified in theory because the company which has exercised due diligence cannot be said to be morally blameworthy (to the extent that this concept has meaning in the corporate crime context). From a pragmatic perspective, the defence is warranted because companies might otherwise be reluctant to establish compliance departments, with their not inconsiderable administrative costs and the strain they can place on employer-employee relationships, unless ensured of an adequate return on their investment. (Pitt and Groskaufmanis 1990) Indeed, if the expense of implementing an effective compliance programme exceeds the amount of a fine which would follow a criminal conviction, companies may not deem compliance departments to be cost-effective.

The adoption of codes of good practice and compliance departments are indications that a company takes seriously its duty as a citizen to combat crime. Needless to add, however, a court must assure itself that these are not simply public relations ploys. The test is whether these mechanisms are generally effective in practice, even if they have failed in the instant case. Among the relevant questions to ask in determining whether a company's compliance program is cosmetic or meaningful are: What priority is adherence to ethical and legal strictures given within the organisation? Are periodic training courses held on these subjects? Are channels of communication available to employees who wish to report misconduct? Are those who submit such reports -- whistleblowers as they are known in the trade -- praised or ostracised? Are high-status personnel assigned to the compliance department? Are those whose violations of the law result in increased profits reprimanded or rewarded?

In attempting to ascertain the company's attitude to the law - is it an obstacle to be tip-toed around or the foundation for its operational practices - perceptions may be as important as "official" policies. The subliminal messages regarding the company's tolerance of illegality is often difficult to pin down and even more difficult to prove in court. But which do the employees perceive as more important to the company -- productivity or adherence to health and safety standards, ethics or profits? In order to avail itself of a due diligence defence, the company must both effectively communicate and consistently enforce its expectations that employees will conduct themselves in a law-abiding manner.

A company which has adopted codes of good practice and put into place compliance programmes that nevertheless fall short of the rigorous standards that would be required for a complete defence might still be eligible for a significant reduction in sentence if convicted. Taking a page from the recommendations of the Council of Europe discussed previously, the sanction for a company which has made a good faith attempt to exercise due diligence might be limited to a reprimand, warning or nominal fine. Whether and how the company tightened its procedures in response to this initial conviction would, however, assume great importance in any subsequent proceeding. As an added incentive to the voluntary adoption of corporate compliance programmes, they might be made a prerequisite for bidding on government contracts.

There will be spill-over effects to the public from the adoption of compliance programmes. Those involved in the monitoring of the company's activities will have to be compensated (often the compensation package of those in the compliance department is among the highest in the firm in order to insulate them from bribes and other improper inducements), and the costs can be expected to be passed on to the public in the form of price increases. However, these costs will be evenly distributed within an industry, rather than being visited on the one or two companies that are unlucky enough to be singled out for prosecution, as is presently the case. Moreover, with the expense of maintaining a compliance programme incorporated into the price of all of a company's products, the increased cost of any particular item is not likely to be great. In any event, unlike fines imposed for criminal convictions, these are not expenses that it is unfair or unreasonable to ask the public to absorb. Preventing crime is everyone's business.

Conclusion

With the beginnings of a discernible trend to a broadened basis of corporate criminal liability, the subject of sanctions for convicted companies is ripe for review. Critical examination of the possibilities has been assayed in this article. Just as different theories of punishment (retribution, restraint, rehabilitation, deterrence, etc.) are not mutually exclusive, so too it is not intended that a sentencing court would have to choose between the proposed sanctions. Rather, the court should be free to impose whatever penalty or combination of penalties is warranted by the circumstances of the case. The judge of course will have to exercise care in selecting the most appropriate punishment in each case, and any sentence would be subject to appellate review.

Because they run the risk of punishing workers for crimes that are properly the responsibility of the company, direct sanctions against employees need to be approached with caution. But the same dangers to the workforce, as well as to members of the public, are posed indirectly if court-imposed sanctions produce an undesirable spill-over effect. Of the possible sanctions canvassed in this article, adverse publicity orders, judicial decrees aimed at restraining the company's criminogenic business practices and traditional (as opposed to equity) fines carry the greatest risk of producing unwanted spill-over. Remedial/rehabilitative orders and compelled community service, in contrast, are less likely to have adverse spill-over effects. In addition, remedial/rehabilitative orders will help to protect society from future crimes and community service orders will provide the community with benefits that might not otherwise have been forthcoming. Thus these, along with equity fines which can be used to generate moneys to provide compensation and restitution, should be the sanctions of choice.

But prevention of crime is preferable to after-the-event sanctions. Incentives need to be created to encourage companies to adopt codes of good practice that stimulate and nurture legally responsible behaviour, and discourage the perhaps quasi-instinctive corporate inclination to hide wrongdoing behind a corporate veil. The company is in the best position to police itself, and should be provided the strongest possible incentive to do so. The establishment of codes of good practice, the maintenance of effective compliance departments which both deter and detect misconduct, the self-reporting of violations to the authorities, and co-operation with official investigations deserve to be rewarded in law. The possibility of escaping criminal liability, either through the exercise of prosecutorial discretion or the establishment of a due diligence defence, should in turn spur the types of developments that will reduce the incidence of corporate crime. It is in society's interest to transform corporate cultures that might previously have encouraged or implicitly tolerated illegality to cultures that take seriously their legal obligations.

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(1) The reference to the company's lack of a soul (which could be damned) is generally attributed to Baron Thurlow (Coffee 1981).
(2)This topic has received greater attention in other jurisdictions, See, e.g. Coffee (1981); Fisse and Braithwaite (1988); Fisse (1983); Note (1961).
(3) Under the United States Sentencing Guidelines (hereinafter cited as USSG) restitution may be bypassed if the court determines that the process of fashioning a restitution order would unduly complicate and prolong the sentencing process. USSG sec.8B1.1(b) This might be the case where the victims are unknown or the amount of the damage will not be clear until some future point in time (often the case in respect to environmental offences).
(4)Some, however, have questioned the rationality of corporate decision-making. (See Dunford and Ridley 1996)
[5] Unlike in respect to conventional crime, where victims can be expected to inform the police, the victims of corporate crime may be unaware of their victimization (as, for example, where millions of customers are overcharged by a matter of pence). To uncover crimes such as these, pro-active - and expensive --policing may be required.
(6) Compare Australian Commonwealth Crimes Act 1914 s.4(B) (authorising a pecuniary penalty of five times the amount that could be imposed on a natural person for the same offence).
(7) One reported case involved a fine in excess of £1000 for littering. See General Note to Part VI, Criminal Justice Act 1993. The effect of such cases was to divert public attention from the offender's crime to the unfairness of the penalty. The public felt sympathy for the offender, and the latter, rather than reflecting on the wrongful conduct that had given rise to the penalty, focused on the unfair treatment vis-à-vis others who had committed the identical offence.
(8) In the case of individuals, serious offences normally lead to imprisonment. Fines are employed only in regard to less serious offences. In the case of companies, fines are more likely to be the penalty imposed for both minor and serious offences, so unit fines should be restricted to serious offences.
(9) See E.C. Council Art. 15 of Regulation 17. Daily fines may also be imposed under Article 16 of Regulation 17.
(10) Coffee (1981) refers to this as the "deterrence trap."
(11) The Law Commission in its consultation paper on corporate manslaughter did not agree. It stated: "We are confident that no respectable company or organisation would leave in place . . . the people responsible for the operation of systems which had been condemned by a jury. . Law Commission (1994) The Commissioners, however, supplied no reasons for their optimism, and empirical evidence would seem to contradict their assertion. In many instances corporate officials who have been convicted of crime have suffered no loss of position or salary, and some have even been promoted subsequently.
(12) Monopolies may not take the form of a single company being the only supplier of a particular product. There may be numerous other suppliers of a fungible product, but, because of product loyalty or a perception that competitors produce an inferior product, buyers may be reluctant to switch, even if the offender's products become marginally more expensive.
(13) An alternative would be to present the equity shares directly to the victims, which would allow them the choice of either retaining the shares (possibly to be in a position to influence future corporate policy) or selling them.
(14) Often corporate officers receive stock options, in which case the equity fine may reach those responsible for setting the company on its criminal course. Coffee (1981) at 417-18. However, this effect may be averted by directors who sell their shares as soon as they become aware of a potential criminal prosecution.
(15) An equity fine could not be imposed on a limited company, as there would be no shares which could be issued, and courts lack the power to convert a limited company into a public company.
(16) For some possibilities, see Fisse (1981) at 1001-1003. While unions might be expected to object to these non-competitive work assignments, often the undertaking in question would not otherwise ever have occurred, and the court's order may result in the company's having to add to its workforce.
(17) See, e.g., United States v Allied Chemical Corp., 420 F. Supp. 122 (E.D. Va. 1976).
(18) United States v Mitsubishi Int'l Corp., 677 F.2d 785 (9th Cir. 1982).
(19) Council of Europe Recommendation No. R.(88) of the Committee of Ministers to Member States concerning Liability of Enterprises having Legal Personality for Offences committed in the Exercise of their Activities (1990). See in particular Recommendation II.7.
(20) Unlike the death penalty for individuals, closure/liquidation may not be permanent. Dissolved companies have been known to rise from their ashes (the so-called "phoenix phenomenon").
(21) Disagreement even exists as to such fundamental matters as what constitutes rehabilitation. Some see the goal as nothing less than the moral reformation of the offender, while others are content to teach the offender skills which will lessen the likelihood of a return to a life of crime after release.
(22) Law Commission, Legislating the Criminal Code: Involuntary Manslaughter paras. 8.71-8.76. (Law Cmnd. No. 237 HMSO 1996). The Commission's use of the term "remedial order" is somewhat ambiguous. It seems to envisage both a remedying of the harm and a remedying of the cause of the harm. In the present discussion, the focus is on the cause of the harm. Remedying of the harm is a form of restitution.
(23) The appointment of a master has often been resorted to in the United States in the case of prisons where there have been found to exist wholesale constitutional violations. See Note (1979). The option is also available in respect to companies under federal sentencing guidelines. See USSG s.8D1.5.
(24) USSG ch. 8. The Commission was established following passage of the Sentencing Reform Act of 1984 to develop specific policies for the benefit of judges required to implement the mandates of the Act.
(25) The category is more encompassing than that envisaged under Nattrass, for it includes not only directors and executive officers, who would fall within Nattrass, but also individuals in charge of major units within the organisation, who probably would not. See R. v Redfern [1993] Crim. L. Rev 43.
(26)See NY Central & HRRR v US, 212 US 481 (1909); US v Hilton Hotels Corp, 467 F2d 1000 (9^th Cir 1972) cert denied 409 US 1125 (1973)
(27) Where such considerations are not sufficient to dissuade the CPS from bringing a prosecution, they may still affect the selection of the appropriate charge.

United Kingdom Journals

James Gobert