The Importance of Sanctions

• The company as “economic man”

• Defining the objectives of prosecuting

• Tactical decisions• The role of the prosecutor

The Objectives of Sentencing

• Retribution• Restraint• Rehabilitation• General/Special Deterrence• Education/Denunciation

• Applying Sentencing Theory to Companies

Tactical Issues

• Choice of defendant – Whom to prosecute?

• Choice of charge – For what offence to prosecute?

• Choice of court – In what court to prosecute?

Whom to prosecute?

• Individuals–Employees–Directors,

officers and other corporate executives

• The company

Choice of charge• Individual defs.

– C.L./Stat. crime committed while engaged in the company’s business

– Being an accessory to a corporate offence

• The company– Regulatory

offence (e.g, HSE)

– Criminal offence (corporate manslaughter)

Does it matter?

Where to Prosecute

• Individuals–Magistrates

Courts

–Crown Court

• The company–Magistrates

Courts

–Crown Court

Sanctions (corporate officers and directors)

• Fine (general penalty for HSE conviction except in limited cases)

• Imprisonment• Disqualification• Community Service Order

Sanctions (cos.) -- HSE• Magistrates’ Court

– £20,000 Maximum Fine– Remedial order– Costs

• Crown Court– Unlimited Fine

• The Howe guidelines

The Howe Guidelines• Generally - Gravity of Offence and Means of

Offender• Extent of breach/how far short of appropriate

standard has company fallen?• Deliberate breach with a view to profit?• Degree of risk and extent of danger created• Isolated lapse or continuing breach?• Defendant’s resources?• Effect of fine on business?

Aggravating Factors

• Death resulting in consequence of a breach

• A failure to heed past warnings

• A deliberate breach with a view to profit (or avoidance of loss)

Mitigating Factors

• A prompt admission of responsibility• A timely plea of guilty

• Remedial measures taken after deficiencies drawn to company’s attention

• A previous good safety record

Post-Howe Issues• The relevance of:

– Profits (as measured by what?)– Profitability (the unprofitable company)– Turnover– Cash flow– Liquidity

• Determining a company’s financial status– Pre-sentence reports (who pays?)– The role of forensic accountants

Post- Howe Issues • Changing standards versus changing

attitudes• Are fines the answer?

– Spill-over effects– Passing on the cost of the fine– The wrong message

• Equity fines

The Brave New World of Sanctions

–Remedial Orders–Limitations on scope of co.’s

business (e.g., re govt. contracts)–Adverse Publicity orders–Community Service Orders–Closure/liquidation