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In English law companies are considered to have their own legal personality which means that they can make contracts, must pay taxes, can sue and be sued. Do you think companies should be capable of being convicted of crimes? If so, in what circumstances do you think companies should be convicted?
I think companies should be capable of being convicted of crimes in some circumstances. It will be assumed in this essay that when companies are ‘convicted’, all employees in the company would be in trouble. This includes when a company is accused of a serious crime that breaches international law, such as using slave labour to produce goods and services. This also includes when it encourages employees to ensure their colleagues are not breaking the law. However, this does not include when it is clear who is responsible for the crime.
Suppose a large multinational firm, called Star, is a fashion retailer that is headquartered in London. It has generated sales of over £1 billion in 2020, and is regarded as one of the most successful firms in the fashion industry. However, for a long time, Star has been rumoured to be using slave labour from Bangladesh to manufacture its clothes, and has been convicted for this after sound evidence. Some argue that it is unfair on some of Star’s employees, particularly those who work in London. This is because it is likely that many of the employees in London were not aware that the company had been using slave labour. Even if they were aware of it, there is nothing they could have done to actually stop Star from breaching labour laws. However, there is something they could have done. The employees who were aware of the crime could have reported it, and not become complacent because “it’s not part of their job” or “not their responsibility” – employees should have a moral responsibility to report unethical or illegal activities taking place in their place of work. Of course, if Star’s employees in London were not aware that the company was using slave labour, then it seems unjust to punish them for the crime of the company. However, this is a price we as a society should be willing to pay for if it means serious breaches of the law, such as using slave labour, can be stopped. Slave labour undoubtedly has a great detrimental impact on not only on the actual labourers themselves, but also for the country they work in, which is usually in poorer countries. Poorer countries are exploited by richer countries, and this contributes to a cycle of poverty for them in which people are forced to work but not gain anything in return. Additionally, the English legal system tries to punish people for their crimes accordingly. This means that because Star’s London employees were not aware about the use of slave labour, it is unlikely that the court would punish them, or if it does, it is unlikely to give them a disproportionate sentence, such as spending five years in jail. The court is more likely to punish those who were assigned the responsibility of ensuring ethical practices are being observed at Star, or the top executives who are more likely to have known about it.
Similarly, companies should also be capable of being convicted of crimes because it may encourage employees to look out for one another and to ensure people are acting according to guidelines. For example, C is found guilty of insider trading at a financial company, and so C is convicted. However, let’s say insider trading was a common problem at the company. After C is convicted, someone else could carry on with insider trading. This does not stop the crime from being committed, so the problem persists. If, however, the company was capable of being convicted, then this may encourage employees to act within the guidelines, and also encourage them to ensure other employees are not breaking the law. This is because if one employee breaks the law, then other employees may also be in trouble. So, the problem of insider trading has reduced.
With that being said, companies should not be capable of being convicted of crimes when it is clear who exactly is responsible for the crime. Suppose A and B are employees at Star. If A assaults B, and it is clear that it was A that has assaulted B, then it should be A who is convicted for the crime, and not Star. This is because the crime in this case is individualised, i.e. it only directly affects two people: the victim and the perpetrator. Although Star can require employees to behave within the guidelines (and assuming that it has), it cannot guarantee that no employee will ever breach the guidelines. Humans have free will and they are unpredictable, so it seems strange to hold a company accountable every time an employee breaks the law. However, what Star can do is take necessary and appropriate action against A, such as dismissing him or her.
To conclude, companies should also be capable of being convicted of crimes in circumstances in which the crime is a serious breach of international law, such as slave labour, and when the crime could be easily be committed by another employee at the company if the original perpetrator is convicted, such as insider dealing. However, companies should not be capable of being convicted of crimes when the crime is clearly individualised, such as assault of an employee by another employee.