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Media Release - Sentencing: Corporate offenders (23 January 2002)

When companies commit crimes should the courts be able to do more than simply fine them? This is a question raised by an Issues Paper released by the NSW Law Reform Commission today.

In NSW a fine is the most common punishment for a company. Companies cannot be imprisoned and there are few other sanctions available.

The Law Reform Commission has put forward a number of options to punish companies that commit crimes. These include:

  • Community service orders;
  • Publicity orders;
  • Disqualification and/or deregistration;
  • Corporate probation; and
  • Equity fines.

According to the Executive Director of the Law Reform Commission, Mr Peter Hennessy,

"The advantages of the fine is that it is inexpensive and easy to administer and does not allow government interference in the internal affairs of a company. On the other hand a fine may trivialise the gravity of a corporate crime. Fines also provide limited deterrence, do not address the rehabilitative aim of sentencing and may unfairly punish the innocent employees and shareholders."

"It is important to explore whether other more innovative sanctions could be imposed on companies which more truly reflect the gravity of the offence", he said.

Companies, like individuals, can be convicted of many offences such as fraud, theft, drug importation, perverting the course of justice and contempt of court.

A company can commit a crime in one of two ways:

  • where an employee acting within the scope of his or her employment commits an offence; and
  • where a company may be held directly liable for the actions of its senior officials.

Opinions vary as to whether companies should be held liable for the criminal acts of its employees or senior officials.

The Commission is seeking submissions from members of the public on the matters raised in the Issues Paper.

For further information contact Justice Adams, Chairperson, on (02) 9230 8737, or Mr Peter Hennessy, Executive Director, on (02) 9228 8230.