MSP proposes new fines for corporate crime

SNP MSP Bill Wilson today called for new fines for corporate crimes as he launched a proposal for companies to be forced to sell shares when they commit health and safety offences. 

Speaking as he launched a consultation in the Scottish Parliament Dr Wilson said

 "At present companies found guilty of criminal offences, and most notably those resulting in deaths and injuries, often appear to have only trivial penalties imposed. For example, the fine for criminally causing the death of a worker or member of the public is less than £12,500 in 50% of cases. There are two main reasons for this.

"Firstly, judges are concerned to avoid putting companies out of business, as in so doing they might possibly be punishing the very employees who were the innocent victims of the companies’ offences in the first place.

"Secondly, companies are allowed to give their own versions of their financial status. This is equivalent to a judge saying to a housebreaker, ‘You are a very naughty boy. Now, if you can just tell me what level of fine you can pay.’

"Another problem is that monetary fines may penalise the victims rather than the perpetrators of corporate crime. There is nothing to stop companies offsetting fines and so maintaining share values and profits, by worsening employees’ pay and conditions. Meanwhile shareholders heedlessly continue to make money from the corners that companies may cut.

"My proposal seeks to solve these problems by allowing courts (a) to order reports into companies’ financial and other relevant circumstances, and (b) to order convicted companies to issue a set number of new shares. These shares would then be sold and the proceeds paid to the court. This form of penalty is known as an ‘equity fine’.

"In effect, an equity fine is a fine which is imposed upon the value of the firm, rather than being imposed upon its running costs.

"The fine could be imposed on any publicly limited company for a range of crimes, although health and safety is the main area of concern in our consultation, other areas, such as environmental crimes, might equally benefit from this approach."

Dr Wilson was supported by Louise Adamson, representing Families Against Corporate Killers (FACK), and Kathy Jenkins, representing the Scottish Hazards Campaign.

Louise Adamson said, "An annual work-related death toll in excess of 1600 is tragic testimony to the fact that the current system of fining companies for health and safety offences has not served as strict enough punishment or strong enough deterrent. FACK welcomes these proposals for equity fines which will lay the punishment for corporate offending at the feet of those who are ultimately responsible - those running the business - and we express our hope that this can form part of a package of measures to improve the health and safety of both workers and members of the public."

Kathy Jenkins commented, "The Scottish Hazards Campaign has consistently called for a wider range of sanctions to be available to the courts. We know that straight fines are often paid for by workers (through wage freezes/cuts, redundancies, worse working conditions) or by consumers/members of the public. These proposals for equity fines will ensure that those most responsible for corporate offending bear the cost. Our campaign is for safer and healthier working conditions. We believe that equity fines might also prove a more effective deterrent and eventually lead to a reduction in work related injury and death."

Dr Wilson's consultation on Equity Fines can be found at the link below