Essay
LNAT essay companies being convicted of crimes
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In English law companies are considered to have their own legal personality which meansthat 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?
A company is given the status of a legal en ty because it is comprised of a group of
individuals. The company’s ac ons- being a collec ve- have more in uence and a wider
impact on society than the ac ons of an individual. This essay argues the a rma ve, that a
corpora on should be convicted of a crime if it fails to live up to its responsibili es and
du es that are legally binding.
The criteria to determine the responsibility of companies depends on the prevailing ideology
and values in the corporate world. For example, leading neoliberal Milton Friedman stated
that the sole aim of companies should be to deliver pro ts to its shareholders, yet in recent
decades we have seen an evident shi to stakeholders and ESG goals alongside pro t
maximisa on. The change in investor pro les across the years have catalysed this change as
more people, especially the younger genera on, want to place their money in causes that
they support such as environmental protec on and the social side of businesses. Thus,
determining the responsibility of companies is dependent on the public concep on of the
goals of corpora ons. Ever since the 1970s, it has been illegal for a company to not pursue
pro ts and market forces will punish those who fall behind by erce compe on. Yet the law
should widen the scope of crimes that a company can be convicted of, to include ESG goals
that have gained relevance in today’s world. This is because: rstly, companies have a moral
obliga on to invest back into society from which they have pro ted from; secondly, due to J
S Mill’s Harm Principle that requires the law to prevent harm from being done to others,
even if that is caused by companies; and thirdly, because they owe their success to the legal
framework of the country that has allowed them to prosper. If companies do not adhere to
the rst and second principles of social responsibility and impeding harmful prac ces, then
they should be convicted of a crime.
Having established that companies should be liable for their failure to ful l their du es, one
must consider which crimes they should be convicted of. A key example that is prevalent
today is the increasing importance of parent company liability for environmental reasons.
This was re ected in the case of Okpabi vs Royal Dutch Shell where the inhabitants of
Nigeria were adversely a ected by oil leaks and mining techniques of RDS, therefore they
took them to English courts claiming that the company had a duty of care to not harm
people from its ac vi es. Other similar cases include UNILEVER PLC and Vedanta Resources
PLC v Lungowe. Thus, companies should be convicted of crimes when their ac vi es have
caused social or environmental harm, or where a parent company has allowed this to
con nue by not adequately supervising their subsidiaries.
Another crime that corpora ons should be held responsible for is nancial fraud or money
laundering. This violates their duty to invest back into society and the Harm Principle
men oned above. Furthermore, companies should be convicted of tort negligence cases
where it has been discovered that both the condi ons of duty of care and causa on have
been sa s ed, meaning that their ac ons directly caused signi cant harm to an individual or
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