When the Company Causes Harm: Effective Corporate Sentencing in a Justice System Based on Individual Fault

Abstract

The imposition of corporate liability is problematic in terms of both conviction and sentencing. Once convicted, it is still difficult to effectively sanction a corporation, as the artificial nature of the entity means it cannot be imprisoned. This problem is illustrated by the Pike River disaster and the relevant corporation’s conviction for nine health and safety offences. In that case, the defendant was insolvent, so no effective financial penalty could be imposed. This paper will consider the range of sanctions that could be used to effectively punish a guilty corporate defendant. A starting point for corporate sentencing would be the imposition of a financial penalty (both reparation orders and fines). However, if the company is insolvent, this may be ineffective. There are several mechanisms which could be used to overcome the issue of insolvency, but the court should also consider various non-financial penalties and the imposition of sanctions against individuals. The court may be able to adequately punish a company if a variety of penalties is used.