Post by nickd on Jan 8, 2012 21:44:43 GMT 1
George Osborne announces a new get tough message to greedy bankers - he's telling them they could go to jail!
Really George? With the Ministry of Justice having so little money, how exactly do you propose we pay for these highly expensive prosecutions?
Here are the headlines...
"Greedy bankers to face prison as Chancellor prepares new law to target reckless bosses who take risks with the economy"
Here's what I reckon to all of this...
It's being reported; - just ahead off the banking bonus season that chancellor Obsorne is proposing tough new laws which could see reckless greedy bankers ending up in jail charged with new corporate finance related offences. Somehow, I doubt whether this proposal will act as any kind of real deterrent to the great unregulated and is nothing more than an unimpressive gimmick being brought into play to assure the public that government is being equally tough on those at the top of the social ladder as it is towards those at the bottom.
Not that long ago Osborne was courting media attention and telling us that benefit fraudsters were no different to muggers who come and attack you on the streets. I can't see Osborne similarly snarling the same kind of brutal message towards errant bankers somehow.
Here's how it was reported in the Daily Mail...
"New criminal offence of 'corporate negligence' could punish financiers"
Greedy bankers such as Sir Fred Goodwin could be jailed under tough new laws being drawn up by George Osborne.
Growing public outrage over the severe damage caused by the banking crisis has prompted the Chancellor to prepare a new criminal offence of ‘corporate negligence’ to punish reckless financiers.
The move comes just days before the annual City bonus season, which is expected to bring another round of bumper payouts despite the sluggish UK economy and families suffering a historic squeeze on household finances.
All three main parties are now competing to offer the most hardline policies on tackling ‘fat cats’, after their internal polling revealed the scale of voters’ fury at the level of executive pay.
Under the plan, being worked on behind the scenes at the Treasury, legislation would be introduced to prosecute any boss of a ‘systemically important financial institution’ whose actions had a significantly damaging effect on the wider economy.
The plan would mean that the chief executives of the big five banks: Bob Diamond at Barclays, Antonio Horta-Osorio at Lloyds TSB, Stuart Gulliver at HSBC, Ana Botin at Santander and Sir Fred’s successor at RBS, Stephen Hester – would all be at risk of imprisonment if they ‘crashed’ the banks and damaged the economy through their actions.
Read more: www.dailyveil.co.uk/news/article-2083684/Greedy-bankers-face-prison-Chancellor-prepares-new-law-target-reckless-bosses.html#ixzz1ityChU28
In the course of researching other posts for Mylegal, I have stumbled across a fair few articles which deal with the whole question of corporate responsibility. Naturally, some of them touch on the thorny issue of when such irresponsibility becomes a criminal act.
On a website for the same firm acting for Asil Nadir (of Polly Peck and Tory donor fame) I found this interesting article, it deals with what are known as 'Deferred Prosecution Agreements'.
The article (which appeared in the Criminal Law and Justice Weekly) refers to concern over the viability of criminal prosecutions when dealing with corporate matters:
"The director of the Serious Fraud Office (SFO) and the Solicitor General, Edward Garnier QC, have recently made no secret of the fact that they consider the criminal justice system to be incapable of dealing with corporate prosecutions in a way that reflects
commercial realities."
The article goes on to look at an American approach.
Osborne's latest idea may win him some mass media appeal, but the stark reality is prosecutions involving corporate issues are inordinately expensive and very difficult to bring to Court. Many concerns have already been raised over whether your average jury has the ability to sit though what are often very lengthy and extremely complicated fraud trials. They go on for months rather than weeks and can involve thousands and thousands of documents. The money these cases costs is in millions rather than thousands of pounds; - it's money the Ministry of Justice simply doesn't have.
If Osborne wants to look into the issue of identifying individuals as criminally reckless in corporate set ups, is it not also the time for him to ask the Ministry of Justice to carry out an intensive review of these kind of prosecutions?
Is it not also time he realised that the financial sector has a duty to contribute towards clearing up their own mess and meet the costs associated with these kind of prosecutions where they culminate in culpability; - particularly where those costs are met out of the public purse?
I rather suspect that in time this will culminate in changes to the criminal justice system which end up in these kind of issues being decided in the sanctuary of very protective courts attended by a financially specialist judiciary. It will remain to be seen whether a gulf is created between breaches of corporate law and those committed by other folk who find themselves before our criminal courts in the more ordinary settings of a traditional criminal court.
Osborne should insist that the financial sector contributes more significantly towards whatever costs are necessary to rectify the continuing menace to society of corporate recklessness. Sufficient safeguards should be built in to ensure that such costs are simply not passed on to the consumer, perhaps a variable levy on bank bonuses could become the answer; - determined not just by their performance but by their good conduct?
Perhaps in doing so, we could see a little more cash made available for those who need it most in our ailing and rapidly failing justice system?
See link to Deferred Prosecution Agreements..
www.barkco.co.uk/files/www.barkco.co.uk/Images/PageContent/press/TimHarris.pdf