MSP proposes equity fines for companies
26 Aug 08
Owners should be accountable for health and safety breaches, says SNP's Wilson
MSP Bill Wilson has proposed changes to fines for companies that break the law so that the courts can take into account more effectively the amount of profit that a business makes.
Dr Wilson, the SNP MSP for the south of Scotland, has opened a consultation on a proposed member's bill to introduce "equity fines" - giving the courts power to order offending companies to issue a set number of new shares in the company that are then placed in a fund administered by the state.
In addition, courts would be able to obtain pre-sentence company background reports to provide a more accurate picture of a company's finances.
Mr Wilson believes that the current system of simple monetary fines is an ineffective deterrent to companies breaking the law.
He quotes Lord Brodie's comment on passing sentence in the ICL/Stockline case: "The fines handed down in court often do not reflect the financial gain a firm may have made by failing to comply with an obligation." Judges, he adds, may be wary of risking putting a company out of business to the detriment of its employees.
Companies are also able at present to present their own financial information to the courts unchallenged - "surely a contributing factor to the low level of fines".
By contrast, an equity fines system "punishes those that benefit the most from corporate offending (owners and stakeholders) and avoids redistribution of corporate punishments to the most vulnerable groups".
Dr Wilson's proposal, which can be viewed at http://www.scottish.parliament.uk/s3/bills/MembersBills/index.htm, is out for consultation until 1 December.