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|a Laufer, William S.
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|a Laufer, William S.
|a Laufer, William
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|a Corporate Liability, Risk Shifting, and the Paradox of Compliance
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|c 1999
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|a The evolution of corporate criminal law is explained by the shifting risks of liability and loss between corporations and their agents in accommodating the illogic of vicarious liability. A vivid example of the effects of this risk shifting is seen with the recent emergence of the good citizen corporation movement. This movement en- courages prosecutors with vast discretion to leverage indictments and convictions of subordinate agents, resort to civil and administrative actions against large and medium-sized corporations in place of criminal indictments, compromise agent indemnification, and enforce corporate self-regulation through elaborate plea agreements. Not surprisingly, organizations tend to conceive of corporate compliance, no less corporate ethics, as matters of risk management that serve an important insurance function. Corporations that purchase only the amount of compliance necessary to effectively shift liability away from the firm encourage moral hazards. After risks are transferred, the firm's incentive to maintain high levels of care decreases. Crimes once imputed to the firm remain with wayward agents. Given equivocal evidence of compliance effectiveness, the rise of the good corporate citizenship movement risks undermining the objectives and spirit of the corporate criminal law
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