White collar crime, which includes fraud and crimes committed by corporations, businesses and professional groups, is generally excluded from the zero tolerance approaches and calls for tough punishment attracted by what is popularly represented as ‘crime’. Yet the high toll of death, disease, injury, economic loss and damage to the environment which these crimes cause has consistently been argued to exceed that of other crimes. This article will firstly explore the significance, in the Scottish context, of these offences, before turning to consider how more innovative approaches could be adopted in an effort to control them.

The economic impact of these crimes is considerable. Fraud has recently been said to be increasing and to cost every person in Scotland £330 each year (Scottish Government Press Release 12/5/08), and that, says Her Majesty’s Inspectorate of Constabulary for Scotland in its 2008 report, excludes the cost of tax evasion. This, along with many other forms of fraud, is extremely difficult to estimate, and the report accepts that the real extent of fraud is impossible to assess. What is certain is that Governments have far fewer resources at their disposal as a result of the many and varied tax evasion schemes of wealthy individuals and corporations for whom avoiding taxes is good business practice. The Scottish economy, like any other, is also vulnerable to global trends and spectacular company frauds, like that of Enron, have a rippling effect and reduce the legitimacy of business and finance. It is also notable that United States agencies are investigating the criminal aspects of the current ‘credit crunch’ (Herald 25/06/08). Other major losers from fraud include the National Health Service, which loses at least 1 per cent of its annual budget to fraud – a situation prompting the Scottish Government to proclaim a policy of zero tolerance. While fraud in this area is often associated with ‘scroungers’ and patients falsely claiming free prescriptions, professional groups are also involved. Examples reported include dentists claiming to have used precious instead of non-precious metals in fillings and falsifying claims for NHS work; opticians claiming for more expensive lenses than have either been needed or supplied; pharmacists claiming for expensive brand name drugs when cheaper alternatives have actually been dispensed, and GPs, who have prescribed these drugs and been found to have had ‘inappropriate’ relationships with representatives of pharmaceutical companies (Sunday Herald 26/01/08).

Corporate activities have also been associated with deaths, injuries and diseases, documented in a recent book by criminologists Steve Tombs and Dave Whyte (Tombs and Whyte 2007, Safety Crime, Willan Publishing). Deaths alone easily exceed those attributed to homicide. Scottish examples are all too well known. They include the deaths of 21 old age pensioners in Wishaw in 1997 following the failure, on the part of the butcher, John Barr to follow routine food preparation procedures; the death, in 1999, of the Findlay family in Wishaw in a gas explosion caused by the failure of TRANSCO to maintain supply pipes, and the death of six workers in the Stockline explosion in May 2004, again caused by a failure to check gas safety. 2008 saw the twentieth anniversary of the 167 deaths aboard the rig Piper Alpha, amidst reports that despite many subsequent changes, there is still much to be done to make oil rigs safe, a grim reminder of which was the death of two workers at the North Sea Brent Bravo platform in September 2003. To this high toll must be added the individual deaths which far less often receive headline publicity, and countless injuries, stress and occupationally caused diseases in the workplace. Consumers can also be injured and made ill as a result of contaminated food, dangerous toys, about which warnings abound at Christmas, inadequately regulated chemicals in household cleaners, toiletries and cosmetics, and the as yet unknown long term consequences of additives in food.

Environmental crime is also a major problem, and its impact includes the death of wildlife from illegal emissions of chemicals and farm slurry, the contamination of drinking water, sea water and beaches and its effects on the volume of damaging emissions. Scottish Water has been described as Scotland’s ‘most frequently prosecuted environmental criminal’ having amassed 16 prosecutions in just over three years. And these, argue Friends of the Earth, are merely the ‘tip of the iceberg’ (Sunday Herald 9/02/08). In addition the Scottish Government itself faces legal proceedings from the EU in respect of this and other matters including conservation, the quality of beaches and failures to meet pollution targets (Observer 4/05/08).

In addition, a whole host of questionable corporate activities affect us daily including bargain offers which aren’t bargains, meat and food which contain higher than permitted amounts of water and additives, and misleading advertisements. These very often lie on a fine line between honesty and dishonesty, legality and illegality. Phrases such as ‘healthy’, ‘traditional’, ‘low fat’ or ‘organic’ are often abused and pictorial images of foods often give a false impression of the size of portions or the origins of the food. Power companies have been notorious for ‘aggressive marketing’ on the part of sales representatives on the doorstep, persuading consumers to change their supplier on the promise, later unfulfilled, of large savings. The unsolicited phone calls which many companies now make, again promising savings, can be seen as intrusive and as examples of what could well be called anti-social business behaviour.

Many of these activities, including the most serious, are not, of course, widely or popularly represented as ‘crime’. Incidents which cause single or mass deaths are routinely presented as ‘accidents’, a description which, by implying inevitability and the operation of chance, all too often conceal a long history and indeed a culture of neglecting regulations. Phrases such as ‘misselling’ or ‘wrongdoing’ are often used to describe what are, in effect, fraudulent or corrupt practices. Victims may not be in a position to detect offences and, even when harm is done, very often do not report them as crime. A large number of offences, therefore, are not fully investigated, not prosecuted and, as will be seen below, leniently sentenced. Many are not the province of the police but a host of enforcement agencies such as the Health and Safety Executive, Environmental or Trading Standards Officers, who suffer from declining resources and very often prefer to issue warnings or advice rather than recommend prosecution. The Piper Alpha case was never prosecuted despite evidence of breaches of regulations.

Fines are the most widely used sentence but are often seen as far too small. Most recently, two companies responsible for the death of a baker in Maryhill who was hit by a faulty tail-lift were fined £33, 500 (BBC News Scotland 5/11/07), and a consultation paper for a proposed Bill on equity fines cites the average fine for offences related to injuries or deaths of employees between 2001 and 2005 in Scotland as £17,482 ( www.scottish.parliament.uk/s3/bills/MembersBills/pdfs/CriminalSentencing… ). This follows considerable criticism of, for example, the total fine of £200,000 fine given to Stockline in 2007, widely reported as amounting to a mere £44,000 per life (Scotsman 29/08/07). Even the £15 million fine given to TRANSCO, while hailed as a ‘record’ UK fine, could be criticised as amounting to a mere four per cent of the company’s profit. In these cases, victims and their relatives often complain about a lack of justice.

In part this reflects the use of regulatory legislation such as the Health and Safety at Work Act, widely associated with lower fines. For cases resulting in death, an alternative avenue is to prosecute for corporate homicide or corporate killing, which, however, is notoriously difficult to do, due to the legal requirement that a company can only be prosecuted if an individual director can also be identified as culpable – a test which is increasingly irrelevant given the size and complexity of corporate decisions. Many jurisdictions, including Scotland, have recently reviewed this legislation, and an expert group made several recommendations ( www.scotland.gov.uk/Publications/2005/11/14133559/35592 ). In the event however, the then Scottish Executive decided, controversially, that this was a reserved matter and the new Corporate Manslaughter and Homicide Act 2007 covers the whole of the UK. This Act, while containing some improvements, did not go so far as the expert group had recommended in moving away from the doctrine of identification, does not include provisions for the prosecution of individual managers and did not at the time consider sanctions. These, amongst other issues, have been the subject of calls, by the STUC and other groups, for new legislation for Scotland, and indeed, Cathy Jamieson, Minister of Justice at the time of the rejection of Scottish legislation is now said to support it (Herald 21/08/08). At the same time, members of the current government, who supported legislation while in opposition, appear reluctant to re-open the issue.

The issue of sentences continues to be debated. Monetary penalties are generally regarded as too small and other jurisdictions have introduced a wider range of innovative measures. These include, for example, requirements to name and shame companies, provisions for corporate probation and corporate community service, under which the resources and knowledge of corporations can be used to the advantage of victims and the community, thus providing elements of restorative justice. These, also recommended by the Expert Group, have attracted widespread support and it is not yet clear if the (albeit limited) range of penalties envisaged for England and Wales will be introduced in Scotland. These include proposals to increase monetary penalties by relating fines to a company’s turnover, and the recent consultation paper, referred to above, proposes the introduction, in Scotland, of equity fines, related to the overall value of the company. In addition, this paper, which ensures that the issue of sentences remains on the political agenda, also proposes to introduce company background inquiry reports, necessary for courts to establish accurate information about the company’s finances and their history of compliance. These proposals are limited, however, to monetary penalties and relate only to serious offences. For other offences, The Regulatory Enforcement and Sanctions Act of 2008, which encompasses a very wide range of regulatory areas, does include the possibility of equivalents to probation or community service orders, but so far these are only seen as civil, not criminal, sanctions.

This reflects the trend, across many areas, to secure ‘better regulation’ by reducing the amount of ‘burdensome’ regulations. Indeed the proposals in the Regulatory Enforcement and Sanctions Act are based on the assumption that the criminal law is over, rather than under-used against businesses. Despite this however, it can be argued that there is considerable scope for the Scottish Government to consider new and innovative proposals for both legislation and sentencing which might go some way towards meeting victims’ complaints and recognising the significance and harm associated with white collar and corporate crime.

Hazel Croall is Professor of Criminology at Glasgow Caledonian University and served as a member of the Scottish Executive Expert Group on Corporate Homicide.