Corporate ASBOs

Public outrage at bad behaviour by huge corporations triggered no action from government. There is indeed no civil or criminal sanction available to respond to tax avoidance by the big name brands or the venal mis-selling of insurance premiums. Somehow public opprobrium should be exercised in a way that prevents the companies from continuing their behaviour and imposes some sort of penance.

There is a huge imbalance in the way that individual citizens are subjected to the full force of the law for low level anti-social behaviour which, in the scheme of things, causes only minor upset to a few people, whereas corporate tax avoidance has massive national implications. Contrast a child playing his music too loudly and too often that annoys the neighbours to Starbucks which announced today that it has no tax obligation this year. The effect on the public services and on the social fabric of so many of the biggest companies managing by sleight of hand to avoid paying billions of tax is incalculable.

So, I would like government to think about introducing a corporate anti-social behaviour order. ASBOs are in the process of being replaced by various other civil orders by the government but for the sake of simplicity, I shall call my proposal the corporate ASBO. The important point is that individuals and big corporations should be equal before the law.

The last Labour government introduced the Serious Crime Prevention Order but this focuses on the more serious end of corporate crime, applying to individuals who have already been convicted of crimes such as money laundering or credit card fraud.

The corporate ASBO could be handed to registered companies engaged in anti-social behaviour. An appropriate threshold, in line with orders pertaining to individuals, would be required to ensure the ASBO is not used in a vexatious manner. The ASBO would be targeted at corporate actions that are deliberately socially harmful, cause distress or nuisance or annoyance. It would not target legitimate business, even business that some might see as unpalatable (for example pay-day loans or betting shops). The purpose of the ASBO would be preventative – identifying low-level behaviour and seeking to prevent it increasing in frequency or seriousness.

As with an individual order, there could be pre-sanction stages that could be agreed such as an acceptable behaviour contract (ABC).

The ASBO would move matters to the public stage if the behaviour is seen as particularly damaging, is of intense public concern or if the company has reneged on the ABC.

What behaviour would attract a corporate ASBO?

  • Aggressive tax avoidance
  • Avoidance of international legal obligations, e.g. zero hours contracts
  • Paying below the minimum wage
  • Mis-selling of products, such as the banks and Payment Protection Insurance
  • Public display of distressing materials.

What sanctions would the corporate ASBO involve?

  • Unlimited fines
  • Public display in order to ‘name and shame’: similar to putting the faces of individuals on a poster, companies would be required to place this notice on their websites and in shop windows
  • Company directors could be summoned to court to be castigated for their behaviour.

What would the penalty be for breaching a corporate ASBO?

In line with the proposals for injunctions dealing with nuisance and disorder under the Bill, the corporate ASBO would be a purely civil order. Breach would be regarded as contempt of court. Company directors could be held personally in contempt, where the maximum penalty is two years’ imprisonment.

Who could bring a corporate ASBO?

The current legislation specifies the authorities who can apply to the courts for injunctions. These are:

a)         A local authority

b)         A housing provider

c)         The chief officer of police for a police area

d)         The chief constable of the British Transport Police Force

e)         Transport for London

f)          The Environment Agency

g)         The Secretary of State exercising security management functions the meaning given by section 195 (3) of the National Health Service Act 2006, or the Welsh Ministers exercising corresponding functions, or a Special Health Authority exercising corresponding functions, or a Special Health Authority exercising any such functions on the direction of the Secretary of State or the Welsh Ministers,

h)        A headteacher, or

i)          A principal of an FE institution.

Authorities to be added to this list with corporate anti-social behaviour in mind would be:

  • The Children’s Commissioners for England and Wales
  • The Equality and Human Rights Commission.

Consideration could also be given to allowing individuals to refer companies to the Attorney General who could review the evidence and take action.  Another suggestion might be that a petition on the Number 10 website that gathered more than 100,000 signatures could trigger a corporate ASBO.

It just seems to be grossly unfair that the level of misbehaviour that is tolerated by individuals and particularly by children is so low that it triggers civil intervention leading to criminal proceedings and even custody, whereas anti-social behaviour that is an assault on the very fabric of the nation by corporations doesn’t even get a slap on the wrist.

November 15, 2013 · Frances Crook · 4 Comments
Tags:  · Posted in: anti-social behaviour

4 Responses

  1. Phil Edwards - November 28, 2013

    Not sure what to make of this. According to a fair chunk of the literature, the post-1998 system for dealing with ASB (and with youth offending) has positive features which mirror the regulatory pyramid of approaches used in business. IOW, you start with agreed improvements (or an ABC), escalate where necessary to demanding improvements (or imposing an ASBO), and only in the minority of cases where that second round of regulatory interactions fails do you prosecute.

    The high breach rate of ASBOs & the rapid escalation to criminal sanctions are not only distortions of the system itself, orienting it less towards reducing ASB than towards fast-tracking disorderly individuals into the criminal justice system; more importantly, they’re also departures from the regulatory model. A more coherently regulatory model would govern disorderly behaviour primarily by consent, with minimal use of prosecution and minimal stigmatisation, in just the way that business regulation manages businesses mainly by consent.

    Viewed in this light, you’re essentially suggesting re-importing into business the faults which the regulatory model picked up when it was applied to ASB. If anyone’s going to be stigmatised or subjected to ‘unlimited’ penalties, of course, I’d rather it was somebody who’d actually done a few people some harm, but I can’t help feeling that we’d be better employed building a society with less stigma overall than redistributing the stigma to more deserving recipients.

  2. Soarer - November 30, 2013

    I am afraid you have fallen for the rhetoric on corporate taxation. I am sure you hate it when rhetoric about ‘Prison Works’ is used, for example, by people outside your organisation who have no knowledge, experience or expertise in your area of operations. So, with this.

    To make it simple – companies pay corporation tax on profit, not turnover. Starbucks made no profit, so it pays no corporation tax.

    Margaret Hodge knows this, as her family company has a large turnover but small profits, so pays little tax. It is a pity she doesn’t make it clearer in her role as a Select Committee chair.

    None of the bodies you mention have any experience of business. I am sure you would not want Transport for London, for example, deciding prison policy. What makes you think Children’s Commissioners would be good at pronouncing on business activities?

  3. Adrian - November 30, 2013

    Have you really thought this through?

    An ASBO for tax avoidance?

    Tax avoidance is entirely legal, and therefore no court can or should impose any kind of sanction on any legal activity.

    The illegal activity is tax evasion. There are already legal sanctions for these. Whether you think they are severe enough is a matter for your opinion. Convictions are a matter of public record so newspapers can disclose them freely. However, they don’t presumably because their readers aren’t that interested.

    Now tax avoidance may not be to your moral sensitivities. But that is irrelevant on the question of how the law ought to get involved.

    Please count me as an opponent of your suggestions. Truly awful stuff.

  4. Bill Smith - December 11, 2013

    I agree with 2 and 3 above. And for your to suggest that ASB causes “minor upset” is offensively wrong. Ask Fiona Pilkington’s family. Stick to issues you know about, which, having read much of your work, is neither prisons nor ASB. Misguided drivel.

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