Business decisions and criminal law
The ever-increasing ubiquity of criminal law in business life is readily apparent just by turning on the television or reading a newspaper, filled with reports every day of the week on court decisions (most of them convictions), statements by entrepreneurs as defendants and police raids ending in numerous arrests.
There are a number of reasons for this phenomenon, such as the progressively tougher approach taken by criminal law to economic crimes, the (increasing) effectiveness of investigations into this type of offense and the inclusion in criminal legislation of conduct which was hitherto not considered to be criminal in nature.
Furthermore, as if the above were not enough, it has been possible – since the end of 2010 – for companies to be held criminally liable for certain offenses committed by their directors and employees, attracting very heavy penalties (such as extremely high fines or the winding-up of the company).
Against this background, traders have to place paramount importance on the criminal risks they may face in the day-to-day management of their companies. As exaggerated as it may seem, many of the daily decisions taken by entrepreneurs and managing bodies entail criminal risks which, were they to materialize, could result in the company being embroiled in a criminal investigation.
There are a number of general recommendations which should be borne in mind in order to minimize a company’s exposure to criminal risks. These include, but are not limited to, the following:
- Exercise care when taking business decisions, which requires an awareness of the criminal contingencies within organizations;
- Avoid ‘cheat shortcuts’, namely actions which might entail time or financial savings but which expose the company to significant risk; and
- Seek proper expert advice which will help clarify the consequences of the decisions taken.
Among many other aspects of corporate life, taxation, occupational risk prevention, corporate transactions carried out by companies in financial distress and the way in which companies interact with the authorities and public officials must be carefully examined and studied in day-to-day decision-making to avoid possible criminal contingencies.
Accordingly, in order to keep criminal risks at bay, traders must ensure that their senior and mid-level managers properly evaluate their decisions from the standpoint of criminal risk: it’s not only about avoiding a possible court decision, but also the tedious process of judicial investigation.
Departamento de Litigación y Arbitraje de Garrigues