Welcome back to the Conglomerate Junior Scholars Workshop. Our paper today is Insuring Corporate Crime by Miriam Baer. Miriam is an Acting Assistant Professor in NYU's Lawyering Program. She also is well-acquainted with her topic; Miriam was an assistant U.S. attorney in the Southern District of New York from 1999 to 2004. Our commentators today are also experts on this topic: Sean Griffith, Kim Krawiec and former workshop participant and commentator Mike Guttentag. I will post the comments of these experts below this post. We invite readers to comment on the paper (and the comments) in the comments section of this post. In the interest of running this workshop like a physical world conference, no anonymous commenters, please.
The abstract for the paper is here:
Corporate criminal liability has become an important and much-talked about topic. This Article argues that entity-based liability - particularly the manner in which it is currently applied by the federal government - creates social costs in excess of its benefits. To help companies better deter employee crime, the Article suggests the abolition of entity-wide criminal liability, and in its place, the adoption of an insurance system, whereby carriers would examine corporate compliance programs, estimate the risk that a corporation's employees would commit crimes, and then charge companies for insuring those risks. The insurance would cover the entity's civil penalties associated with its employees' criminal conduct. Entities that successfully procured insurance would no longer be subject to entity-wide criminal liability. Part I begins with a discussion of corporate criminal liability and the costs that accrue from the manner in which it has been implemented by the Department of Justice. Part II examines several proposals to reform corporate criminal liability and explains why they are inadequate. Part III lays out the proposal for an insurance system in lieu of entity-based criminal liability and explains, in rough form, how corporate entities might contract for insurance, how claims might be filed and how damages might be measured. Part III also addresses a number of arguments that others might raise against the proposal.
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