On television court room dramas, it’s often satisfying to see the “good guys” (prosecutors) prevail by winning a guilty verdict in trials involving big businesses. But while it may sound like an oxymoron, it can sometimes be in a prosecutor’s best interest to negotiate an alternative to a guilty verdict. Good examples of such scenarios would be what are known as “victimless”, “white collar”, or corporate crimes.
In fact, in many corporate crime cases employing deferred or negotiated settlements are the preferred way of seeking resolution. In a recent article, Sean Hecker of Debevoise & Plimpton answered questions about corporate settlements. After all, it’s not as though the corporate wrongdoers aren’t paying for their misdeeds. They are in fact literally paying for them when seeking settlements. But in addition to sparing parties the time and expense of a courtroom trial, successfully negotiated corporate settlement protect innocent third parties as well. This includes shareholders, employees, and the general public, all of whom could be affected by the possible shuttering of a company in the aftermath of convictions.
And protecting innocent bystanders isn’t the only consideration when contemplating corporate criminal prosecution. It’s nothing for television lawyers to put shady businesspeople behind bars in under fifty minutes. Their real life counterparts however face a great deal more courtroom time. The odds of prosecutors actually prevailing in a corporate case before a jury are good. But because of all the delays and attempts to keep this type of trial from happening at all staged by corporate attorneys, prosecutors should be selective about the ones that they think merit criminal prosecution.
Prosecutors were able to achieve criminal convictions of executives in the notorious Tyco International and Enron Corporation trials. But there is still some debate as to if the guiltiest were punished and justice was actually served. Meanwhile, thousands of lives were destroyed in the fallout from the collapse of these companies. And legal experts warn that more aggressive criminal prosecution will probably lead to an increase in declinations and non-compliance on the part of corporations.
So these experts caution that as viscerally satisfying as it might be for either party to prevail in a corporate criminal case, settlements should continue to be the common method for resolving them. Such settlements allow corporations to avoid permanent damage and remain in business. And prosecutors can be assured of good faith efforts by corporations to weed out “bad apples”, and remove climates that lead to charges being issued in the first place.