All Equal in the Eyes of the Law (except Barclays)

It is a long standing principle that we are all equal in the eyes of the law. However, this principle has been forgotten in recent years, as successive governments have sought to be friendly to business, without making the distinction between freedom of enterprise, and the commission of criminal acts.

Government created Ombudsmen to rule on disputes of mis-selling, in order to make a faster, fairer system. So the mis-selling of “interest rate insurance” doesn’t have to come before the courts in order for the situation to be rectified. In fact, Barclays bank have co-operated and made admissions, which they are encouraged to do in the hope of avoiding criminal charges. If they were to be prosecuted now, then they would argue that it is an abuse of process.

So the advantage of the Ombudsmen is that business tends to cooperate and the matter can be settled quickly. The disadvantage of the Ombudsmen is that they are not feared. They do not provide the chill wind of disincentive. Since they were created in the 80s we have seen one financial scandal after another, partly as a result of their existence.

In the case of Jimmy Carr, he rebadged his income as a loan to avoid tax. It’s not a question of whether this is fraud; of course it is. But the Labour government created a system whereby accountants who dream up loop-holes are encouraged to register the loop-hole so that government can close it down. In return they won’t be prosecuted. The net result is that these accountants can advise their clients that there is no fear of prosecution because the scheme has been registered. So everyone piles in.

The Ombudsmen can recommend prosecution where dishonesty is provable but they rarely do, because successive governments have believed that companies must be free of the fear of prosecution in order to be free to be enterprising. This policy emerged under Thatcher, but remained during the Blair government, when Labour was keen to be pro-business. It is the dysfunctional aspect of the Anglo-Saxon freedom.

These principles have created a situation where we are not all equal in the eyes of the law. We live in a world where an employee of a major company can spend his day dishonestly selling worthless insurance or worthless pensions, and if caught, the employee and his manager receive no punishment at all, while the company receives only a fine. Meanwhile if a drug addict steals a chicken from Sainsbury’s, he is arrested and put before the magistrate to be punished as a criminal.

A thief is a thief. The only difference between these two cases is that the drug addict has an excuse. Let’s look at the criminal record of this drug addict. He has never been arrested until the age of 28, then shoplifting, shoplifting, shoplifting. He was never a criminal until he became addicted, and this lessens his culpability. Meanwhile the company is filled with educated people, unlimited legal guidance, board meetings deciding considered policy, yet they go on to do massive systematic fraud. They are more than culpable. Yet one will be prosecuted and the other will not. The de-facto rule has been that we are not all equal in the eyes of the law.

If the bank employees were arrested and brought before the court, same as the man who stole the chicken, then it’s a fair bet that this kind of thing would no longer happen. Fear of consequences would put an immediate stop to it. This does not require new laws, just a change in public policy.

This is where journalists get confused about the law. Journalists think that if a law exists then it has to be prosecuted, if it is breached. In fact there are thousands of laws out there, gathering dust on the statute books. It’s not whether a law exists but whether public policy enforces it, in the particular circumstance.

So journalists shouldn’t question whether it is against the law to dishonestly sell useless products to consumers. Of course it’s against the law. It’s a criminal act. The question is whether the law is enforced by public policy. Is it arrestable?

The same standards expected of the man in the street, should also be expected the man in the workplace. If police were marching into city offices and arresting people, you’d soon find that the Ombudsman are twiddling their fingers in boredom, due to the lack of complaints coming to them.

The fact is that companies do not accidentally commit fraud on a massive scale. They are perfectly aware of what they are doing. The only reason they have continued to behave so badly for so long is because they have been allowed to do so. Policy has placed them above the law and they have responded in the only way that can be expected of them.

It’s not the law that must change but the policy. From now on we should all be equal in the eyes of the law.

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