Caselaw

Criminal Case (Tel Aviv) 59453-07-19 State of Israel v. Avi Motula - part 32

July 22, 2020
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"In my view, the task of designing the appropriate punishment mechanisms for corporations in the framework of criminal law should be left to the legislature, since these are moral decisions regarding the proper approach to punishing corporations, and this involves significant operational and budgetary aspects.  These decisions require an orderly policy formulation process, in which all considerations and needs will be taken into account, including the issue of the resources needed to diversify the alternatives to punishment in relation to corporations.  'Judicial legislation' is not the proper way to go in this case."

The Honorable President Grunis further noted that as part of the proceeding, the court was informed (in 2015) that "according to the state, a committee is currently sitting on the bench to examine the issue of punishing corporations" (ibid.).  In a minority opinion (the Honorable Justice Elyakim Rubinstein and the Honorable Justice Yoram Danziger) it was ruled that there is no impediment to imposing on such a corporation a probation order or a service order for the benefit of the public by way of interpretation.

Therefore, today, the only punishment that can be imposed on a corporation is a fine.  However, from the point of view of punitive policy, the criminal conviction itself and the social condemnation that derives from it are also important in the case of a corporation (however, see State Attorney's Directive 1.14 regarding punishing corporations)

Kremnitzer and Ghanaim, the responsibility of the corporation, insist on the condemnation of the conviction (at p. 78):

"... Criminal law deals with serious anti-social phenomena.  A significant part of the punitive sanction is the condemnation of the conviction itself.  Condemnation is a major and important component of deterrence.  Condemning a corporation for an act of transgressions, especially serious ones, means imposing anti-social stigma on it, denouncing it, and harming its social dignity and reputation.  These constitute significant, and sometimes severe, damage to the corporation, its ability to operate and its revenues.  The threat of imposing criminal liability on a corporation is a threat of existential significance.

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