The reason why large corporate fines don’t work, is because the legal cost to fight them is a fraction of a potential fine halving the amount or the delayed payment value for decades that decreases its real cost.
Simply put, larger and larger fines do not work to prevent or disincentivise behaviours that in the current system are punished by court settled damages and fines. The cost to fight damages legally is far far smaller than the likely savings by fighting. (E.g a $5B fine can become $2.5B with a 20 year delay on payment, with legal costs far below that).
Why does this matter, it’s means there is a practical cap on how large fines can effectively become and we’ve hit it. It means that legal costs are much much smaller than the cost to not fight large fines - effectively making the original fines worth far far less than intended - and hence the actual punishment far far less significant.
We will need another mechanism to replace or augment fines if we actually intend to have a mechanism to punish bad actors (corporations). Fines alone are broken. Limiting ability to sell product, criminal liability, forced company shutdowns/split-ups/receiverships, etc are all possible extensions. I don’t have an opinion on best approaches as yet.
wakoinc / Blake
npub1ktw…mrvj
2023-07-19 14:56:57
Author Public Key
npub1ktw5qzt7f5ztrft0kwm9lsw34tef9xknplvy936ddzuepp6yf9dsjrmrvjPublished at
2023-07-19 14:56:57Event JSON
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"content": "The reason why large corporate fines don’t work, is because the legal cost to fight them is a fraction of a potential fine halving the amount or the delayed payment value for decades that decreases its real cost. \n\nSimply put, larger and larger fines do not work to prevent or disincentivise behaviours that in the current system are punished by court settled damages and fines. The cost to fight damages legally is far far smaller than the likely savings by fighting. (E.g a $5B fine can become $2.5B with a 20 year delay on payment, with legal costs far below that). \n\nWhy does this matter, it’s means there is a practical cap on how large fines can effectively become and we’ve hit it. It means that legal costs are much much smaller than the cost to not fight large fines - effectively making the original fines worth far far less than intended - and hence the actual punishment far far less significant.\n\nWe will need another mechanism to replace or augment fines if we actually intend to have a mechanism to punish bad actors (corporations). Fines alone are broken. Limiting ability to sell product, criminal liability, forced company shutdowns/split-ups/receiverships, etc are all possible extensions. I don’t have an opinion on best approaches as yet.",
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