By Steven Zindel, Senior Partner
As a practising lawyer, an irony which I perceive daily is the prominence given to street crime while deeper unethical behaviour, often with far greater consequences for people, goes
unreported. The perpetrators are not held accountable.
Sad, lonely people are processed through our criminal justice system and ultimately many are imprisoned. Prisons are creaking at the seams. It costs the country more and more. The crowded colleges of crime produce more brutal and banal cycles of offending from their graduates, who are actually crying out to belong, while treatment programmes for those with health issues (including addictions) remain underfunded. Many of our prisoners would have been mental health patients in previous times. There are often unintended and harsh consequences of imprisoning decent people. Prisons should be a last resort, reserved for the violent or truly incorrigible. The number of prisoners should be kept low for their own protection and to aid their rehabilitation.
Also, many crimes are the result of overcharging or failing to use legitimate police discretion with convictions being recorded against people where none of the protagonists (e.g. in the domestic violence field) want things to go that far, provided that the behaviour is corrected. Many suspects cooperate fully with the police to explain the particular context for their behaviour and find the negative parts of their statements simply used against them on a remorseless prosecution treadmill, while the more experienced offenders stay staunch and are let off through absence of witnesses. What kind of example does this set?
Meanwhile, we, the public, read lurid details of nasty crimes in the newspapers and imagine that society is going to the pack. Something of a moral panic sets in. It’s easy news and it’s good for circulation. The drama of it all mirrors the entertainment value that crime has always provided.
Youngsters being left to themselves and our unhealthy binge culture undoubtedly have led to a number of derailments. But the criminals are also alive to hypocrisy and mixed messages. We emphasise material possessions and getting “out of it” to de-stress from it all. Life seems to be a competitive exercise, about making your pile at someone else’s expense. The behaviour of some fellow citizens makes weak minded others think that they too should make their own unsophisticated attempt to secure the good life.
I have in mind how individuals may amass wealth and empty houses without paying much in the way of tax through excess business deductions, paper-loss making vehicles and the improper use of companies and family trusts. In an uncertain world, trusts are favoured as a means of providing security for assets but they may bear little relation to the reality. For the 167,922 dwellings at 7 March 2006, disclosed in the last census to be owned by family trusts, for example, frequently the beneficiaries regard themselves as the owners and the independence of the trustees is doubtful.
Another area of unethical and damaging behaviour is that of relationship property. For originally laudable social policy objectives, the law has, since the 1970s, provided for generally equal sharing of relationship assets for marriages and, now, de facto couples. To counter that, there has been an explosion in the growth of family trusts and prenuptial agreements so that often on separation, even after many years together and children, one spouse (typically with the child-care responsibilities) will be left high and dry. That is not regarded as theft, like the public charge facing a shoplifter, but it ultimately has more potential to be ruinous of the social fabric.
As indicated, the cynical or the prepared will have their assets sheltered. The true romantic who pledges all his worldly goods and troth may lose half his assets after only three years. I would argue that it is better to provide for an incremental improvement in the non owning spouse’s position to the point where, after 10 years together or children, she obtains half of the property irrespective of any agreement. This still leaves the vexed problem of the family trust where assets are owned by third parties, the trustees. There should be greater trust busting powers so that substance may triumph over form. A trust could be legislatively rewritten for where do property rights end and improper exploitation begin?
Companies, also leave unsecured creditors out of pocket when the company folds, while the director continues to drive around in his trust owned European car. This promotes distrust at the system among honest suppliers and, again, where is the moral example? What is the difference between calculated structures to leave the unsecured out of pocket and theft? The intentions are not so immediate for the civil wrongdoer as for someone who makes off with somebody else’s cash from their wallet but the business person who repeatedly sets up structures knowing that in the event of failure it will be somebody else’s problem may arguably show a form of moral as well as legal bankruptcy. And with the new insolvency procedure, where is the example in allowing a person simply to write off $40,000 of debts? Even ordinary bankruptcy attracts little stigma. The public notices section advertising of bankruptcy has been replaced by a website listing.
Why do the Court pages in our newspapers report on all the “rats and mice” offending so thoroughly when bankruptcy stories may also have numerous out of pocket victims? These victims don’t receive reparation orders. Many of these bankrupts are themselves, it is true, susceptible to relentless credit advertising, a culture of paying on the “never, never” and their own weak natures, just as the criminals caught by the police are victims of currents swirling around them. Sometimes, they are the same people.
The law reports are full of examples of what is variously called “equitable fraud” or “unconscionability” where superior acumen, intelligence or economic advantage are used to dupe the less powerful. The playing field is far from level. We value the sanctity of contracts and economic independence but many in our society can’t cope with the individualistic model and they fall by the way-side. It is a perverse kind of social control that keeps these weak people in check while richer and more powerful people escape the moral chaos which their own actions have unleashed. The kind of behaviour committed by the clever is not characterised as crime, not even white collar crime, but there may be little distinguishing the essential behaviour. Why are such sharp practices tolerated and unreported? Is it too difficult to explain? Without a prison sentence and a simple story of intentional greed immediately acted upon, does a case have no impact?
Widen the critical lens further and there is an obvious need to remedy environmental degradation and international breaches of order through wars or improper diversion of resources (e.g. subsidies ruining local farming or the current bio-fuel debate). The fundamental crime is that we are not all getting together to help the world’s hungry and homeless or to make sufficient effort to limit our population and over industrialisation, so that we may survive on a sustainable planet. By comparison, the affairs of the criminal classes seem petty and overrepresented in our daily news.