Vicarious Liability and Crime Within Business

The four major categories of crime in the business world include,

• white collar crime 
• organised crime 
• computer crime 
• regulatory offences (Australian Business Law, 2014)

These offences are conducted with the intention of financial gain and usually involve large amounts of money (Australian Business Law, 2014). Fraud and theft are characteristics of this type of crime and results in economic loss for the business and investors (Farlax Inc, 2016)

Vicarious liability was introduced into the Corporations Act 2001 (Cth) through the Statutes Law Amendment (Director's Liability) Act 2013; it was introduced to try and combat the above mentioned crimes within business. This amendment made it an offence if directors or others are personally involved in the commission of the offence or have aided, abetted, counselled or procured its commission by the corporation (Van Akkeren, J., 2016). Basically, if the fraud or theft has occurred against the company during the employee's recruitment by that company, management or directors of that company are liable. This law is important to avoid management 'looking the other way' or even worse, getting involved in a fraud. With this, they are personally liable, even if they had no idea of the fraud, they are forced to stay accountable. I would recommend to management and directors to implement a strict policy regarding fraud and theft and ensure the company's culture on fraud is not lax and is strictly enforced if a situation did occur. 

References:

Australian Business Law (33rd ed.). (2014). Retrieved from http://intelliconnect.wkasiapacific.com/scion/secure/ctx_TRUE/index.jsp?1461234193445=&uAppCtx=RWI&cpid=WKAP-TAL-IC&is_citator=false&link_type=1&document_id=abl14Uio456843sl13163899&cfu=WKAP#page[3]

Farlax, Inc. (2016). White Collar Crime. Retrieved from http://legal-dictionary.thefreedictionary.com/Business+Crime

Van Akkeren, J. (2016) AYB115 Governance, Fraud and Investigation: Week 5 [Lecture Notes]. Retrieved from https://blackboard.qut.edu.au/bbcswebdav/pid-6282895-dt-content-rid-5915486_1/xid-5915486_1