Criminal law and markets

2019-present

Researcher: Lindsay Farmer

This project is funded by a three year Major Research Fellowship from the Leverhulme Trust.

There has been a profound shift in the relationship between markets and criminal law. From markets being seen as essentially self-regulating and beyond the proper scope of the criminal law, there has been a move towards seeing criminal law as central to the constitution and maintenance of the proper functioning of markets. However, this shift, and its significance, has not been recognised by criminal lawyers, as ‘market crimes’ are still not seen as a core part of the criminal law.

The existence of this shift is demonstrated by developments in national, transnational and supranational legal systems which have steadily increased the criminalisation of particular market practices and financial or economic behaviour since the 1980s (Harrison & Ryder 2016). In addition, the conduct of bankers and managers of financial institutions has been identified as one of the major causes of the global financial crisis of 2008, intensifying calls to criminalise and punish forms of financial misconduct to secure the operation of financial markets. Underlying this growth in criminal legislation are changes in the way the law is used. It is no longer just the ‘rogue trader’ or the ‘bad apple’, that is to say, the unsocialised person in an otherwise ordered environment, who is seen as the problem. Rather, financial institutions and market relations are themselves increasingly seen as criminogenic, corrosive of social relations and incentivising opportunistic criminal conduct (Platt 2015).

This is the view not simply of anti-capitalist scholars and activists, but of market advocates and even Nobel-winning economists (see Akerloff & Shiller 2015). This suggests that there has been a profound shift in the relationship between markets and criminal law.

Notwithstanding this shift in the way the law is used, and the increasing urgency and frequency of calls to criminalise financial misconduct, criminal law writers and theorists have failed to engage in any systematic way with ‘market crimes’, to reflect on their place in the criminal law, or even properly to address the justifiability and appropriateness of criminalisation as a response. These crimes continue to be seen as primarily ‘regulatory’ and not a core part of the criminal law. The principal objective of this research project is thus to deepen our understanding of this shift in the relationships between markets and the criminal law, and its implications for our understanding of the criminal law and its role in regulating economic conduct. This requires both a systematic rethinking of the place of the market within the criminal law and the rethinking criminal law theory in a way which acknowledges the place of the market in the development of the criminal law. In order to achieve this objective, it is necessary to address a further set of questions.

  • What have been the key developments in financial/market crime prosecution over the modern period, and what underlying patterns and shifts do they reveal?
  • How has the relationship between criminal law and markets been addressed and understood in case law and legal literature over the course of the modern period?
  • What would be the implications for criminal law theory of giving the market a more central place in our understanding of the criminal law?
  • And finally, when (if at all) is it appropriate to use the criminal law to regulate markets, and what sorts of financial or economic conduct can justifiably be criminalised? (This is the central normative question that the project aims to address.)