No-Fault Regime Is Than a Negligence Rule

No-Fault Regime Is Than a Negligence Rule

The medico-legal circles have been replete with calls to replace the Negligence Based system for compensation for medical errors with the no-fault. In the current negligence-based system, a health professional faces liability for breach of the duty of care. However, it is the patient’s onus to prove the doctor’s negligence in court when pursuing damages for negligence.  According to Bismark and Paterson (2006), the negligence-based system is a slow, costly, inefficient, stressful, and unreliable for seeking compensation when a person suffers harm through medical negligence.  Cohen and LaFlam,  (2007) contend that a negligence-based system promotes inequities since a person who has agonized an injury may fail to get compensation because he cannot identify the doctor responsibly or meet the onus of proving the doctor’s negligence in a court of law. This paper argues that the no-fault compensation system is better than the negligence-based system since it promises a simpler, fairer, effective, and less grueling means for seeking compensation while promoting a healthcare environment characterized by reduced medical errors.  This paper will explore the need to shift to a no-fault compensation system in the USA healthcare system. The paper will look at the weaknesses of the negligence-based compensation system and relate this to the benefits accrued through the no-fault system.

 Doctors in their profession are imposed with the duty of care whereby, they are supposed to exercise reasonable care and skill in diagnosis, advice and treatment of their patients.  Use of the negligence-based compensation system is intended to ensure doctors observe the highest standards of care and that patients are compensated for injuries suffered as a result of doctor’s negligence of duty (Dickson et al. 2016). However, the comparison between the rate of medical malpractice and the rate of compensation for injuries suffered by the patients as a result of the malpractices indicates that very few individuals are compensated even among those with viable negligence claims.  In the U.S. it is only 50% of patients in pursuit of damage in court who have been compensated in cases involving less than $250,000 (Gibson 2015). The statistics indicate that the negligence-based system has failed in its role to support a medical-error free environment and to assist patients in their pursuit of compensation — the threat of medical practitioners facing lawsuits for their negligence act as a deterrent for reducing medical errors and thus play a vital role in maintaining high standards of clinical care (Sohn 2013). However, this approach used by the negligence-based system has failed to contribute methodically to making the healthcare safer. The assertion that lawsuits would act as a deterrent against medical errors is illogical since most of the errors are not intentional and hence, it is hard to deter them. 

The tort-based system of compensation is committed to the fault criterion, but any advantage of the system comes at a considerable cost.  The court based system of pursuing damage for injuries inflicted as a result of doctor’s negligence is expensive especially on the part of the patient (Dickson et al. 2017). The litigation processes through the tort-system are long and arduous they may impair on the rehabilitation of the injured claimant.  Hyman & Silver (2006) posits that it is problematic to envisage the outcome of the litigation process due to the susceptibility of the procedures that need to be followed. The court put the onus of proving negligence of duty on the patient even in the event where the patent has suffered clear injury.  Over 50% of expenses spent on medical malpractices in the U.S. is directed towards funding litigation rather than compensating the injured patients (Dickson et al. 2017).   Additionally, compensation only occurs in less than 10% of potentially viable claims. Moreover, the rate of compensation that the patients receive is mostly not commensurate with the extent of injuries they suffer. Some of the patients suffer permanent disabilities or even death and the compensation they receive cannot cater for adequately for such damages.  The promoters of the tort system argue that it promotes deterrence to medical errors despite failing to promote an environment that supports the compensation of patients who suffer serious injuries. The pursuit of damage has been proven to be a nightmare for most of the patients who have agonized injuries as a result of a doctor’s negligence. The negligence-based system is slow, costly, inefficient and unreliable for patients who have suffered serious injuries to get any meaningful compensation (Wallis 2017).  Most of the patients cannot afford the cost of ligation especially among the aged who lacks a constant flow of income.  The bureaucratic nature of the tort law system discourages several  patients have  suffered genuine injuries from seeking compensation due to limited chances of being successful in their pursuit of damages.

The tort law system also fails to impose the cost of injury recompense on the perpetrator due to compulsory uptake of liability assurance by those who are likely to cause injuries (Wallis 2015).  The liability insurance creates an incentive for careless action and more medical errors from medics (Wallis 2015). Liability insurance deters doctors from actively engaging in more actively reporting in adverse events (Wallis 2015). Subsequently, patients are denied an opportunity to receive financial redress for their injuries for lack of supportive evidence even in the events where they may be well entitled.  Doctors fail to report injuries in adverse events since the litigation process has been established to be stressful on the doctors and their families. It also leads to some doctors giving up on medical profession entirely to avoid being implicated in serious cases — those doctors who do not quite the profession result to defensive medicine which in turn drives the cost of operation (Weisbro & Breen 2012).  Through defensive medicine, doctors will shy away from engaging in medical practices with an element of risk and hence the hospitals will be forced to employ new doctors who are proficient in that area of care.

Conversely, the no-fault system can help to overcome most of the insufficiencies noted with the tort law system including but not limited to high costs in proving negligence and failure to compensate patients adequately.  One of the biggest advantages of the no-fault system is predictability of award. Unlike the tort law system that creates bias through randomness in the award of compensation, the no-fault system ensures equal opportunity for any individual to the claimant to receive damage compensation regardless of the injury he/she suffers (Wallis 2017). The no-fault system provides a reliable coverage for all injured people irrespective of the circumstances that lead to the person suffering the injury. It is also a more efficient system since care and support is guaranteed in the event that a patient suffers an injury as a result of a doctor’s negligence (Weisbrot & Breen 2012). In the no-fault regime, compensation is guaranteed even without the proof of fault.  The chances of the patient receiving the compensation payment are not contingent on the attribution of fault.  However, unlike the tort law system, the no-fault system embodies the idea of strict liability to promote a high sense of care by doctors in providing healthcare services.   The strict liability ensures that the doctors go an extra mile to decide which precautions to take and to what extent they need to take the precaution to prevent causing an injury on the patient (Watson & Kottenhagen 2017).  Under the tort law system, the court needs to establish the extent of negligence of duty based on the legal standards for the socially optimal level of care. The approach makes the doctors focus on private benefits he/she will gain rather than the level of effects her action has on the total amount of damages. However, the no-fault system the court determines the size of damage that the patient suffers and thus the doctor considers the number of social costs and reduces her mistakes to socially optimal levels.  The graph can best explain how the no-fault system can help bring socially optimal results.

Fig. 1

Source: An Economic Model of Tort Law

The graph above represents how the no-fault system can help reduce expected damages in the provision of care leading to the optimum social result. The problem under this graph can be represented as x+p(x) D(x). The total cost of accidents is minimized at the point x*.  At levels of attention below x*, an extra dollar of attention reduces the casualty’s probable indemnities by more than one dollar, so total costs are abridged (An Economic Model of Tort Law, n.d, 42-43). However, beyond x*, an extra dollar of attention decreases probable damages by less than one dollar, so total costs rise. At point x*, the slope curve equals to negative of the slope of p(x) D(x) curve (An Economic Model of Tort Law, n.d, 42-43). The slope of x represents the marginal cost of care at $ 1while p(x) D(x) represents the marginal benefit of care.  

As indicated in the graph above, the no-fault will be cheaper for the patient to demand compensation since they will only be charged with the responsibility of proving causation and not fault which is unlike in negligence-based system where the injured had to prove both causation and fault (Hyman & Silver 2006). It is evident that the no-fault system demand less fact-finding hence involves less costly trials than in the case of the negligence-based system.  While the negligence-based system creates an environment that leads to litigation, the no-fault system leads to low cost of litigation.

Other than lowering cost, the no-fault system can play a vital role in changing the doctor’s attitude in matters relating to patients’ safety. The system gives doctors a chance to learn from mistakes and avoid defensive medicine. It will also support reporting of adverse outcomes and support collection of data reading the amount of harm that a patient has suffered.

In a nutshell, the no-fault system proves to be better than the negligence-based system since it provides all patients with an equal opportunity to receive compensation for injuries suffered irrespective of the circumstances the injuries were suffered. The no-fault system promotes optimal social result by doctors applying all necessary precautions to prevent injuries. The assertion that application of the tort law system acts as deterrence for doctors from making medical mistakes is illogical. There is a lack of evidence to support the assertion, and hence, there is need to adopt the no-fault system.


Bismark, M. and Paterson, R., 2006. No-fault compensation in New Zealand: harmonizing injury compensation, provider accountability, and patient safety. Health Affairs25(1), pp.278-283.

Cohen, L.T. and LaFlam, J.M., 2007. Is” No-Fault” the Cure for the Medical Liability Crisis? Commentary 2. AMA Journal of Ethics9(4), pp.317-321.

Dickson, K., Hinds, K., Burchett, H., Brunton, G., Stansfield, C., & Thomas, J. (2016). No-fault compensation schemes: A rapid realist review.

Douglas, T., 2008. Medical injury compensation: beyond ‘no-fault’. Medical law review17(1), pp.30-51.

Gibson, E., 2015. Is It Time to Adopt a No-Fault Scheme to Compensate Injured Patients? Ottawa L. Rev.47, p.307.

Hyman, D. A., & Silver, C. (2006). Medical malpractice litigation and tort reform: It’s the incentives, stupid. Vand. L. Rev.59, 1085.

Sohn, D.H., 2013. Negligence, genuine error, and litigation. International journal of general medicine6, p.49.

Watson, K. and Kottenhagen, R., 2017. Patients’ Rights, Medical Error and Harmonisation of Compensation Mechanisms in Europe. European Journal of health law25(1), pp.1-23.

Weisbrot, D. and Breen, K.J., 2012. A no‐fault compensation system for medical injury is long overdue. Medical Journal of Australia197(5), pp.296-298.

Wallis, K.A., 2015. Learning from no-fault treatment injury claims to improve the safety of older patients. The Annals of Family Medicine13(5), pp.472-474.

Wallis, K.A., 2017. No-fault, no difference: no-fault compensation for medical injury and healthcare ethics and practice. Br J Gen Pract67(654), pp.38-39.

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Oppressed Rights by the Oppressive Regime in Margaret Atwood’s the Handmaid’s Tale Essay

Oppressed Rights by the Oppressive Regime in Margaret Atwood’s the Handmaid’s Tale Essay.

Margaret Atwood’s The Handmaid’s Tale delves well into the horrid nature of extreme control and immoral limitations in defining the corrupt theocratic government at large, and more specifically the effect this control has on the society’s women. In an age in which a newly emerged and merciless governmental system called the Republic of Gilead has “put life back to the middle ages,” sparked by a widespread panic of infertility, personal freedom and individuality have become unimaginably reduced (Genny 1).

Handmaids selected to live in the houses of wealthy, well-respected couples go through a life entirely designed by the government for the sole purpose of bearing children. Caught between following the strict rules made for women by the Republic and breaking them in secret for the sake of her sanity, the protagonist Offred essentially but not purposefully offers close to nothing for her society’s benefit.

Not allowed to read, write, speak her thoughts or even look another in the eye, the most she can offer proves to be occasional, well-monitored grocery errands and the slight possibility of providing the gift of life for an elite Commander and his Wife.

Parallel to a dystopia in which Offred has been stripped of the most simplistic allowances, women in today’s various Middle Eastern societies find relatively equal difficulty in utilizing their strengths due to the severe suppression and forced structure of their daily lives.

Regardless of the varying context of these two scenarios, they both present themselves problematically in light of women’s personal struggle to contribute in society—in both Atwood’s The Handmaid’s Tale and the modern Middle East, seemingly unethical yet extreme theocratic government exercises examples of such radically unformed control over its people that the exploitation and demeaning of the natural rights of women become prevalent.

But on what grounds should the male citizens of the Republic of Gilead and those in today’s foreign communities be granted more liberation and opportunity while the women are held more captive of their own independence? As Offred finds herself trapped in such an unreasonably restrained living situation, she instinctively recognizes the current lack of available free will because she once knew what freedom looked and felt like.

For example, in opposition of her training as a handmaid with the Aunts, she cannot help but wander her ind back to the pre-Republic days “thousands of years before,” when she and fellow females could actually go to school and watch “movies of the rest of the world” that even included “dancing[,] singing, ceremonial masks, [and music],” clearly taking place in a land where “people…were happy” (Atwood 118). Offred as well as other handmaids in her place inevitably suffer within their reality by trying to maintain a grasp on the memories of such privileges they once took for granted, such as real television to promote quality education.

Instead of living the naturally liberal life of opportunity that was once available to Offred and existed in her home and school life, such a vision has been taken away by the government and exists now only in her memory, as the Aunts present to her and the other potential handmaids a government-approved film with “the title and [few] names blacked out…with a crayon so [they] couldn’t read them”—another example of a ludicrous constraint, reading, that could have instilled fruitful possibilities in the mind of a woman (Atwood 119).

In addition, as if the recollection of accredited education and other past events were not enough a cause of longing, Offred also recalls the fearless, empowering spirits of her late loved ones—particularly her mother whom she spots in the film, “wearing the kind of outfit Aunt Lydia told [the handmaids] was typical of Unwomen in those days” while “smiling, laughing…and raising [her] fists in the air” (Atwood 119).

To witness such a wild and free spirit in action, that once was allowed for women but has been officially banned by the radical Christian followings of the Republic of Gilead, undoubtedly sparks a deep temptation within handmaids to rebel against this authority inflicting such “unacceptable losses of intellectual liberty”; however, such a temptation proves to be a challenge to pursue for some women today (Tolan 1).

While the initial teachings of Islam attempted to improve living conditions for Muslim women by granting them some of the same rights as men in the seventh century, women become incapable of endorsing these rights when their society attempts to enforce the “laws” of the Islamic religion, described by the Columbia University professors who wrote At the Crossroads of the World: Women in the Middle East: Today, many Muslim women do not have the opportunity to enjoy rights once considered theirs by their religion.

Women may be unaware of their rights or live in societies where these rights have been misinterpreted or misrepresented by individuals in power (be it the state, culture, or family). In Muslim countries around the world, there is a fundamental difference between what is prescribed by religious texts and what is actually practiced, a gulf between the ideal and the real (Esposito 1998, xiii).

Often, the purportedly ‘religiously grounded’ restrictions placed on women within certain societies have little or nothing to do with the teachings of Islam. More often they are a function of socioeconomic and political factors. Recent examples of such restrictions included Taliban-controlled Afghanistan, which prohibited women from receiving medical attention from males and placed other restrictions on their movement in public (Revolutionary Association of the Women in Afghanistan)(Crocco, Pervez, and Katz 110).

At most, these women are granted with the illusion that they possess legitimate freedoms, when in actuality their government prohibits this execution with the false justification that it simply conforms to the Islamic religion. The handmaids and all women alike governed by the Republic of Gilead correspondingly must follow the rules of the regime that claims to be operating in the name of the Christian faith in an attempt to validate its restrictive essence.

Thus, no question exists as to how Offred becomes “increasingly reckless with her actions and behaviors,” or to why in the end “there is the strong possibility that her recklessness has cost her her life” (Genny 1). Most emphatically does Offred’s situation come off as unjust when she finally experiences a small taste of the natural freedom she once had but still deserves. Because it is obviously an “oasis of the forbidden,” she has to force herself to “hold…absolutely rigid” when the Commander invites her into his off-limits personal turf to play a game of Scrabble, something harmless, yet banned.

Despite “[t]he fact that [she’s] terrified,” Offred still recognizes that “this is freedom[;] an eyeblink of it,” as if “he were offering her drugs” (Atwood 138-139). While Atwood implies in her novel that “feminist utopianism cannot avoid the taint of totalitarianism,” she employs the concept of defiance in that Offred can nourish her natural tendencies to actually enjoy herself through breaking the rules (Tolan 30).

Similarly for the women in Iraq, the Ba’ath Party that emerged in 1963 sought provisions for women’s equality, including the liberties of education and employment; however, outside the major urban center of Baghdad, “the society still relegated Iraqi women to a very inferior position vis-a-vis men” (Brown and Romano 1). To maintain two adjacent communities with such contrasting ways of governing women is arguably contradicting and therefore, a cause for concern.

Ultimately, women have simplistically natural rights that ought not to be rendered in the least, especially by illegitimate theocratic governments. Under no circumstances are the rights to thought, decision, reading, and writing, among many others, capable of being outlawed justifiably, regardless of gender. With such liberties, women carry great potential in contributing to society, despite the possibility of infertility or radically religious devotion—and in a lot of cases, that contribution can be imperative.

Today in Iraq, a woman cannot own private property or hold any status, while forced to give up her education and marry a stranger. However, women still make up 65% percent of the population, and make up 70% of the agricultural workforce (Al-Jawaheri and Harris). Though they continue to fight for the equal rights and treatment they deserve while accepting their low circumstances, the crucial importance of granting women this moral blessing remains strong.

Oppressed Rights by the Oppressive Regime in Margaret Atwood’s the Handmaid’s Tale Essay

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Penalty Regime To Counter Corporate Finance

Penalty Regime To Counter Corporate Finance.


Discuss about the Penalty regime to counter corporate finance.





The Royal Commission into misconduct in the banking, superannuation and financial services industry had been established on 14th December 2017 by the governor general of the Commonwealth of Australia, His Excellency General the Honorable Sir Peter Cosgrove AK MC (Retd).

With increasing misbehavior of the financial services industry in Australia, the government had declared a Royal Commission wholesomely into the banking institutions and other financial service institutions. The Government had allegedly stated that the Royal Commission launched by it would take up a conventional and focused approach. The results of the Royal Commission are due on February 2019. 

Literature Review

The Royal Commission

A majority of the population in Australia are the potential consumers of banking, superannuation and other financial services. The superannuation system accounts for more than over $2 trillion retirement savings pool and are growing rapidly, which has resulted in most of the Australians deferring income for their retirement (Merrington 2015). 

The matters into which the commission will investigate and inquire are as following:

  • The type of the misconduct, its impact and extent by any financial services entity has been intended to examine and scrutiny
  • The practices, behavior or operational activity carried out by a particular financial services entity that does not meet up to the recognized standards of integrity and expectations have also been investigated
  • The royal commission has also been executed by the government to look into the existing regulations and mechanisms that evaluate the effectiveness of these regulatory procedures that control the conduct of the financial services industry
  • It further carries out a scrutiny of the financial institutions by scrutinizing their existing policies and laws, internal controls that have been implemented within the organization and the codes of conduct followed by the employees of the organization.
  • The Commission also has enough independence to give due importance to the matters that it thinks to have greater potential to harm the society
  • The Commission will not be required to investigate into or refer to any kind of recommendations in case of the macro-prudential policy, oversight or regulations

An overview into the objectives of the commission primarily indicates that the Royal Commission was a much needed action that had been finally executed by the government in order to clear the irrational behavior by the banks and other financial institutions in Australia (Smith 2017).

According to the sources, the major reasons behind the government of Australia launching a Royal Commission in the financial sector of the economy had been that the banks of Australia had been going through one scandal after another over the past financial years. This can be evidently cited from the incidents that have taken place in the banking economy since the financial crisis. After the financial crisis the banks in Australia had paid fines of amounts as huge as $1 billion for unethically acquiring money from their customers or clients by fooling them (Smith 2017). 

The Commonwealth Bank in Australia had been dealing in money laundering practices, which involved 55000 breaches. There also had been other incidents, which triggered the government to launch the Royal Commission in the banking sector. However, the major event that grabbed the attention of the entire world was that around 20 national Australian banks had been sacked for inflating the real estate market by rapidly sanctioning bad loans or loans that had no chances of being paid back by the customers, as they did not meet the credit worthiness. Thus, the Royal Commission was a rightly taken decision by the government (Coleman 2016).

The primary motive of the banking industry that is accumulation of profit has also hampered the integrity standards that have not been maintained by the banks. Moreover, the banks in Australia did not have the necessary corporate governance structure. This means that the organizations had no particular clue in regards to the exact position where the responsible managers had been placed and the effectiveness of the operations carried out by the managers in the due course of business. Furthermore, the remuneration structure of the banks had essentially been flawed as they did not set out the objectives and the structure of the remuneration arrangements that accounted for the approval of the remuneration policy by the board. The remuneration framework of the banks gave no due importance to the factors like incentives for protecting or preserving the interests and meeting up to the expectations of the stakeholders of business, the long-term financial strength of the trustee and the risk management framework of the trustees (Carnegie and O’Connell 2014).

The other reason behind the government launching the Royal Commission has been that the banks have been continuously robbing off its clients. The list of the fraudulent banks has not excluded the big players of Australia like the ANZ bank, Commonwealth Bank of Australia and other banks. For instance, the banks in Australia had unethically schemed out as much as $178 million. This had been essentially achieved by the banks by imparting false financial advices to its customers. The particular scandal that had been carried out by the Commonwealth Bank of Australia had been that the biggest bank of Australia had resorted to the unethical standards for gaining revenues. The bank now is liable to pay $106 million plus interest (Virgo 2015).

Name of the Bank

Compensation that have been agreed to be paid

Estimated future compensation

Total (estimate)



$2.4 million

$4.6 million



$33.5 million

$49.7 million



$105.1 million plus interest

$105.7 million plus interest



$13.4 million plus interest

$16.9 million plus interest




$1.2 million



$154.4 million

$178 million plus interest

The above table shows the segregated values of the fines that are to be paid by the different financial institutions like the AMP, ANZ, CBA, NAB and Westpac for carrying out the fraudulent activities with its customers.

Furthermore, the lack of accountability on the part of the banks has been a major issue in the banking sector of Australia. The culture of the private banks has essentially been sales driven and this has resulted in the banks refusing anyone in a senior position to account. There have been numerous examples of scandalous events taking place in Banks like the ANZ and Macquarie banks. Such occurrences of events have asked for immediate reaction by the upper or senior level management. However, the lack of taking on the blame or accountability on the part of the executives that belong to the higher level of hierarchy aggravate the misconduct of the banks. Therefore, it has been necessary for the government to execute a Royal Commission into the financial services industry of Australia (Steen, McGrath and Wong 2016).

The particular financial scandal that had particularly grabbed the attention of the entire world economy had been the financial fraud carried out by the Commonwealth Bank of Australia’s financial planning scandal. The scandal particularly included the bank misleading its customers by recommending speculative investments, which robbed them off, of their respective money. The bank had also committed frauds such as forging signatures, overcharge of the fees and the creation of investment accounts that are unauthorized in nature particularly for their clients without merely informing them (O’Brien 2015).

Earlier there had been proposals or recommendations for the launch of an inquiry in the activities that have been carried out by the banks. However, the federal government had rejected the proposal. Nevertheless, the former bank planner belonging to the Commonwealth Bank of Australia who had also played the role of a whistleblower, had announces to the media that serious talks were going on in regards to the conducting of a Royal Commission. The Senate committee felt that it was the only option, that could change the financial services industry in Australia (O’Brien 2015).

He argued that for the launching of a Royal Commission into the banks, so that the public would get to know the institutions in which they deposited their hard-earned money.

The particular area where the  banks needs to be reformed is that they have to carry out more transparent processes in regards to the actions that they incorporate for the purpose of compensating the customer money. This means that they should have provided reports about the steps already taken by them to compensate their wrongdoings. But this had not been achieved by any of the banks as they lacked the integrity to compensate their customers. Moreover, the ongoing review with the Commonwealth Bank of Australia had not been satisfactory, as the bank had not reported all the breaches to the ASIC. After the acceptance of committing the fraudulent activities, there had been no further reports by the financial service providers in regards to the governance regulations adopted or the internal controls implemented within the organization for minimizing the further occurrence of such actions (McIlroy 2017). 

In this regards, the ANZ bank had reported that the management of the organization had sacked more than a dozen financial planners in the past twelve months. The bank had also reported that more than $30 million have been planned to be refunded to around eight thousand financial planning customers. Hence, it is evident from the discussed information that there have been mere apologies and planning by the banks, but they have executed no legible action plans or operations (McIlroy 2017).

To add up to this, the insurance arm of Commonwealth Bank of Australia also had been charged as guilty for the use or adoption of unethical practices to avoid the payment of legitimate claims. The insurance arm of Commonwealth bank, popularly known as CommInsure is one of the top life insurer companies of Australia. It holds a customer base of about four million policy-holders. The insurance company had been caught red handed for the adoption of unethical practices for denying legitimate insurance claims of its customers. They also delayed certain payments to clients who had genuine reasons and needed the money from the insurance. The whistleblower in such a case had been Dr Koh who worked as the chief medical officer in the organization. Dr Koh had reported to the media there were several files missing and the information on numerous files had been altered in order to avoid the payments of insurance. When the doctor and his team had asked the IT department of the insurance company to look into the matter and find the actual matter of the fact, the request had been denied (O’Brien 2015).

Dr. Koh then carried his concerns to the Board of Directors hoping to find a solution there. However, instead of getting the issue resolved, the doctor had been dismissed from his job role. There had also been several instances where the employees of the organization itself or of the parent entity, that is the Commonwealth Bank of Australia had not been paid their legitimate amount of insurance claims or had been paid at a later period of time. The adoption of the trick of outdating the medical definition in the contracts for the purpose of delaying or denying payments to the policyholders was a major misconduct and has affected the public in a huge way. Moreover, there had been reports that no employees were sacked in the due process (O’Brien, 2015).

The government now has been strict with such fraudulent and unethical institutions and has pressurized the banking body to accept more than 54,000 breaches that the bank had committed at different occasions. The Commonwealth Bank of Australia now faces about one trillion worth of fines (McIlroy 2017).

The banks had never wanted a Royal Commission, as that would mean further analysis of the still undiscovered frauds carried out by the unethical financial institutions. As a result, of which, the banks especially the big four banks of Australia had decided to drop the ATM fees.

However, such a measure could not mitigate the proposed Royal Commission into the financial services sector of Australia. This is because the Royal Commission had been proposed by the government in order to address and highlight the instability and chaos that the financial sector of the country is heading on to (Boersma 2015).

The fraudulent behavior by the top banks of the nation is not only harmful for the public but also for the worldwide image of the nation. The banking sector in Australia is gradually losing trust and respect from the entire world and the impending outcome is that the economy of the country will face a huge financial disaster affecting the world economy as a whole (Adams caes et al., 2017). 

However, it should be further noted here that the government in spite of mentioning the happening of a Royal Commission for the betterment of the public and the banking and finance sector as whole, has been under quite pressure. This is the actual reason why, despite so many rejections by the banking bodies the Royal Commission is being conducted (Adams caes et al., 2017).

The key factor at play here are the elections. With two by-elections under the way, the government does not want to frustrate the public, further. Moreover, the opposition party has been calling for a Royal Commission for a period of more than eighteen months (Adams caes et al., 2017).


Thus, all these factors have contributed to the Royal Commission. This decision, irrespective of the fact whether it had been considered for winning votes or voluntarily by the government is the only and the most apt solution for the increasing misconduct by the financial services industry in Australia. A Royal Commission will not only help in understanding the actual frauds that had been carried out by the banks but also implement the potential solutions.


The conclusion that can be arrived at from the literature review is that a Royal Commission is very much needed in Australia especially in the financial services and banking sector. This is because a major portion of the common people have been hampered due to these banks and they deserve rightful compensation. 


Adams, M., Borsellino, G., McCalman, J. and Young, A., 2017. Australia’s proposed Banking Executive Accountability Regime: regulatory panopticon or fail-safe?. Governance Directions, (9), pp.528-531.

Boersma, M., 2015. How Does Sustainable Banking Add Up?.

Carnegie, G.D. and O’Connell, B.T., 2014. A longitudinal study of the interplay of corporate collapse, accounting failure and governance change in Australia: Early 1890s to early 2000s. Critical Perspectives on Accounting, 25(6), pp.446-468.

Coleman, W. ed., 2016. Only in Australia: The history, politics, and economics of Australian exceptionalism. Oxford University Press.

Gilligan, G., Ali, P., Godwin, A., Hedges, J. and Ramsay, I., 2015. An Analysis of Penalties under ASIC Administered Legislation: Scoping the Issues.

Gilligan, G., Godwin, A., Hedges, J. and Ramsay, I., 2017. Penalties regimes to counter corporate and financial wrongdoing in Australia–views of governance professionals. Law and Financial Markets Review, 11(1), pp.4-12.

Gilligan, G., Godwin, A., Hedges, J. and Ramsay, I., 2017. Penalties Regimes to Counter Corporate Misconduct in Australia–Views of Governance Professionals.

Matthews, A., 2016. The financial services industry: Whistleblowing and calls for a royal commission. Precedent (Sydney, NSW), (136), p.35.

McIlroy, J., 2017. Banks halt ATM fees to head off royal commission. Green Left Weekly, (1155), p.11.

McIlroy, J., 2017. Re-nationalise the commonwealth bank. Green Left Weekly, (1149), p.11.

Merrington, S., Lauchs, M., Bell, P. and Keast, R., 2015. An exploratory study of noble cause corruption: The Wood Royal Commission New South Wales, Australia 1994-1997. International Journal of Management and Administrative Sciences, 2(4), pp.18-29.

O’Brien, J., 2015. The tyranny of distance and the paucity of imagination: an evaluation of the Australian Financial System Inquiry.

O’Brien, J., 2015. The tyranny of distance and the paucity of imagination: an evaluation of the Australian Financial System Inquiry.

Smith, K., 2017. Australia to boycott nuclear disarmament negotiations. Green Left Weekly, (1127), p.7.

Steen, A., McGrath, D. and Wong, A., 2016. Market Failure, Regulation and Education of Financial Advisors. Australasian Accounting Business & Finance Journal, 10(1), p.3.

Virgo, G., 2015. Principles of the Law of Restitution. Oxford University Press, USA.

Penalty Regime To Counter Corporate Finance

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The Human Rights Regime Human Rights Essay

The Human Rights Regime Human Rights Essay.

While the idea of human rights may have a discernible homogeneity, perhaps derived from some kind of natural law theory or social theory, it is nonetheless clear that the implementation of these rights by states lacks a corresponding identity.

Davidson’s (1993, p.89) analysis of the concept of human rights highlights the chief difficulty that has faced the past generation of human rights regime, namely that it is an international problem that cannot be efficiently policed and guarded against by state law alone.

The ubiquitous problem of definition only makes it easier for offending companies or nations to claim that their crimes do not officially come within the official realm of human rights. The current statecentric definition of human rights therefore facilitates evasive tactics and succeeds only in diminishing the significance of the issue on the eyes of statesmen and policy makers.

To best tackle the dual problem within the title of this essay we first need to attempt to define the modern human rights regime, place it in its contemporary political context and evaluate its primary obstacles.

Then we need to analyse the role of multinational corporations to evaluate in what ways these pose a problem to the human rights regime, posing the question of how these ubiquitous forces can be made accountable for their overseas empires. And finally we will examine the question of whether or not a new generation of human rights activity and organisation is required.

The United Nations Charter (1948) is the vehicle for the international ideal of human rights, law and democracy. Article 1 of the Universal Declaration of Human Rights (2000, p.82) sets out a modern definition and has served as the blueprint by which all subsequent interpretations have been measured. All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood. The phraseology is famous for its humanitariancentric ideology but herein lays the problem of the human rights issue within the broader international agenda. In political philosophy, the spirit of the Universal Declaration and subsequent treaties such as the Vienna Convention (1993) are inherently left of centre and imply a cooperative understanding and information exchange between modern states, east and west, north and south that is modelled on broadly socialist ideals.

Yet, inevitably, the feeling of responsibility towards all oppressed people of the world, that was a legacy of the horrors of World War II, quickly dissipated. As history has taught us time and again, domestic economic and political concerns soon superseded human rights at the top of the international relations agenda and it is within such an environment that the modern human rights regime must currently work.

The postwar international political situation has been exacerbated in recent times by the advent of globalisation as a political and economic reality. The Maastricht Guidelines on Violations of Economic, Social and Cultural Rights (1997) details the enormous change that globalisation has meant to the lives of millions of people across the globe.

Since the Limburg Principles were adopted in 1986, the economic and social conditions have declined at alarming rates for over 1.6 billion people, while they have advanced also at a dramatic pace for more than a quarter of the world’s population. The gap between rich and poor has doubled in the last three decades, with the poorest fifth of the world’s population receiving 1.4% of the global income and the richest 85%. The impact of these disparities on the lives of people – especially the poor – is dramatic and renders the enjoyment of economic, social and cultural rights illusory for a significant portion of humanity.

It naturally follows that many human rights lobbyists are also opponents of globalisation, in which they see the conduit through which further human rights abuses will be facilitated as the gulf between the rich and poor of the world continues to widen. And because the concept of globalisation relies heavily on the dynamics of transnational corporations it does not take a great leap in deduction to imagine that human rights abuses will slip further away from the top of the western political agenda if the west continues on its current economic and political course of action.

The issue of the increased social and political role of transnational corporations (TNC’s), as Jochnick (1999, pp.5679) testifies, is a major problem for the enforcement of the human rights agenda.

Most developing countries face TNCs with revenues many times larger than their domestic economies. TNCs account for almost half of the top one hundred economies in the world, and a mere two hundred of them are estimated to control a quarter of the world’s productive assets. Grouped together in trade associations with the active support of their home countries, TNCs exercise an inordinate influence over local law and policies. Their impact on human rights ranges from a direct role in violations, such as abuses of employees or the environment, to indirect support of governments guilty of widespread oppression.

The argument to limit the scope of TNCs has been prevalent for the past thirty years. In 1974 the Charter of Economic Rights and Duties of States declared in Article 2 (b) that, each state has the right to regulate and supervise the activities of transnational corporations within its national jurisdiction and take measures to ensure that such activities comply with its law, rules and regulations and conform with its economic and social policies. While the political reality of human rights abuses has altered little due to the above statement and indeed the increased focus on human rights in general, its existence as an ideal and a manifestation of consensus amongst the generation of drafters makes it an important and relevant document for the next generation of human rights activists. In 2003, for instance, the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regards to Human Rights defined human rights and transnational companies in a bid to clarify the ambiguities that have existed since 1945. It also specified areas of negligence such as the treatment of children and the provision for providing adequate food and drink for the workforce. This document underscores the continuing strive to hold multinationals to account but it likewise poses as many questions as it answers.

Although the accountability of transnational corporations is a commendable course of action it is fraught with problems of perspective. The main theory posited against the legal extension of human rights violations to include TNCs is that multinational corporations are private entities and should not have the same restrictions such as those imposed upon states. TNCs should, from this viewpoint, be responsible only for the proper conduct of their business and should not have to interfere in broader social issues, which ought to come within the jurisdiction of the local national government or the UN. At this point we need to examine the intricacies of the traditional multinational corporation so as to determine the necessity for an increased net of surveillance.

Nike is probably the incarnation of a major multinational corporation within the bounds of this discussion. Since the Reagan administration there has been consistent questioning of the role of Nike in Third World countries with particular emphasis on the growing divide between the company’s turnover and the lifestyle of the workers in countries such as Indonesia, where many of the firm’s manufacturing plants are in operation. The specific problem of corporate responsibility for multinationals such as Nike is explained in detail by Daniel Litvin (2003, p.228).

The American multinational does not actually own the facilities producing its sports gear around the world; rather, it contracts out its manufacturing to other firms. And it has tried to respond to western criticism over its alleged ‘sweatshop’ production by setting up numerous systems for monitoring labour practices in these factories, largely involving visit and inspections by outsiders. But just as Cecil Rhodes’ British South Africa Company seriously misunderstood the cultural dynamics of the indigenous societies of South Africa, and just as Aramco, for all its efforts, found it difficult to predict changes within Saudi society, so Nike has been struggling to track the conditions in its factories.

Within the case study of Nike is a problem that affects the entire human rights corporate agenda. Although multinational companies are registered in western countries, much of the grass roots level abuses occur outside of the scope of the executive branch. Clearly human rights lobbyists will state that Nike and other TNCs in its position ought to ensure a more durable form of internal communication but, legally speaking, the fact that the manufacturing is subcontracted shifts corporate responsibility away from the multinational and only creates more legal and political issues for the human rights regime.

There clearly is a need for a new generation of human rights regime, one that is not so inherently statecentric in its analysis of the issue. Because of the economic and political climate of dominant western powers, which we have already outlined, much of the work of human rights bodies must take place within the confines of nongovernmental organisations (NGOs). Unlike national governments, who have to deal with a perpetually shifting social agenda, NGOs can dedicate their time and resources to the achievement of individual, secular goals.

The work done by human rights NGOs is various and diverse. Much of their remit involves carrying out some form of information gathering and fact finding activities. Furthermore, nonstate parties have learnt, from the conflicts in Africa and Central and Southern America, that networking between organisations is the best way to achieve homogeneity against statesponsored and corporate oppression. As a result, NGOs have helped bring to the attention of the world media human rights abuses that might otherwise have continued undetected. But this is not an end in itself; it is merely a means to an as yet undecipherable end, as highlighted by Hegarty and Leonard (1999, p.283).

There is some evidence that overt monitoring by NGOs deters states from committing abuses. But, there are many places in the world where overt monitoring is not possible, and there are many governments that seem able to dismiss easily United Nations criticism of their human rights record.

The influence of nongovernmental organisations therefore remains cultural rather than institutional or organisational and there are definite limits to the reach that they have in international relations.


Human rights, as a creed, are inexorably tied with the political and economic concerns of the west and its programme of globalisation. It thus follows naturally that many of the arguments for and against the role of multinational corporations within the ongoing debate are politically motivated. For example, many of the voices of dissent against TNCs contain the same voices of opposition against globalisation; ditto for supporters of globalisation who seek to cover up the core business excesses of multinationals. We must therefore be aware of hidden agendas and political rhetoric and recognise this as a major obstacle to the advancement of human rights at the beginning of the twentyfirst century.

The statecentricity of the contemporary human rights regime has resulted in the suffocation of a social force that would otherwise surely have made more strident inroads into curtailing the power of multinational companies. However, the increased communication and network strategies of nonstate actors has resulted in a more united human rights regime with greater authority in the state political sphere. The future challenge is for the next generation of human rights regime to resist the inevitable challenge of the world’s economic elite, who will naturally fight against all attempts to narrow perceptions of human rights, and to bring multinational corporations to account for their overseas capitalist practices.


S. Davidson, Human Rights: First Edition (Open University Press; Buckingham, 1993)

D. Forsyth, Human Rights in International Relations (Cambridge University Press; Cambridge, 2000)

C. Gearty, Principles of Human Rights Adjudication (Oxford University Press; Oxford, 2004)

A. Hegarty & S. Leonard (Edtd.), Human Rights: an Agenda for the TwentyFirst Century (Cavendish; London, 1999)

M.T. Kamminga & F. Coomans (Edtd.), Extraterritorial Application of Human Rights Treaties (Intersentia; Antwerp & Oxford, 2004)

D. Litvin, Empires of Profit: Commerce, Conquest and Corporate Responsibility (Texere; New York & London, 2003)

J.W. Nickel, Making Sense of Human Rights: Philosophical Reflections on the Universal Declaration of Human Rights (University of California; Berkeley, 1987)

C. Ovey & R.C.A. White, Jacobs and White: European Convention on Human Rights: Third Edition (Oxford University Press; Oxford, 2002)

P. Plowden & K. Kerrigan, Advocacy and Human Rights: Using the Convention in Courts and Tribunals (Cavendish; London, 2002)

G. Teubner (Edtd.), Global Law without a State (Dartmouth; Aldershot, 1997)

Human Rights in International Law, Collected Texts: Second Edition (Council of Europe Publishing; Strasbourg, 2000)

International Treaties and Documents

Charter of Economic Rights and Duties of States; GA Res. 3281(xxix), UN GAOR, 29th Sess., Supp. No. 31 (1974) 50

The Maastricht Guidelines on Violations of Economic, Social and Cultural Rights (Maastricht; January 2226, 1997)

Universal Declaration of Human Rights (1948), in, Human Rights in International Law, Collected Texts: Second Edition (Council of Europe Publishing; Strasbourg, 2000)

Selected Articles and Journals

C. Jochnick, Confronting the Impunity of NonState Actors: New Fields for the Promotion of Human Rights, in, Human Rights Quarterly, Volume 21, Number 1 (February 1999)

L. Wiseberg, Protecting Human Rights Activists and NGOs, in, Human Rights Quarterly, Volume 13, Number 525 (November 1999)

The Human Rights Regime Human Rights Essay

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