Responding to the Law Commission's publication, today, of options for the Government to consider relating to reform of the UK's corporate criminal liability laws, Kate Meakin, a partner in HSF's disputes practice, suggests that the proposals may disappoint some whilst also providing a degree of clarity for British businesses.
"Those who have previously called for a broad failure to prevent economic crime offence will be disappointed, with the Commission ruling out such an offence, though the narrower failure to prevent fraud remains on the table.
"Even so, the Commission cautions that such failure to prevent fraud offences should not be introduced simply to meet a belief that corporations are actually involved in encouraging or directing the commission of criminal offences, but there is insufficient evidence of this to prosecute them. They should, it notes, only be introduced if there is a good reason to expect corporations to have put in place reasonable prevention procedures. We welcome this."
The Commission was asked by the Government to carry out a review of the law on corporate criminal liability, and present a set of options for strengthening the law, in a way that does not overburden businesses. The review followed concerns that the law falls short in adequately holding corporations – especially large companies – to account, particularly for economic crimes such as fraud.
Today's publication highlights 10 options for possible reform, leading Meakin to add:
"The paper also addresses the directing mind and will test. The Commission does not recommend reliance on collective knowledge or corporate culture, but rather remains of the view that there should be an identifiable individual within senior management with the requisite culpability to attribute knowledge to the company. Interestingly in light of recent case law, the Commission envisages a provision that a CEO and CFO would always be considered part of senior management."