On June 10, 2022, the UK Law Commission (LC) published a set of proposals or options for corporate criminal liability law in the UK. The LC is an independent commission set up by Parliament, and its main function is to keep UK legislation under review and to recommend reform. The options paper does not make recommendations; it simply outlines 10 options that could strengthen corporate accountability through criminal and civil law reforms.
Prosecuting authorities have expressed particular concern that current law does not hold large corporations liable, particularly for economic crimes such as fraud and money laundering. Therefore, in November 2020, the government requested the LC to review the current Corporate Criminal Liability Act, in particular the challenges facing the criminal justice system under the current Corporate Criminal Liability Act. companies. The options paper proposes 10 options for reform:
- Maintain the current rule of corporate criminal liability and the current doctrine of identification as they stand, and therefore do nothing.
- Expand or modify the current rule to allow attribution of conduct to a company if a member of its senior management engaged in, consented to or connived at the breach. This would be extended so that CEOs and CFOs are still considered part of an organization’s senior management.
- Introduce an offense of failure to prevent fraud by an associated person, either an employee or agent for the benefit of the organization or a person to whom the organizations provide services, or a client. This would apply where a company has not put in place appropriate measures to prevent its employees and/or agents from committing fraud for the benefit of the company.
- Introduce an offense of failure to prevent human rights violations.
- Introduce an offense of failing to prevent abuse or neglect.
- Introduce an offense of failure to prevent misuse of the computer.
- Make publicity orders available in all cases where companies are found guilty of an offense as a strong deterrent.
- Introduce an administratively imposed pecuniary penalty regime.
- Bring civil actions in the High Court.
- Introduce a requirement for public interest entities to report on anti-fraud procedures or introduce a requirement similar to Modern Slavery Act reporting for large companies to report on their anti-fraud procedure.
The government will examine all options, and the reform of the law will come with new directions.
In the meantime, for more information on the issues raised in this article, please contact our White Collar Criminal Defense and Government Investigations attorneys.