Consultation on corporate crime law underway
A consultation by the Ministry of Justice on changes to corporate crime laws is now underway. In particular, views are being sought on whether companies can be held sufficiently to account for the criminal wrongdoing of their staff under the existing law.
Although the Criminal Finances Bill currently before Parliament would introduce a new offence for companies’ failure to prevent their employees from facilitating tax evasion, the MoJ now intends to examine the case for reform of the law on corporate liability for other economic crimes, such as fraud, false accounting and money laundering. Under the existing laws, the MoJ says enforcement agencies can struggle to prosecute companies for their role in these offences.
The call for evidence therefore seeks views on whether the need to prove the involvement of a “directing mind” is hindering the prosecution of companies for wrongdoing and, if so, what would be a “just and proportionate” alternative approach. This could include a ‘failure to prevent’ offence, along the lines of that introduced by the Bribery Act; or a US-style ‘vicarious liability’ offence, under which companies would automatically be responsible for the actions of their staff without the need to prove complicity. Alternatively, the government could consider strengthening the various regulatory regimes.