The long-awaited Law Commission consultation on corporate criminal liability was published on 9 June. The Law Commission notes that companies can only be found guilty of offences that require proof of a certain mental state where someone who represents the company’s “directing mind and will” has that state of mind. There have been concerns for years that, where especially larger entities have a complex decision making structure, this “identification principle” cannot easily apply. Only in recent years have the “failure to prevent” offences in the Bribery Act and in the Criminal Finances Act in relation to facilitation of tax evasion moved to address the problem.
The Law Commission is now reviewing which other offences these FTP offences could be extended to cover. Among the possibilities (many of which were mooted as part of the debates towards the FS Act 2021) are:
- extending to all economic crimes for which a DPA is available;
- whether there should be an “adequate” or “reasonable” prevention procedures defence;
- whether the offence should be limited to the conduct of associated persons – or, for example, would it be appropriate to expect some institutions to prevent crime being committed using their services;
- the role of government guidance; or
- the SFO suggestion that the FTP offences create a model for a new principle that would replace the identification doctrine.
The paper considers a range of related topics, such as the use of DPAs, liability of directors through “consent or connivance” provisions and the experience in other jurisdictions.
The deadline for comments is 31 August.