The Law Commission has published a discussion paper seeking views on whether, and if so, how, the law relating to corporate criminal liability can be improved so that it appropriately captures and punishes criminal offences committed by corporations and their employees.
The main issue is how to better hold large companies to account for criminal conduct, with focus on the fairness of the “identification principle” through which only the acts of senior individuals representing the company’s “controlling mind and will” can be attributed to the company, and the potential expansion of “failure to prevent” offences to fraud and other economic crime.
And watch out - there's also a question about whether there would be merit in adopting the US concept of respondeat superior - a strict liability concept used to hold companies criminally liable for criminal activities of an employee, representative or agent acting in the scope of their employment or agency.
The Law Commission notes competing concerns that alternative models for assessing the criminal liability of corporations may place a disproportionate and costly compliance burden on law abiding businesses.
The consultation is open until 31 August 2021.
“In their current form, there is concern that the law on corporate criminal liability does not always appropriately criminalise corporate misbehaviour, especially when applied to large corporations. At the same time, it is important to ensure that any reform does not impose an undue burden of compliance on companies. “Input from stakeholders will help us to provide options to Government to ensure the appropriate basis of corporate criminality, while avoiding disproportionate compliance costs.”