English Law Commission Options Paper on Corporate Criminal Liability

The Law Commission of England last week published its proposed options for the UK government on how it can ensure that corporations are held accountable for committing serious crimes such as fraud.

The paper is part of a larger review of corporate criminal liability that the Law Commission has been asked to do by the government. 

The paper offers ten reform options:

1. Retain the current general rule of criminal liability applied to corporations – the “identification doctrine” – as it stands.
2. Allow conduct to be attributed to a corporation if a member of its senior management engaged in, consented to, or connived in the offence. This could be drafted so that chief executive officers and chief financial officers are always considered part of senior management.
3. Introduce an offence of failure to prevent fraud by an employee or agent. This would apply when the company has not put appropriate measures in place to prevent their own employees or agents committing a fraud offence for the benefit of the company.
4. Introduce an offence of failure to prevent human rights abuses.
5. Introduce an offence of failure to prevent ill-treatment or neglect.
6. Introduce an offence of failure to prevent computer misuse.
7. Make publicity orders available (requiring the corporate offender to publish details of its conviction) in all cases where a corporation is convicted of an offence.
8. Introduce a regime of administratively imposed monetary penalties.
9. Introduce civil actions in the High Court, with a power to impose monetary penalties.
10. Introduce a reporting requirement requiring large corporations to report on anti-fraud procedures.

The paper compares the situation in the UK with that of Australia and Canada.

It is now for the Government to review and consider the options paper.