UK Policy and Regulatory Alert
By: Dylan G. Moses, Michael E. Ruck, Rosie Naylor, Joseph K. Skilton
On 26 October 2023, the Economic Crime and Corporate Transparency Act (the Act) became law. Under the Act, corporations will become criminally liable for the acts of their “senior managers” as well as for any failure to prevent their employees and associates from committing fraud. Together, these two reforms will significantly expand the exposure of corporates to criminal prosecution. This briefing explains these reforms, analyses their impact, and considers what corporates need to do to comply.
Presently there are three ways corporates can become criminally liable: (a) by the identification doctrine, (b) through vicarious and strict liability offences, or (c) through specific offences created by parliament, such as corporate manslaughter or failure to prevent bribery.
However, there has been growing momentum to reform the corporate criminal liability regime in the United Kingdom. This momentum principally derives from a sequential three-factor problem: difficulty in bringing corporate criminal prosecutions has led to poor enforcement outcomes which have created an accountability “loophole” whereby large multi-national companies with complex and diffuse structures and hierarchies are not prosecuted. Behind each of these factors, though, is the underperformance and...
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