The Law Commission last week confirmed that its proposals to reform the UK’s criminal liability laws are on track to be published this spring, having initially been due to be published at the end of 2021.
Reform of the corporate crime regime has been the subject of intensive campaigning in recent years. Such campaigning has been done in relation to the "identification principle" (the principle by which liability tends to be attributed to corporates in England and Wales only where the criminal conduct can be attributed to the "Directing Mind" of the company) and, in particular, the extending of the "failure to prevent" offences particular to economic crime including money laundering. Currently, the only "failure to prevent" offence for corporates is that at section 7 of the Bribery Act 2010 (Failure of commercial organisations to prevent bribery) and the Criminal Finance Act 2017 (failure to prevent the facilitation of tax evasion).
The upshot is that campaigners believe it is disproportionately difficult to prosecute large companies – where decision-making is more diffuse and it is often impossible to show the “Directing Mind” of the company was responsible; whereas it can be much easier to hold smaller companies to account where the decision making is done by the board. On this point, the Law Commission has said, indicating the direction of travel: "It is a fundamental principle of justice that everyone is equal under the law, and the impression that large companies are immune from the criminal law is liable to undermine respect for the rule of law."
However, the review of the corporate criminal liability has been ongoing for some time. The UK government began reviewing the corporate criminal liability regime in May 2016, with the Ministry of Justice publishing the first Call for Evidence in 2017, and the Law Commission being asked by the government to commence its study in November 2020.
The Law Commission’s confirmation comes after some campaigners expressed worry that the proposals would be further delayed, especially following the resignation of Theodore Agnew from government for, amongst other reasons, the government shelving plans for an economic crime bill for at least a year. In response, a spokesperson for the Law Commission has told reporters:
"We plan to publish in spring (which has always been the case, however vague it may be). It’s not correct that we’re planning to publish in June — our intention is to publish before June. However, I can confirm that any minor delays are due to internal processes, rather than policy issues."
Depending on the recommendations made by the Law Commission, companies may have to seriously start considering new compliance reviews and remediation – although certain plans to reform the economic crime regime have been shelved, the direction of travel in this space suggests reform will be forthcoming.