Corporate criminal liability - Have you assessed the risk?
By Hannah Piper
Recent years have seen a new form of criminal liability emerge in the UK, whereby corporate entities can be guilty of failing to prevent the criminal acts of individuals associated with them. This type of offence poses a particular risk as it can be committed inadvertently: the corporate entity does not need to intend, or even be aware of, the underlying act.
Currently, there are two corporate ‘failure to prevent’ offences in force: failure to prevent bribery (under the Bribery Act 2010) and failure to prevent facilitation of the evasion of UK or foreign tax by a taxpayer (under the Criminal Finances Act 2017). For a corporate entity to be liable:
While many corporate entities already have anti-bribery and corruption or similar policies in place, UK government guidance makes it clear that these are unlikely to amount to a defence of a criminal prosecution for the failure to prevent offences if they were not implemented following a thorough risk assessment. At a minimum, the procedures must:
The reputational consequences and penalties that follow a criminal conviction can be serious. It is therefore essential for all corporate entities to undertake thorough and regular risk assessments and ensure that their procedures are sufficiently robust to be capable of amounting to a defence. They should also look out for the introduction of further offences, currently under consideration, for failure to prevent economic crime and failure to prevent human rights abuses.
