On 9 June, the Law Commission, which advises on legislative changes in England & Wales, issued a Discussion Paper on whether, and how, the law relating to corporate criminal liability can be improved so that they appropriately capture and punish criminal offences committed by corporations, and their directors or senior management.  It says that it is clear that there are issues across a range of offences that undermine the ability to effectively hold organisations to account for crimes committed.  One major factor identified is the requisite guilty state of mind – known as the “identification principle”.  For example, it explains, if the sole director of a company were fraudulently to increase the value of an invoice sent by the company, the company, as well as the director, could be found guilty of fraud.  However, there are concerns that the identification principle does not adequately deal with misconduct carried out by and on behalf of companies – especially larger organisations – with complex decision-making structures.  This leads to it being easier to identify and prosecute those in charge of smaller companies.  The Discussion Paper also mentioned “failure to prevent” offences, and which further offences might be covered by any new corporate failure to prevent offence, and what costs the introduction of such a new offence or offences would have for law-abiding businesses.  Responses to the Discussion Paper will inform the Law Commission’s options paper that will be provided to the Government towards the end of 2021.  Responses are necessary by 31 August.

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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