Corporate criminal liability

Corporates in themselves can’t think or act – it’s their members, employees or directors that do so. But they generally are legal persons, so can commit crimes.

As crime is devolved in Scotland and Northern Ireland, this briefing focuses on England and Wales. In England and Wales there are three ways a corporate can be prosecuted for a criminal offence committed by those acting on its behalf:

1. Where Parliament has created a specific criminal offence for corporates, such as under the Bribery Act 2010 or the Criminal Finances Act 2017;
2. Through vicarious liability, which is generally used for regulatory offences that don’t require proof of mental fault; and
3. Through the identification doctrine, when someone who can be said to be the “directing mind and will” of a corporate commits the offence.

Successfully prosecuting large corporates in particular has been challenging, leading to concern that the UK is falling behind internationally in tackling corporate crime. The identification doctrine has been interpreted narrowly by the courts, as shown in the recent Barclays case, and vicarious liability is limited in its scope. As a result there has been pressure from politicians and campaign groups to expand the first option – for Parliament to intervene and reform corporate criminal liability.  

In its response to a Call for Evidence on this issue in November 2020, the Government said it had not identified a clear consensus on the best path for reform, and has asked the Law Commission to undertake a review, that will include examining whether the identification doctrine is fit for purpose. The Law Commission expects to report back with an Options Paper in late 2021.

In the meantime, there has been continued pressure on Government from within Parliament to move more rapidly, most recently through unsuccessful amendments tabled during the passage of the Financial Services Act 2021.

For wider information about economic crime in the UK, see our briefing Economic crime in the UK: a multi-billion pound problem.