This is the latest in a series of moves by the government to repair trust in business and improve accountability, which has included new measures in the Financial Crime Bill to penalise firms who fail to prevent staff conducting tax evasion.
The justice minister Oliver Heald said companies must be held to account for the criminal activity that takes place within them.
“Corporate economic crime undermines confidence in business, distorts markets, and erodes trust. I want to restore public faith in business and make sure we have the right tools available to crack down on corporate criminality,” he said.
Last year the government moved to prepare a new law making senior management of a financial services firm criminally liable if any member of staff facilitates tax evasion.
Reforms to current laws
On Friday, it said it would now hold a consultation on whether successful convictions are being hindered by prosecutors needing to prove the “directing mind and will” of businesses undertaking criminal activity.
It wants to find out if there is potential to reform the law in areas of economic crime other than bribery and tax evasion, so as to provide a just and proportionate method of holding companies to account.
The call for evidence seeks views on:
- Whether the need to prove the involvement of a “directing mind” in corporate offending is hindering the prosecution of companies for wrongdoing.
- Alternatives to proving “directing mind” complicity in corporate criminal conduct, including:
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- a US-style ‘vicarious’ liability offence, making companies guilty through the actions of their staff, without the need to prove complicity,
- the failure to prevent model, whereby a company is liable unless it shows it has taken steps to prevent offending, and
- the benefits of strengthening regulatory regimes.
This call for evidence will run until 24 March 2017.
