In January 2017, the UK Government launched a call for evidence on corporate criminal liability for economic crime. On 3 November 2020 the UK Government published its response, which can be found here. In summary, the Government does not intend to proceed with immediate legislative reform but has instead commissioned the Law Commission to undertake a review of the identification doctrine, with a particular focus on economic crime.
The call for evidence focused on problems with criminal offences designed to punish and prevent economic crimes such as fraud, false accounting and money laundering. In particular, it sought input on whether the common law ‘identification doctrine’ was deficient, particularly in the context of prosecutions against large modern companies.
The identification doctrine sets out the test for attributing liability to a company. Under the doctrine, the acts and state of mind of individuals representing the company's "directing mind and will" will be attributed to the company. Where these are criminal in nature, criminal liability may be attributed to the company itself.
Options for reform
The call for evidence set out a number of possible options for reform, including potential legislative reform such as introducing a new vicarious liability offence, which would make the company guilty through the actions of employees, representatives or agents, or imposing a failure to prevent offence along the lines of the existing section 7 of the Bribery Act 2010.
Three quarters of responses to the call for evidence agreed that the identification doctrine inhibited holding companies to account for economic crimes and many respondents "emphasised the difficulty associated with applying the doctrine to large and multi-national companies", which have much more complex management structures. The response also stated that most respondents (61.8%) had "expressed the view that deficiencies in the identification doctrine could not be effectively remedied by legislative or non-legislative means, other than the creation of a new offence."
Comment
Despite a majority of respondents agreeing that there are severe limitations to the identification doctrine in bringing corporate prosecutions, as well as evidence of this from recent high profile judgments such as in the SFO case against Barclays, the Government has elected not to take any immediate steps to reform the law.
Instead, the Law Commission will undertake a detailed review of the identification doctrine, with a particular focus on economic crime. No date has been indicated for when the commission will report, although the response states that the Law Commission's scoping work will take between 12 and 15 months.
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