Further expansion of corporate criminal liability – the UK Crime and Policing Bill

In December 2023, under the Economic Crime and Corporate Transparency Act 2023 ("ECCTA"), the UK introduced a significant change to the way in which criminal liability may be attributed to corporate entities. Prior to that time, a company could only commit a criminal offence requiring a particular mental state (knowledge, recklessness etc.) if the mental state of a senior person representing the company's "directing mind and will" would be attributed to the company. This had typically been considered to require one or more members of the board to hold the requisite mental state.

ECCTA broadened the scope of the so-called "identification doctrine" by providing that, if a senior manager of a body corporate or partnership, acting within the actual or apparent scope of their authority, commits a "relevant offence", then the organisation will also be guilty of that offence. "Relevant offences", listed in a schedule to ECCTA, are focused on economic crime and therefore cover offences such as bribery, money laundering, and breach of financial sanctions.

We covered the detail of the identification doctrine reforms in our previous post and also discussed these changes on our podcast. Listeners of that podcast episode may recall that we mentioned that there was a bill before Parliament in 2024 which would have expanded the identification doctrine reforms to cover all crimes, not just economic crime as set out in ECCTA. That Bill ultimately did not proceed, due to the dissolution of Parliament following the 2024 general election, however, a new Crime and Policing Bill (the "Bill") has recently been introduced by the Home Office, including the same proposed expansion of the ECCTA "senior manager" rule.

Clause 130 of the Bill provides that, where a senior manager acting within the actual or apparent scope of their authority commits an offence, the organisation also commits the offence. This is subject to the same jurisdictional scope as the ECCTA reforms, in that an organisation will not commit an offence if: (a) all of the conduct constituting the offence occurs outside the UK; and (b) the organisation would not commit the offence if that conduct were the organisation's rather than the senior manager's. The new provisions would, if enacted, replace the existing "senior manager" provisions within ECCTA.

The Bill is scheduled to have its second reading on 10 March and is at the relatively early stages of the legislative process, so it is not yet clear when/in what form these amendments may come into force.  If enacted, there is scope for this to, once again, expand the potential scope of corporate criminal liability by dramatically increasing the range of offences for which an organisation may be liable, subject to the requirement that the relevant senior manager was acting within the actual or apparent scope of their authority when they committed the offence. This requirement means that it is not immediately obvious how companies might become liable for certain types of offences (such as offences against the person) committed by senior managers – it is difficult to foresee a scenario where an individual could be said to be acting within their authority as a manager when assaulting another person for example. However, there will be other offences (e.g. environmental offences) where it is more feasible that an individual could be said to be acting within their authority as a manager and thereby increase the risk of liability for their employer.

Companies should therefore continue to follow the progress of the Bill and any changes to these provisions – we will of course continue to provide updates on our blog.