For corporations facing a criminal prosecution, the potential consequences can be devastating, including adverse publicity and significant reputational harm that might damage the confidence of customers, investors and other companies they may be working with. In addition, the lengthy investigation and prosecution process can be stressful for those involved and the business could incur substantial legal costs. Any fine that might be imposed upon conviction could be substantial, as for some offences the fine is unlimited.
Corporate crime can be described as criminal acts carried out by individuals in the course of their employment by an incorporated body for the benefit of that organisation. Even though individuals are likely to have been involved in the commission of any criminal acts that have benefitted a corporation, and these people can be prosecuted on an individual basis, corporate crime refers to prosecutions where the organisation itself is the defendant. ‘White-collar crime’ is a term which covers economic crimes such as fraud and insider trading, where the occupation of an individual allows them to commit economic crimes for their personal benefit, often to the detriment of their employer, or the people or businesses that deal with that organisation.
How we can help
If your business is facing an investigation and possible prosecution that might lead to corporate criminal liability, call us now. We will thoroughly investigate your case, examining every aspect of the evidence and giving you the right advice when you need it most.
An experienced QC, Barrister or Solicitor-Advocate will lead your case so you know the advice and representation you receive is of the highest quality. We will also advise you if we think forensic experts and specialist investigators could assist you in your case. Using industry recognised experts, we can assess the harm done by any criminal activity that is alleged to have taken place.
We can then initiate dialogue with the prosecuting authority and make representations to them in respect of your matter when appropriate. It may be that they subsequently decide that no further action is necessary, particularly if every effort to prevent future breaches has been made. In certain circumstances, we can explore the possibility of entering into a deferred prosecution agreement with the prosecuting authority.
Throughout your instruction we will maintain your confidentiality at all times and can advise and support you in terms of media management, as we understand the impact that allegations of criminal behaviour can have on your business and the individuals involved.
Specific corporate offences
In recent years, corporate crime has come under increased public scrutiny in the United Kingdom. This has led to the creation of new offences that only apply to corporate bodies, and also the introduction of deferred prosecution agreements that can apply when criminal offences are committed by companies. In 2007 the Corporate Manslaughter and Corporate Homicide Act created the offence of corporate manslaughter, whilst in 2010 the Bribery Act created the offence of failing to prevent bribery. On the 27th April 2017, the Criminal Finances Act gained royal assent, creating two new corporate offences of failure to prevent facilitation of (UK or foreign) tax evasion.
Corporate bodies have a defence to the ‘failing to prevent’ offences if they have put in place reasonable “prevention procedures” to prevent criminal activity that are proportionate to the risks they face. For the most recent offences dealing with tax evasion, HMRC has provided a draft guidance which includes six guiding principles for effective prevention policies:
- Risk assessment
- Proportionality of risk-based prevention procedures
- Top level commitment
- Due diligence
- Communication (including training)
- Monitoring and review
The full guidance can be accessed at: https://www.gov.uk/government/consultations/tackling-tax-evasion-a-new-corporate-offence-of-failure-to-prevent-the-criminal-facilitation-of-tax-evasion
For more information on how we can advise your organisation in respect of prevention procedures, call us now on 01223 632420.
Offences involving senior individuals in a corporate organisation
The targeting of criminal acts by corporations through new offences is also partly an attempt to overcome the traditional problem that existed in respect of proving the mental element in economic crimes. Prosecutors had often found it very difficult to attribute what is essentially a human state of mind (such as intention or dishonesty) to a corporate body.
The ‘identification principle’ allowed the mental element of economic crimes to exist if it could be shown that the individuals involved in the offence were also the company’s ‘directing mind and will’, people of sufficient seniority such those close to or at board level. Historically, this has proven a difficult evidential burden to overcome for prosecutors in all but the more straight-forward cases.
However, just because an investigating authority might struggle to prove corporate criminal liability does not mean that they would not prosecute the individuals involved in the offence. If you or your business are facing any allegations of criminal wrongdoing, call us now on 01223 632420
Regulatory corporate criminal liability
In areas where there is regulatory – criminal overlap such as in environmental or health and safety law, strict liability offences are more common and companies can be prosecuted for offences that require no mental element under the principle of “vicarious liability”. This type of criminal prosecution is more common for businesses to face. Examples of the kind of offence that would lead to a prosecution could include a companies’ poor compliance with health and safety regulations that causes an accident, or where a business pollutes the environment in breach of regulations.
Depending on which regulation was breached and the seriousness of the allegation, the investigating authority may decide to bring a criminal prosecution against the offending business. If you or your business are facing a prosecution for a regulatory breach or a breach of duty call us now on 01223 632420.
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