Corporate Crime And The Senior Manager Test

• Published date: 26 September 2025
• Subject Matter: Corporate/Commercial Law, Criminal Law, Corporate and Company Law, Directors and Officers, Contracts and Commercial Law, Corporate Crime, Shareholders
• Law Firm: BCL Solicitors LLP
• Author: Mr Tom McNeill

The Crime and Policing Bill 2025 expands liability, raising fresh debates over fairness, corporate culture, and culpability.

Some of the best discoveries are made through errors: Alexander Fleming, as everyone knows, discovered penicillin having neglected his Petri dish! So, it was a delight to read in the Crime and Policing Bill 2025 the proposal to make organisations criminally liable for any offence committed by a senior manager while acting within the actual or apparent scope of their authority (the 'senior manager test').

Various commentators have pointed out the unfairness (even absurdities) that could arise by not including an 'intending to benefit the organisation' provision. What if the senior manager were acting purely in their personal interest, where the organisation received no benefit? Indeed, what if the organisation were the victim of the senior manager's crime? What about offences such as dangerous driving (committed by a senior manager during the course of employment)? It would be absurd for a company to be convicted of dangerous driving, would it not?

In fact, an organisation would be very unlikely to be pursued (successfully) for dangerous driving - courts have repeatedly held that offences requiring physical acts such as driving, assault, or sexual offences, by their nature can only be committed by natural persons - although there would be some risk here, unless the drafting is clarified. More to the point, by tugging on the threads of legal principle, it becomes apparent that we gave up on coherence some time ago.

And if incoherence (and unfairness) are no longer bars, why not look through the other end of the telescope? Why not follow the wording, and the logic, to its natural conclusion, and explore the merits of a more inclusive approach to corporate criminal liability?

Why corporate criminal liability?

Limited exceptions aside, it was only from the 1940s that courts found a way to hold corporates criminally liable. Previously, the generally accepted position was that a corporation was not indictable but the particular members of it were; and so notorious was the irresponsibility of corporations that Lord Thurlow, Lord Chancellor late in the eighteenth century, was credited with asking: 'Did you ever expect a corporation to have a conscience when it has no soul to be damned, and no body to be kicked?'

The difficulty in holding corporates criminally liable is that many criminal offences require a 'guilty intent'; and how can a corporation have such an intent? The solution, found in the context of the civil law of tort, was most famously explicated by Viscount Haldane LC in the House of Lords case of Lennard's Carrying Co, Ltd v Asiatic Petroleum Co. Ltd [1915]: 'A corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.'

In the criminal context, the identification (or directing mind) principle, as it came to be known, requires the prosecution to first establish that an individual who was a 'directing mind' of the company (typically a...