Corporate Criminal Liability: A Response To The Law Commission's Discussion Paper ' Part One: Some Points Of Principle

• Published date: 15 September 2021
• Subject Matter: Corporate/Commercial Law, Criminal Law, Corporate and Company Law, Corporate Crime
• Law Firm: BCL Solicitors LLP
• Author: Mr John Binns

Following an earlier call for evidence in 2017, the Law Commission has been tasked with considering options to reform the law on when and how companies should be held liable for criminal offences. Earlier this year it published a discussion paper and invited responses to 13 questions.

A clash of concepts

When should a company (or other 'non-natural person') be deemed guilty of a crime? The answer is far from obvious. As a starting point, the concepts of 'corporate personality' and 'crime' do not seem easily compatible. The first is a convenient legal fiction, enabling shareholders to make their capital work for them in a way that limits their personal liability; the second is a moral judgement on behalf of society at large, a public statement that certain conduct merits condemnation and punishment. Where the two concepts meet is those scenarios where the legal fiction interferes with the process of moral judgement (for instance, where a company does harm in ways that are hard to attribute to particular individuals), or, conversely, enables it (by way of public statements about, and remedial steps by, companies, which might not be achievable by prosecuting individuals). With that in mind, a handful of points of principle should be noted from the outset in the context of the Law Commission's discussion paper about changing the basis of corporate criminal liability in the UK.

A complicated picture

First, criminal offences in the UK vary in a number of ways that are significant in this context, including their fault element (as focused on by the discussion paper), as well as whether they are typically committed by omissions rather than acts (as in, for instance, corporate homicide, health and safety offences, and breaches of money laundering regulations), and whether they can be dealt with otherwise than by criminal prosecution (for instance by civil penalties, Deferred Prosecution Agreements (DPAs), or regulatory steps, such as suspending, varying or withdrawing of licences or registrations).

In a related point, some companies are more regulated than others, as society has made judgements about the extent and nature of their responsibilities, based on the sectors in which they operate. A company that manufactures or supplies medicines, for instance, will face a set of responsibilities (many of them backed with criminal penalties for breach) on top of those applying across all sectors (like bribery or financial sanctions). We do not start with a level playing...