In May 2016, Prime Minster David Cameron hosted the UK Government's first international anti-corruption summit and pledged to lead the fight against economic crime. As part of the initiative Cameron announced plans for new corporate criminal offences of failure to prevent economic crimes. The offences would be framed in a similar way to s.7 Bribery Act 2010 pursuant to which a company can be convicted of failing to prevent bribery. Although similar new laws have been planned in respect of tax evasion for over a year, Cameron's announcement marks an intention to bring in laws which are far more wide ranging.

One of the problems faced by prosecutors in the UK under existing laws, and a driver behind the reforms, is the need to identify criminality on the part of individuals who are sufficiently senior to constitute the controlling mind of the company before that company can be held criminally responsible for their acts. The proposed offences are likely to be framed in a way which eliminates the need to establish any individual's responsibility.

Consequently, it should be easier for prosecutors to secure a conviction than is currently the case. However, for any corporate guilty of the new offence it of course remains the case that an individual will bear responsibility. Principally, this may be the board member with responsibility for oversight of the relevant corporate governance function that has "failed" and resulted in the company conviction.

Perversely, as the new corporate offences should be an attractive course for prosecutors to follow, although those offences are directed towards the corporate entity, what are increasingly likely to follow are claims against responsible directors, either regulatory, or by the company for breach of duty.

Given that the offence does not require an allegation of a wrongful act on the part of an individual, any legal costs incurred by an individual director otherwise caught up in the proceedings are likely to fall within the terms of a D&O policy providing an extension for investigations. As and when the new laws are drafted, underwriters should check that their wordings are sufficiently clear on the cover that is (or is not) provided for such actions.