On December 18 2014 the government published its Anti-corruption Plan (for further details please see "The government's Anti-corruption Plan"). The plan recognises that bribery and corruption are live issues across the public and private sectors and seeks to make the United Kingdom a leader in the global effort to combat them.
Of particular interest is Action 36 of the plan, relating to the Ministry of Justice examining the case for a new offence of corporate failure to prevent economic crime and the rules on establishing corporate criminal liability more widely. Although the timescale for this action was stated as June 2015 – and as of July 9 2015 the work relating to this was "progressing and any announcements and decisions will be made in due course" (as stated in a parliamentary response(1) to a question relating to the proposed offence) – no further work will apparently be carried out. This was stated on September 28 2015, but only in a written response(2) from Minister for Prisons, Probation and Rehabilitation Andrew Selous to a question from Member of Parliament Byron Davies. Ministers had apparently decided to not to carry out further work at this stage, as "there have been no prosecutions under the model Bribery Act offence and there is little evidence of corporate economic wrongdoing going unpunished".
This response was made before the first deferred prosecution agreement was approved relating to Section 7 of the Bribery Act and the first guilty plea for such an offence was entered shortly thereafter (for further details please see "First deferred prosecution agreement concluded" and "Section 7 of Bribery Act in spotlight"). Notably, SFO Director David Green had hoped that there would be an extension of the law on corporate liability to assist in the use of deferred prosecution agreements. In his report to the 33rd Cambridge International Symposium on September 7 2015, Green said that there is a necessary step to make deferred prosecution agreements mainstream, which involves moving away from the identification principle of corporate criminal liability in English law and embracing something closer to vicarious liability, as in the United States. He explained that until this is done, a corporate might conclude that if the prosecution of a company is so difficult under English law, why should it agree to a deferred prosecution agreement?
It appears that, contrary to Green's hopes, the law on corporate criminal liability will not be extended at this stage; although it remains to be seen whether the recent deferred prosecution agreement and guilty plea mean that further work will now actually be carried out. Green's views clearly have not changed, as he took the opportunity to repeat the need for a new law in a newspaper interview(3) on January 5 2016.
For further information on this topic please contact Kathleen Harris at Arnold & Porter LLP by telephone (+44 20 7786 6100) or email (firstname.lastname@example.org). The Arnold & Porter website can be accessed at www.arnoldporter.com.
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