Corporate liability for economic crime – merely window dressing or a statement of intent

Ryder, Nicholas

Abstract

The United Kingdom’s (UK) efforts to tackle economic crime largely began with the implementation of the recommendations of the Roskill Report in 1986 via the Criminal Justice Act 1987, which created the Serious Fraud Office (SFO). The establishment of the SFO was sandwiched between the Financial Services Act 1986 and the Banking Act 1987 during an unprecedented era of banking deregulation. It wasn’t until the creation of the Financial Services Authority (FSA), following the enactment of the Financial Services and Markets Act 2000, that the efforts to tackle economic crime were revisited by virtue of the FSA statutory objective to reduce financial crime. This, combined with the extensive investigative and enforcement powers of the FSA was part of an innovative attempt to tackle economic crime that arose from within or targeted the financial services sector. Subsequently, the UK’s anti-money laundering laws (AML) were codified by virtue of the Proceeds of Crime Act 2002; the Fraud Act 2006 was introduced and followed by the much heralded Bribery Act 2010. More recently, the enforcement powers of the new city regulator the Financial Conduct Authority were extended by the Financial Services Act 2012, a new reckless misconduct offence was created by the Financial Services (Banking Reform) Act 2013 and Deferred Prosecution Agreements (DPA) were introduced by the Crime and Courts Act 2013. The aim of these measures was to prevent the UK from continuing to be Europe’s playground for white collar criminals and as a result we have seen record financial penalties imposed on companies by the city regulator for market manipulation, increased fines for weak AML systems, a record number of prosecutions for insider dealing and several DPAs. However, we are left with one pressing question, are these measures fit for purpose to hold corporations liable for economic crime? In January 2017, the Ministry of Justice published its call for evidence Corporate Liability for Economic Crime and proposed five options for reform:
1. Amendment of the identification doctrine,
2. Strict (vicarious) liability offence,
3. Strict (direct) liability offence,
4. Failure to prevent as an element of the offence and
5. Investigate the possibility of regulatory reform on a sector by sector basis.
Therefore, the aim of this paper is to critically analysis the proposals contained in the Ministry of Justice call for evidence and to determine which of these five proposals merits inclusion in the UK’s economic crime agenda.

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: 17th Annual Conference of the European Society of Criminology
• Start Date: Sep 14, 2017
• End Date: Sep 14, 2017
• Acceptance Date: Jul 6, 2017
• Publicly Available Date: Jun 7, 2019
• Peer Reviewed: Not Peer Reviewed
• Keywords: corporate economic crime, death penalty and reform
• Public URL: https://uwe-repository.worktribe.com/output/884454
• Additional Information: Title of Conference or Conference Proceedings : 17th Annual Conference of the European Society of Criminology