Corporate Criminal Liability

From 26 December 2023, there is a new test for determining whose actions can cause a company or partnership to commit an economic crime. ECCTA added a lower threshold to the previous common law test, which requires the person committing an offence to be the company's "governing mind and will" for the company to be liable. Now, the actions of any "senior manager", as defined in ECCTA, can enable the organisation to be convicted.

A "senior manager" is defined as someone who plays a significant role in managing or organising, or making decisions about the management or organisation of, a substantial part of the organisation's activities. Who will be a "senior manager" within any organisation will be highly fact-specific, but it could include senior individuals in organisation-wide roles such as compliance and HR, as well as managers of significant sites, for example.

The intention is to facilitate the prosecution of more companies for a wide range of economic crimes and the SFO's General Counsel, Sara Lawson KC, has said: "the number of people in a company whose criminality can now be attributed to their employer has increased significantly".

Although the senior manager test under ECCTA applied only to economic crimes as set out in Schedule 12 of the Act, this is repealed and replaced as of 29 June 2026 by the Crime and Policing Act 2026. From that date, the senior manager test applies to all criminal offences and so organisations could be liable for any crime committed by a senior manager if the conduct was within their apparent authority.