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 ECCTA is limited to economic crimes, the Government has proposed to extend the new “senior manager” test to all criminal offences under the Crime and Policing Bill 2025. For more detail, see our podcast series here and our ECCTA Fraud Prevention Toolkit.