In the House of Commons debate of the Economic Crime and Corporate Transparency Bill on 25 January 2023, Robert Buckland MP proposed an amendment introducing a new criminal corporate offence for failure to prevent fraud, false accounting and money laundering.
The amendment would have made a relevant commercial organisation (C) guilty of a criminal offence where it could be proved that a person (A) associated with that organisation committed one of the three offences intending to confer a business advantage on C or a person to whom A provides services on behalf of C.
There has been a great deal of consultation on this particular issue. In 2017 the Ministry of Justice published a call for evidence on corporate liability for economic crime, seeking evidence and examples of the problems with criminal offences designed to punish and prevent economic crimes such as fraud, false accounting and money laundering. In its response published in 2020, the Government concluded that as there had been no convincing majority on a preferred way ahead, there was no basis on which to make legislative changes to the criminal law and instead the Law Commission would be asked to undertake a detailed review of the identification doctrine, with a focus on economic crime.
The identification doctrine requires that for a corporation to be criminally liable one or more natural persons representing the “directing mind and will” of the organisation must be identified and must have the required element of fault. In Serious Fraud Office v Barclays  EWHC 3055 (QB) it was held that the individual in question must also have the requisite status and authority in relation to the particular conduct, and that if they do not then the company will not be criminally liable.
Circumstances that make for a successful breeding ground for economic crime often include complexity and opaqueness of structure, whether hierarchical or financial. But such intricate structures and complicated divisions of responsibility are the norm in modern multinational organisations, and the reality is that in this way the directing mind can be shielded from any attribution of intent. In this context, the identification doctrine can be seen as an impediment to successful prosecutions. Speaking in 2018, David Green, former director of the SFO, stated that evidence of economic crime, “tends to dry up at middle management level”, making it virtually impossible to find a controlling mind and then prove that they were complicit in any criminality. A new offence or offences of failure to prevent economic crime, following the precedent set by the Bribery Act 2010, could be the next logical step in the fight against fraud, a fight which the UK is widely perceived to be losing.
One of the recommendations in the Law Commission’s options paper, published on 10 June 2022, was for a new offence of failure to prevent fraud. It was against this backdrop that Robert Buckland MP’s amendment was tabled. However, following assurances made by the Minister of State for Security that the government would “address the need” for such legislation, the amendment was withdrawn.
The Bill is due for its second reading in House of Lords on 8 February. In light of the comments made by the Minister of State for Security, it seems likely that we will see an amendment proposed at the Committee or Report stage, given what appears to be an increasing level of political will to give prosecutors the tools they need to do their job effectively.
 Tesco Supermarkets Ltd v Nattrass  AC 153