Directors and employees beware – the dangers of accessory liability in corporate criminal cases

14 August 2012

The UK’s Bribery Act is forcing boards to deal with the risk of corporate criminal liability to an extent not felt necessary before.  Failure to do so brings with it the unwelcome prospect of dealing with criminal investigation and prosecution and potentially disastrous financial, reputational and organisational damage.  However, with the recent focus on corporate liability, the potential dangers for individuals – and not just senior officers – have been less widely discussed. 

Those who engage in criminal conduct have always been known to be at risk however it is the secondary liability under the criminal law which can catch individuals unaware. 

Secondary liability may arise for:

  • consent and connivance (for example, s.14 Bribery Act)
  • aiding, abetting, counselling or procuring an indictable offence (s.8, Accessories and Abettors Act 1861), and
  • encouraging or assisting an offence (ss.44-46, Serious Crime Act 2007)

The liability arises for both corporate entities and individuals.

Even the most fleeting glance at the law around secondary liability will show the breadth of its potential application.  Individuals working in companies which have a lax approach to compliance are particularly vulnerable: turning a blind eye to a corporate culture which allows, for example, facilitation payments to be made or signing off on excessive ‘commissions’ may attract the suspicion of prosecutors; emails encouraging a sales team to meet targets which in reality could only be reached by slipping into dishonest representations to customers may lead to an arrest and interview under police caution.

Mitigating the risk of a criminal process commencing will be the objective of a well-run company.  Attaining that objective requires a rigorous approach to compliance, focusing not just on preventing active criminal conduct but creating and maintaining a culture where individuals are aware of the wider implications of their actions – implications that may prove very serious indeed.

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