Civil Fraud Quarterly Round-Up: Q1 2021
The Modern Slavery Act 2015 (“MSA 2015”) is the first legislative framework to specifically address slavery and trafficking in the 21st Century. Commercial organisations need to understand how it affects them and what obligations it imposes.
What is it?
The seven-part MSA 2015 increases the power of law enforcement (criminal and civil) surrounding slavery and trafficking in the modern day. Hailed by the Government as significantly enhancing support and protection for victims, it “gives law enforcement the tools they need to target today’s slave drivers, ensures perpetrators can be severely punished, and includes a world leading provision to encourage business to take action to ensure their end-to-end supply chains are slavery free.”
Provisions began coming into force from 26 March of this year, with more scheduled to commence on 15 October and 1 November 2015.
The three key criminal offences contained within the MSA 2015 came into force on 31 July 2015:
An individual’s consent to travel or carry out the conduct alleged or does not prevent the offence being committed [s.1(5) and s.2(2) MSA 2015].
Slavery, servitude and forced or compulsory labour
This triable either way offence is committed where a person holds another person in slavery or servitude or requires another person to perform forced or compulsory labour, and that person knows or ought to know that the other person is being held in slavery or servitude, or is being required to perform forced or compulsory labour.
It is therefore the same as its predecessor offence (under section 71 of the Coroners and Justice Act 2009) save for the additional element that the personal circumstances of the Complainant, including any which make the individual more vulnerable (such as being a child or mental/physical illnesses), can be considered when assessing if the offence has taken place. The MSA 2015 also clarifies that the court can consider any work or services provided by a Complainant which, in the circumstances in which they were provided, amounted to exploitation. A prescribed list of circumstances is set out in section 3 MSA 2015 and includes situations where a person is induced to provide such services through to force, threats or deception.
This offence consolidates and replaces the pre-existing trafficking offences: trafficking for the purpose of sexual exploitation [s.59A Sexual Offences Act 2003] and trafficking for other forms of exploitation [s.4 Asylum and Immigration (Treatment of Claimants, etc.) Act 2004]. It is triable either way and is committed where a person arranges or facilitates the travel of another person with a view to that other person being exploited. ‘With a view’ means either the person intends to exploit the victim; or, the person knows or ought to know another person is likely to exploit the victim during/after travel. This objective and subjective mens rea is an expansion on the previous legislation that required a more difficult subjective-only test to be proved. The Government says this is to both provide consistency across the offences and avoid the ability of traffickers to argue that they did not consider the victim would be exploited – convictions can now be achieved through demonstrating simply that they ought to have known. ‘Exploitation’ is defined in the prescribed list at section 3 MSA, as referred to above.
Committing an offence with the intention to commit human trafficking
This broadens the scope of a similar existing offence under section 62 Sexual Offences Act 2003: committing an offence with the intention to commit human trafficking for sexual exploitation. Section 4 MSA 2015 broadens that remit to cover any type of exploitation. Again, it is an either way offence.
For convictions under section 1 or 2 MSA 2015, individuals now face a maximum statutory sentence of life imprisonment. This is an increase on the previous statutory maximum of 14 years for such offences (see repealed legislation: s.71(3) Coroners and Justice Act 2009 and s.59A(6)(b) Sexual Offences Act 2003).
The section 4 MSA 2015 offence remains capped at 10 years – the same statutory maximum contained within the previous legislation [s.62(4)(b) Sexual Offences Act 2003] unless it is committed by kidnapping or false imprisonment which carries the same statutory maximum as section 1 or 2 offences [s.5(3) MSA 2015].
Confiscation can be pursued [s.5 -7 MSA 2015] and compensation orders can be made through a specific ‘Slavery and Trafficking Reparation Order’ [s.8-9 MSA 2015].
Section 45 MSA 2015 provides a general statutory defence for victims of slavery or trafficking. It states that a person will not be guilty any offence if they were done under compulsion, or as a direct consequence of the person being, or having been, a victim of slavery/exploitation. Whilst slightly different considerations apply for those under and over 18, in both cases it must be shown that ‘a reasonable person in the same situation as the person having the person’s relevant characteristics’ would do as they did/have no realistic alternative to do anything else. This of course therefore carries both an objective and subjective test that will need satisfying.
This provision was brought into force not only to protect suspects from convictions for acts carried out under compulsion, but also to allow individuals to report instances of slavery or trafficking absent the threat of prosecutions being brought against them for criminal acts they may too have committed. Importantly, however, the defence will not be available for certain serious offences, including kidnap, false imprisonment or murder (full list offences at Schedule 4 to MSA 2015).
Therefore, if an individual commits an offence (any offence), which is not a listed serious offence under Schedule 4, and that offence was committed in connection with their slavery or trafficking situation then they can rely on the defence contained under s.45 MSA 2015, so long as they can satisfy the ‘reasonable person’ test. Of course, even if the defence is technically unavailable, the Prosecution retains the discretion not to prosecute if they consider it not to be in the “public interest” to do so. Read the full code test.
Slavery and Trafficking Prevention Orders can be imposed by the court upon conviction [s.14 MSA 2015]. These are civil orders which prevent a person from doing anything “which the court is satisfied are necessary for the purpose of protecting persons generally, or particular persons, from physical or psychological harm which would be likely to occur if the defendant committed a slavery or human trafficking offence” [s.17 MSA 2015].
Even where a case has not resulted in a conviction, the court can order a Slavery and Trafficking Risk Order [s.23-24 MSA 2015], whilst interim orders of both Prevention and Risk Orders can also be made prior to the main application being determined [s.21 and 28 MSA 2015].
Such orders are significant in that they can involve potential non-custodial deprivations on liberty (e.g. prohibitions on foreign travel – up to 5 years [s.18 and 25 MSA 2015]) and non-compliance, absent a reasonable excuse, is an offence in itself and liable to a term of imprisonment not exceeding 5 years [s.30 MSA 2015].
HOW WILL IT IMPACT BUSINESSES?
Slavery and human trafficking statement
With the aim of improving ‘transparency’, section 54 MSA 2015 requires commercial organisations to prepare and publish a Slavery and Human Trafficking Statement. Organisations caught by this obligation will be those that supply goods or services with a turnover equal to or greater than £36m (note, the turnover threshold will be confirmed in forthcoming regulations). It applies to corporates or partnerships so long as they are carrying on a business or part of a business in the UK.
The Statement must confirm:
Under section 54(11) MSA 2015, non-compliance permits the Secretary of State to bring a civil injunctive action in the High Court.
The content and the detail of such a statement remains within the discretion of each qualifying organisation, with the MSA 2015 specifying only what an organisation ‘may’ include [s.54(5) MSA 2015]. Regardless of the content however, each relevant organisation has to, without qualification, publish their statement on their website and provide a link to it in a “prominent place” on their homepage [s.54(7) MSA 2015].
Whilst the commencement date of this provision is yet to be announced, it is recommended that businesses take specific legal advice to ensure they are meeting the obligations imposed on them by this new provision. Businesses will no doubt be concerned by the commercial and reputational damage a ‘no steps’ Statement may have on their business.
Corporate criminal liability
Companies should not assume that their responsibilities end once their Statement has been published. Subject to rules of attribution, Companies remain at risk of corporate criminal liability for offences committed pursuant to sections 1, 2 or 4 MSA 2015. What investigations were made will be scrutinised when assessing if a Company Defendant knew, or ought to have known, that an offence was being carried out. The objectification of the subjective part of this mens rea is crucially important. It means that the offence can be proved even without evidence of actual knowledge. So long as a person should have known because a reasonable person would have then the mental element of the offence is made out. If the courts have decided that a corporate entity can commit an offence of harassment – that has the same objective/subjective mens rea test (see Kosar v Bank of Scotland (trading as Halifax)  EWHC 1050 (Admin)) – then they could do the same with the MSA 2015.
Turning a blind eye is not an option. Understanding the legislation is essential.
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