UK plans to hold corporations to account for crimes of staff

The head of Britain's Serious Fraud Office has proposed a change to the Bribery Act 2010, seeking broader powers to get tough with corporations that fail to prevent staff from committing financial crimes.

If enacted, the measures could make it easier for the SFO to prosecute corporations, as opposed to individuals, both under the act and more generally. Considering the extraterritorial reach of the act, the proposed change will have implications for corporations that, while not registered in the UK, conduct business in or through the jurisdiction.

The difficulty for the SFO in securing convictions on the basis of corporate liability is well known, and is in stark contrast to the comparative success rate (albeit, largely negotiated) enjoyed by the prosecuting authorities in the United States in enforcing the Foreign Corrupt Practices Act.

The difficulties in bringing successful prosecutions under the Act (as with all cases of corporate liability) arise from the need to demonstrate that the corporation had the requisite criminal intent of bribing another person.

This means that the SFO must show the "controlling mind" of the corporation - namely the board of directors - knew of the bribery being perpetrated by its employees.

In practice, it is often the case that evidence cannot be secured to demonstrate that members of a corporation's board knew bribery was being committed by workers at lower levels within the organisation.