FIRMS FACE RAP FOR STAFF CRIMES
04 September 2014 -
Attorney general Jeremy Wright QC’s used his debut speech yesterday to announce plans to make firms more accountable for white-collar crime.
Companies could be prosecuted for white-collar crimes carried out by their staff under Government plans.
The proposals are designed to ensure corporate responsibilities for crimes which affect the general public.
The Coalition’s top legal officer Jeremy Wright QC made clear the Government intentions to make companies aware of the severe repercussions attributed to acts of fraud, rate rigging and money laundering by threatening to enforce section 7 of the Bribery Act.
Wright says the focus on punishing companies for corporate crime stems from mounting frustration in Westminster over the lack of individuals and companies punished for previous scandals, particularly in banking.
Pointing to the detrimental effects of the banking scandals on innocent citizens, Wright said: “Ultimately the losses will fall on members of the public, by reducing the value of investments and pension funds, or increasing the prices people pay for goods.”
Many businesses oppose the act for being unfair because it can punish a whole company for the illegal acts of just an individual employee, subsidiary or third party. But Wright says the Government viewed such a model as ideal for the new offence of “corporate failure to prevent economic crime”.
All an organisation is able to do to limit the possibility of such crimes is to have adequate procedures in place to prevent the bribe, and be able to show that in evidence if need be. Otherwise, failure to pay attention to the legislation could lead to unlimited fines.
With such proposals under the gaze of politicians, City bosses will be under more pressure to keep a stringent eye on every part of their business and on colleagues’ and employees’ behaviour.
Law firm Pinsent Masons partner Barry Vitou predicted a significant impact on corporate criminal liability.
“Business should not bury its head in the sand,” he said. “A new criminal offence of failure to prevent fraud is coming. The change will represent a seismic change in corporate criminal liability.
“The proposal has cross-party support and is now being pushed on to the Government agenda in the wake of high profile scandals and overwhelming public appetite for corporate and white-collar accountability.
“The Government and the Serious Fraud Office are ramping up the pressure on companies to disclose any wrongdoing. It's clear that businesses that do not invest in preventing white-collar crime will be most at risk. From October, the UK will also have some of the toughest fines in the world for companies breaking bribery laws.”
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