UK corporate criminal liability reaches its peak: how corporates can respond to increasing exposure
4 min read
For more than 100 years, UK prosecutors seeking to bring corporate bodies to account for the criminal acts of individuals were forced to seek out the (often elusive) 'directing mind and will' of the corporate under the identification doctrine.1
In practice, it was only possible to attribute crimes to companies when they were committed by directors acting within the scope of their authority. Even in cases where it appeared a senior individual within a company was responsible for a crime, the prosecution could struggle to attribute those actions to the company, and as corporations became more complex and distributed, attributing liability in this way became more difficult.2
The 'failure to prevent' structure has proved to be a more effective tool for prosecutors since the introduction of the failure to prevent bribery offence in 2011.3 For example, the Serious Fraud Office (SFO) has been able to agree several high-profile and high-value deferred prosecution agreements (DPAs) and the Crown Prosecution Service one DPA by reference to this offence. Successive governments have built on the failure to prevent structure. In 2017, the failure to prevent the facilitation of tax evasion offences were introduced4 and most recently in 2025, a failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2023 (ECCTA).5
ECCTA also introduced a new test to attribute corporate criminal liability where a 'senior manager' commits an offence while acting in the scope of their duties.6 The test under ECCTA was limited only to underlying economic crimes such as fraud, bribery, money laundering and tax evasion.7 This section of ECCTA entered into force on 26 October 2023 and applies to conduct occurring after that date. The identification doctrine applies to conduct which took place before that date, unless the conduct was within the perimeter of a failure to prevent offence or strict liability offence.
It was always the government's intention to further widen this test, and now the Crime and Policing Act 2026 (CAPA) has finally swept away the common law doctrine (save perhaps for any hitherto discovered lacunae) repealing the ECCTA provision and applying the senior manager test to all crimes. Once the relevant section is in force (from 29 June 2026) an organisation may be held criminally liable for a criminal act committed by one of its senior managers, acting within the actual or apparent scope of their authority.
An enforcement spike?
CAPA will make it easier to prosecute corporates for a range of criminal offences and is likely to lead to an increase in corporates seeking DPAs.
All criminal enforcement agencies will be keen to find uses for CAPA as it fills in the gaps between the existing statutory corporate criminal offences. For example, when the senior manager test was introduced under ECCTA, the joint CPS and SFO corporate prosecution guidance was updated to make clear that organisations could be prosecuted under for both failure to prevent fraud and the underlying substantive fraud offences.8
It is also conceivable that corporates could face prosecution for a broader group of offences, including, modern slavery, gross negligence manslaughter, data protection or computer misuse offences. Up until now, enforcement agencies have had to grapple with the identification doctrine.
It would therefore be surprising if CAPA did not lead to an increase in prosecutions, but this is likely to take time. Complex cases will inevitably take years to work through the system and the courts will have to continue to deal with cases under the identification doctrine for years to come, but the pursuit of organisations of all shapes and sizes has undoubtedly become more likely.
How to respond
Coming so soon after the new corporate fraud offence and senior manager test were introduced by ECCTA, many organisations may be struggling to understand the ramifications of the changes under CAPA and how they should adapt to them.
The new test under CAPA increases corporate criminal liability risk for companies of all types and sizes. It does not apply only to 'large organisations', like failure to prevent fraud. There is no specific statutory defence of having in place adequate or reasonable procedures, unlike the current failure to prevent offences.
Although there is no official government guidance on how to mitigate corporate liability risk, organisations can draw on best practice and established principles of compliance to protect themselves. Given the increased risk of enforcement regarding a wide-ranging number of offences, corporates may wish to broaden their risk assessment exercise to assess who an organisation's senior managers are, along with their responsibilities and activities. That risk can then be mitigated through tools such as policies and procedures, training, communications and monitoring.
CAPA is here, but there is still time for organisations to get their houses in order and to ensure that this new compliance challenge is effectively dealt with.
1 See Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
2 See SFO v Barclays [2018] EWHC 3055. See also Horder, Jeremy, ‘The Limits of Corporate Responsibility for the Crimes of Senior Managers’ (27 June 2025). LSE Legal Studies Working Paper No. 17/2025, Available at: https://ssrn.com/abstract=5326806
3 Section 7 Bribery Act 2010 which entered into force on 1 July 2011.
4 The other being failure to prevent the facilitation of tax evasion under sections 45 and 46 of the Criminal Finances Act 2017 which entered into force on 30 September 2017.
5 Section 199 ECCTA which entered into force on 1 September 2025.
6 Section 196 ECCTA
7 See Schedule 12 of ECCTA
8 https://www.gov.uk/government/publications/joint-sfo-cps-corporate-prosecution-guidance/joint-sfo-cps-corporate-prosecution-guidance
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