The bill, which had its second reading in the House of Lords on February 8, could provide the SFO with a number of significant tools if and when it becomes law, particularly with the introduction of a failure to prevent fraud offence, which is looking increasingly likely.
Reforming the law on corporate criminal liability has continually been kicked into long grass.
There may well be many in senior SFO positions – including the soon-to-depart director, Lisa Osofsky – who will be considering just how the agency can make the most of any potential advances in its enforcement capabilities as a result of the bill.
Even a cursory examination of the bill illustrates that it must be a very welcome development for the SFO.
Failure to Prevent
The most striking aspect of recent parliamentary discussions has been the potential expansion of the laws on corporate criminal liability, which could lead to the introduction of an offence of 'failure to prevent fraud, false accounting or money laundering'.
While, as ever with legislation, the devil will be in the detail, this could be a significant step for the SFO with the legislation looking to hold commercial organisations and/or their senior managers and officers to account.
To give some context to this debate, reforming the law on corporate criminal liability has continually been kicked into long grass, even though its deficiencies have been plain to see for some time now to those working within enforcement.
The government asked the Law Commission back in November 2020 to review the matter and produce options for reform.
The Law Commission’s review was published almost two years later, in June 2022, so you do have to question the government’s appetite for really dealing with this issue.
The justice select committee’s October 2022 report on ‘Fraud and the Justice System’ stated that “fraud has become the most commonly experienced crime in England and Wales, now accounting for more than 40 per cent of all recorded crime”.
Given the epidemic of fraud that we are facing in the UK, the government’s indication, following the bill’s third reading in the House of Commons, that at least a failure to prevent fraud offence would be enacted is, therefore, timely. Albeit somewhat convenient.
Just how useful the SFO may find the introduction of other failure to prevent offences (that is, false accounting or money laundering) is perhaps not so clear.
