SFO proposes increasing corporate fraud liability

Tightening corporate fraud liability

Corporate Crime analysis: Can companies be held criminally liable for failing to prevent fraud or theft by their employees? Satnam Tumani, litigation and dispute resolution partner at Kirkland & Ellis LLP, explains the SFO's proposals.

Original news

SFO proposes increasing corporate fraud liability, LNB News 06/06/2013 87

Financial Times, 6 June 2013: Under new proposals by the Serious Fraud Office companies who failed to prevent fraud or theft by their employees would be criminally liable.

What are the limitations in the scope of the existing laws on corporate fraud liability?

Companies are generally treated as separate legal entities in UK law and, in many instances, are subject to the provisions of the criminal law. The basis upon which a company can be said to have transgressed depends on the relevant criminal statute. In some instances a company can face strict liability for the acts of its employees, while in others it may face potential liability for failing to manage the risk of employees engaging in prescribed behaviour or in some failure to take proper care.