After months of waiting, the Government has finally announced that they are going to look at the problem of prosecuting companies for ‘economic crimes’. Their Call for Evidence will focus on white collar crimes like fraud and money laundering.
We can give ourselves at least a partial pat on the back for this. Traidcraft’s Justice Matters petition over the summer, and campaigners’ emails to Prime Minister May, have raised the issue of how we can more effectively hold companies to account up the political agenda. Traidcraft is even named as an interested party in the Government’s document.
The move has also been prompted by the frustration of the Serious Fraud Office and others over how current UK law works. At the moment it is extremely difficult to prosecute companies because you have to prove the involvement or complicity of the senior management. This means that boards and senior managers are often deliberately kept in the dark about areas of risk - clearly not a good way for global companies to operate. It also makes it much harder to secure prosecutions against large and complex companies, compared to smaller ones.
Because of this current model the UK authorities were not able to prosecute the banks involved in the LIBOR scandal - instead the cases were heard in the United States where the law is different. It also meant that while individuals were prosecuted for phone hacking, the companies that owned the newspapers were not.
Through the consultation, Traidcraft will press for a new model which places the onus on the company to get proper systems in place to prevent crimes from happening for their benefit. We will also give evidence to demonstrate the connection between the ‘economic crimes’ which the Government are interested in and the more direct crimes, including causing serious injuries, deaths and widespread pollution, which we want to see ended. And we’ll also be making the case that the law needs updating so we can better tackle all corporate crimes, not just economic ones, wherever they take place.