Is failure to prevent fraud the future direction of corporate liability?
Craig Hogg and Caroline Timoney of Peters & Peters discuss in IFA Magazine.
Earlier this month Max Hill QC, Director of Public Prosecutions for England and Wales, and Lisa Osofsky, director of the Serious Fraud Office (SFO), spoke at the 39th Cambridge International Symposium on Economic Crime where both expressed their support for expanding the corporate ‘failure to prevent’ (FTP) model to wider economic crime including fraud.
These comments were hardly ground-breaking: the possibility of expanding the FTP model beyond current bribery and tax offences has been under consideration in the UK for a number of years, and the Law Commission has complied an Options Paper into the subject which is now with the Government to review.
But is making corporates potentially liable for failing to prevent fraud taking place within an organisation a viable option for legislators?
Currently, there are two FTP offences on the UK statute books which corporates need to be wary of: failure to prevent “associated persons” from committing bribery, and separately, failure to prevent the facilitation of tax evasion committed on a corporate’s behalf.
Read more on IFA Magazine.