Source · Select Committees · Justice Committee
Recommendation 37
37
Acknowledged
Paragraph: 146
Failure to prevent fraud' offence could improve corporate behaviour and prevention efforts.
Conclusion
The ‘failure to prevent’ offence for bribery has had success in driving better corporate behaviours. A similar offence for failure to prevent fraud being perpetrated using a company’s platforms would not only aid prosecution for these failures but focus private sector effort on designing fraud out of companies’ systems.
Government Response Summary
The government recognises the limitations of current corporate criminal liability laws and is considering the Law Commission’s paper from June 2022 to strengthen the law, including the creation of a 'failure to prevent fraud' offence. It also highlights the Online Safety Bill's new duty on companies to prevent fraud on their platforms.
Paragraph Reference:
146
Government Response
Acknowledged
HM Government
Acknowledged
The Government recognises that the current law on Corporate Criminal Liability does not adequately hold organisations and their senior persons to account for offences committed by the corporation and their their associated persons. In November 2020, the Government asked the Law Commission to do a thorough examination of the issue and present options for reform. This review was published in June 2022. We are working in collaboration with colleagues across Government to consider the Law Commission’s paper and determine a case for strengthening the law on corporate criminal liability, including the creation of an offence for failure to prevent fraud. Similarly, the Online Safety Bill will, for the first time, create a duty on social media and search engine companies to put into place systems and processes to prevent fraud on their platforms. Ofcom will have extensive powers to enforce this duty, including significant fines and business disruption.