Landmark reforms proposed under the Crime and Policing Bill 2025 could significantly expand corporate criminal liability in the United Kingdom, potentially exposing businesses, both domestic and international, to a broader range of criminal prosecutions based on the actions of their senior managers.

The proposed reforms, currently under parliamentary scrutiny, aim to strengthen the UK's approach to white-collar crime and close long-criticised loopholes in the current corporate liability framework. If enacted, the legislation will transform the legal responsibilities of corporate entities across sectors by extending liability to all criminal offences committed by certain individuals within the organisation.

Current Legal Framework for Corporate Liability

At present, UK law recognises three main doctrines for holding corporate entities criminally responsible:

1. Identification Principle:

   Requires proof that the company's “directing mind and will” (typically, very senior executives or directors) committed the offence. This principle has long been criticised for its ineffectiveness in large corporations with complex hierarchies.

2. Failure to Prevent Offences:

   Introduced through the Bribery Act 2010, expanded in the Criminal Finances Act 2017, and most recently the Economic Crime and Corporate Transparency Act 2023 (ECCTA). These statutes impose strict liability on companies for failing to prevent certain criminal acts such as bribery, facilitation of tax evasion, and fraud.

3. Senior Manager Regime:

   Established under the ECCTA, this framework assigns liability to a corporation for economic crimes committed by individuals who hold significant decision-making authority or manage substantial parts of a business.

Proposed Changes Under the Crime and Policing Bill 2025

The Crime and Policing Bill 2025 takes the existing senior manager liability regime a step further. It proposes extending corporate liability to cover all criminal offences, not just economic crimes. This effectively means that companies could be prosecuted for a broad range of criminal acts, including environmental, data protection, health and safety, or even competition law violations, if committed by a senior manager in the course of their duties.

Under the Bill, a “senior manager” is defined broadly as someone who plays a significant role in decision-making or the organisation of substantial parts of the business. Crucially, job titles, pay grades, or official designations are not determinative—function and influence are key.

Additional Legal Exposure Under the Crime Bill

The Bill also introduces the concept of liability where the senior manager is acting within their actual or apparent authority. This means that a company could be liable even if the individual did not have express permission to commit a particular act, so long as it fell within the kind of duties typically expected of that role.

For example, if a Chief Financial Officer falsifies financial statements to mislead investors, the company would likely be liable because issuing such statements falls within the ordinary scope of the CFO's authority.

Extraterritorial Reach of the Reforms

The proposed reforms are not limited to UK-incorporated companies. Foreign companies could also fall within the scope if any part of an offence takes place within the UK or if the intended victim is a UK person. This extraterritorial dimension raises new compliance concerns for multinational corporations, especially those involved in cross-border transactions, digital services, or public offerings targeting UK residents.

This risk is compounded by the nature of offences like fraud, which are often deemed complete upon the act of misrepresentation, making it easier to establish UK jurisdiction if content is published online and accessible in the UK.

Impact on Compliance and Enforcement

If passed, the legislation is expected to fuel an increase in both corporate prosecutions and Deferred Prosecution Agreements (DPAs), as companies seek to avoid protracted trials. For regulators like the Serious Fraud Office (SFO) and Crown Prosecution Service (CPS), the Bill provides a broader toolkit to pursue complex misconduct in both the public and private sectors.

Legal experts have warned that defining who qualifies as a senior manager and assessing whether their actions were within scope will pose practical challenges for companies. The Explanatory Notes to the Bill clarify that roles in compliance, regulatory affairs, HR, or legal departments may fall within the definition, potentially increasing exposure for corporate entities.

Global Context

This legislative push coincides with the formation of a multinational anti-corruption task force involving the UK, France, and Switzerland, intended to ramp up enforcement against international financial crime. It comes in the wake of a pause in U.S. Foreign Corrupt Practices Act (FCPA) enforcement, signalling a potential shift in global anti-corruption leadership towards Europe.

According to data from Transparency International, corporate crime costs the global economy an estimated $3.6 trillion annually, and the lack of effective enforcement mechanisms has allowed many offenders to go unpunished.

Summary

• The Crime and Policing Bill 2025 is poised to significantly reshape the legal environment for corporations operating in or connected to the UK. 

• While aimed at enhancing accountability and combating systemic misconduct, the Bill also imposes a heightened compliance burden, particularly in identifying potential senior managers and establishing effective internal controls.

• Companies are advised to review their governance structures, assess risk exposure, and consider training programs for leadership teams to prepare for the expanded scope of criminal liability.