It has never been easier for UK prosecutors to prosecute corporate organisations for the actions of their senior managers. With effect from 29 June this year, the scope of corporate criminal liability is due to expand even more substantially.

What is changing?

The law on corporate criminal liability is shifting in favour of prosecutors. Significant changes have already been made in recent years. Since December 2023, it has no longer been necessary for them to use the "identification principle" – i.e. to identify the "directing mind and will" of a corporate organisation – in order to pursue criminal proceedings against it for certain economic offences (including bribery, fraud, theft, money laundering, market manipulation and financial sanctions related offences). This dispensed with a requirement that had been problematic in a number of high profile attempted prosecutions of large and complex corporate organisations. Instead, in order for a corporate organisation to be criminally liable for these offences committed by "senior managers", it has only been necessary to show that the individual(s) concerned did so acting "in the actual or apparent scope of their authority". The definition of "senior manager" is potentially broad, extending below board level and encompassing other senior and middle management roles in many organisations.

Since March 2025, the UK Parliament has been considering proposals to expand the scope of these changes to all criminal offences, thereby bringing many scenarios which have to date only carried a risk of civil or regulatory liability within the ambit of criminal investigation and prosecution authorities.

The Crime and Policing Act, whose provisions will make these important changes, passed into law yesterday. This means that corporate prosecutions will become a more realistic option for enforcement authorities in many commercial scenarios.

When will these changes take effect?

Under the relevant parts of the Act, the changes will take effect two months after it passes into law  (i.e. on 29 June).

What will these changes mean for key sectors?

The situations in which potential corporate criminal liability may be heightened will vary substantially between businesses and sectors. As we noted in our separate detailed briefing earlier this year, prosecutors will be able to choose from a wide array of potentially applicable offences based on the factual circumstances of alleged misconduct. In that briefing, we also set out some indicative examples of hypothetical scenarios in various key sectors which could potentially lead to criminal liability based on the actions of "senior managers".

How might the changes affect investigations?

In our previous briefing, we highlighted that the UK Government had not proposed corresponding changes to other legislation which would have allowed co-operating corporates to enter into deferred prosecution agreements ("DPAs") to conclude criminal investigations concerning all of the offences which will now be covered by the updated law on corporate criminal liability. That position remains the same, which will in practice leave prosecutors with a binary choice between prosecuting or taking no action against corporate organisations. This may in turn present boards with finely balanced decisions about whether corporate organisations' interests will properly be served by early engagement with enforcement authorities whose investigations are concerned with the offences covered by the updated law.

What should corporates be doing about the changes?

The new law will require corporate organisations in all sectors to think carefully about the types of situations in which individuals could commit offences in the course of their duties and how to minimise the opportunities for offending conduct to occur. Now is the time to examine and refine compliance and training arrangements to anticipate and manage the heightened risks arising from individual conduct.