Government adds identification doctrine reform to Economic Crime Bill

The Government has added a new proposal to the Economic Crime and Corporate Transparency Bill which will address the long-overdue reform of the identification doctrine. Following significant criticism of many aspects of the proposed new “failure to prevent fraud” offence, the government has now introduced wording that can bring senior managers as well as directors within what could be considered the “directing mind and will” of a business. Minister for Enterprise, Markets and Small Business, Kevin Hollinrake, said the reform would help small business owners play on a level playing field with corporate giants. In practice, the Government says the test will be based on the decision-making power of the individual, rather than just their job title. It says this will reduce the ability of large corporations to use complex management structures to hide who the decision makers are. The Government hopes that its wording will make it easier to attribute economic crime to corporates of all sizes as well as removing the unfair practical distinction between small and large entities. The definition will be based on the definition of “senior manager” for corporate manslaughter purposes.

The Government says it expects to implement the measures 2 months after Royal Assent.

Emma Radmore