The general rule for attributing liability to companies in English and Welsh criminal law is the ‘identification principle’. This states that where a particular mental state is required, only the acts of a senior person representing the company’s “controlling mind and will” can be attributed to the company. In practice, this is limited to a small number of directors and senior managers.

In recent years, concern has been expressed that the identification principle does not adequately deal with misconduct carried out by and on behalf of companies (and other ‘non-natural persons’). In particular, some have suggested that it has proved disproportionately difficult to prosecute large companies such as banks for economic crimes committed in their names, by senior managers, for the company’s benefit. In practice, it can be much easier to hold a small company to account for wrongdoing than a large business where responsibility for decision-making is more diffuse.

This options paper outlines the ways the UK Government can improve the law to ensure that corporations are effectively held to account for committing serious crimes.