Criminal Liability in Regulatory Contexts Responses - Law ...

1.1276 Trading Standards will consistently prosecute directors where it can be shown the
offending of the Company would not have occurred if that particular director had
done their job properly. In addition, many traders will form a limited company in
order to limit their personal liability, yet, to all intents and purposes they are the
limited company. In the event of the company becoming insolvent, the directors
can still be prosecuted for criminal offences that have been committed by the
company if the appropriate tests of consent or connivance, etc, are met. This
therefore serves as an invaluable tool in the field of consumer protection and
must be retained.
1.1277 Furthermore, where a director is found to set up limited companies and fold them
only to re-emerge in the same trade – phoenix – to only be able to pursue the
company would be impossible once it has been liquidated. Under these
circumstances it is wholly appropriate to pursue the controlling minds of such
companies and seek to ask the courts to ban individuals from being directors of
companies.
1.1278 With regards to the doctrine of delegation, we consider that to abolish this and
replace it with an offence of failing to prevent an offence being committed by
someone to whom the running of the business had been delegated will have no
practical effect and will simply result in yet another offence being put onto the
statute books. Traders, or businesses, who simply delegate their responsibilities
to another person, have, in turn, a responsibility to ensure that delegation is
properly carried out. Should that delegation not be properly managed and
maintained, then if criminal offences subsequently occur in relation to the running
of that business then all parties in the arrangement will have failed in their duties
and should be liable to be dealt with accordingly.
1.1279 It would appear that the primary reason for the proposal is to remove social
stigma in relation to individuals for offences committed by the company. We are
of the opinion that it would be beneficial to detail specific legislation and to
quantify the number of instances where such ‘social stigma’ may result in order to
determine the most proportionate and effective method of removal (if required).
1.1280 We are of the opinion that the delegation doctrine should remain. However, we
acknowledge that care is needed when having regard to the construction of the
offence even where this would make the provision difficult to enforce.
1.1281 In some cases the more relevant question may be whether the elements required
for the offence have been correctly identified having regard to the construction of
the offence rather than should the delegation principle be applied.
1.1282 It would appear that the consultation proposal is based on the premise that it was
not the intention of the legislature to extend criminal liability from consent and
connivance to include negligence. Furthermore, that if it is accepted that a social
stigma, in certain circumstances, may be attributed to an individual who is
negligently liable for offences committed by a company, the consultation proposal
is based on the view that this was not the intention of the legislature.
1.1283 Q3: We do not consider that “neglect” should be removed in such circumstances.
In our view the correct way of reflecting the difference in culpability is through a
coherent sentencing policy. However if the current offence of “neglect” were to be
abolished then we consider that it should be replaced with the suggested offence.
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