Criminal Liability in Regulatory Contexts Responses - Law ...

Kiron Reid, Liverpool Law School
1.1301 Perhaps negligence could act as a deterrent – if directors know about the
offences. I do not like gross negligence as a concept but if such offences were
created then perhaps gross negligence as clarified by Misra 34 could work as the
fault element? It is possible thought that negligence itself is a clearer concept for
courts to work with and sets the level for liability at an appropriate point where
thought necessary.
1.1302 Question 3. This type of offence is outside of my knowledge but I put forward a
couple of brief points for discussion. Generally such offences should not be the
norm. They should be used only for specific problems and if the potential harm is
serious enough to merit – possibly for health and safety, fraud, money laundering
or (though not relevant for this consultation) complicity in violence even. The
underlying aim, to therefore drive up standards, is a laudable one.
1.1303 Question 4. I agree in principle but here, unlike the above, it is much more
reasonable, in principle, that the owner or operator be liable on a negligence
basis. After all they have chosen to delegate running the business. The penalty
should be able to reflect serious cases that are more akin to complicity or wilful
blindness, although perhaps these are already covered by your proposals or the
scope of the existing law. I agree with the reasoning at the end of para. 1.90. 35
Chamber of Shipping
1.1304 We agree with the proposition that there should not be a separate offence of
neglect by a director or other officer. This could lead to a situation where, in the
event of corporate liability but with insufficient evidence of consent or connivance,
directors will alternatively be at risk of prosecution for neglect. This would be
unsatisfactory since directors would have to show absence of knowledge and,
effectively, prove a negative which is a difficult burden to discharge and
handicapped by the hindsight evidence likely to be produced by the prosecution.
1.1305 Q3: In line with our comments on Proposal 16, we would not support an offence
of “negligently failing to prevent [an] offence”.
1.1306 Q4: This is likely to have an impact only on the very smallest undertakings.
Nevertheless, we would agree that, even if there were sound reasons in the past
for an office or licence holder to be liable for an offence committed by an
appointed manager, this is no longer appropriate. The suggested new offence of
“failing to prevent the commission of an offence” therefore appears to have merit.
34 [2005] Crim LR 234, CA.
35 The principle of “extensive construction” (where servant’s act regarded in law as that of master) – well
covered by Smith & Hogan, 11 ed. p. 180-1 – is not mentioned. It may not be relevant to this area. I would
apply the same principle there. However that may be too easy for the owner / manager of a business to
avoid then by absenting themselves from a premises and simply leaving instructions to comply with the
rules.
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