ENGLAND & WALES Trends and Developments Contributed by: John Kaye and Piers Desser, Carson Kaye
• enhance third-party due diligence processes; and • implement targeted training programmes. In many cases, organisations are adapting exist - ing anti-bribery and anti-tax evasion frameworks to address fraud risk. However, fraud presents distinct challenges, particularly given its breadth and the fre - quency with which it arises in operational rather than purely transactional contexts. Despite the clear direction of travel, there remains uncertainty as to how the offence will be applied in practice. Key areas likely to be tested include: • what constitutes “reasonable procedures” in differ - ent sectors; • the extent to which reliance can be placed on group-wide policies; and • how far organisations must go in policing third- party conduct. Early enforcement decisions will be critical in shaping the practical scope of the offence. Until then, many organisations are taking a cautious and resource- intensive approach. The expansion of corporate criminal liability Alongside the new failure to prevent fraud offence, broader reforms are gradually reshaping the frame - work for corporate liability in England and Wales. The Economic Crime and Corporate Transparency Act has expanded the range of individuals whose conduct can be attributed to a company. In particular, liability can now arise from the actions of senior managers acting within the actual or apparent scope of their authority. This represents a significant development. The con - cept of a senior manager is broader than the tradi - tional directing mind test and captures individuals who play a meaningful role in decision-making or the management of business activities. There is a clear policy trajectory towards further expansion. Proposals under consideration suggest that the senior manager attribution model could be
extended beyond economic crime to a wider range of offences. If implemented, this would bring the UK closer to juris - dictions such as the United States, in which corporate liability is significantly broader and easier to establish. These developments have direct implications for cor - porate governance structures. Organisations must now consider: • how decision-making authority is distributed; • the clarity of reporting lines and accountability; and • the extent to which senior managers are trained and monitored. The risk is no longer confined to board-level conduct. Responsibility is effectively being pushed down into operational management layers. Companies House reform and corporate transparency Another major strand of reform has focused on Com - panies House, which has historically operated as a passive registry rather than an active gatekeeper. New powers introduced under recent legislation are transforming its role. Companies House can now query, reject and remove information, and is playing an increasingly active role in identifying suspicious activity. At the same time, new identity verification requirements for directors and persons with signifi - cant control are being phased in. These changes are aimed at addressing long-standing vulnerabilities in the UK’s corporate framework, par - ticularly the misuse of shell companies and opaque ownership structures. For legitimate businesses, the impact is two-fold: • increased administrative requirements and onboarding checks; and • greater scrutiny of corporate structures and filings. For those engaged in cross-border transactions, the reforms also signal a broader tightening of transpar - ency expectations in the UK market.
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