Photo: Charles Hoffman, Flickr. Creative Commons.

The UK is pushing ahead with efforts to bring in a new law to make companies liable for failing to prevent economic crime.

The Ministry of Justice yesterday launched a consultation proposing to change the approach of law in the UK to a “failure to prevent model, whereby a company is liable unless it shows it has taken steps to prevent offending”.

Currently, the Serious Fraud Office in the UK operates under the “directing mind” principle, where it has to demonstrate there is board-level activity behind criminal activity in order to prosecute a company.

The consultation specifically asks whether the “directing mind” model is preventing companies from being prosecuted.

Justice Minister Sir Oliver Heald QC said: “Corporate economic crime undermines confidence in business, distorts markets, and erodes trust.

“Companies must be held to account for the criminal activity that takes place within them.

“I want to restore public faith in business and make sure we have the right tools available to crack down on corporate criminality.”

The government is also considering a “vicarious liability” law, which would make companies liable for the actions of staff.

Consultation on reform will run until 24 March.