UK corporate criminal liability to be significantly extended for senior staff

Introduction

• The Crime and Policing Act 2026 (the Act) has received royal assent and will dramatically widen the scope of corporate criminal liability in the United Kingdom.
• Once in force, a company can be held criminally liable for any offence committed by a “senior manager” acting within their actual or apparent authority.
• This represents the broadest extension of corporate criminal responsibility in recent UK legal history.

Quick Background

• Until December 2023, companies could generally only be prosecuted under the traditional identification principle (also known as the “directing mind and will” test).
• This required prosecutors to prove that the offence was committed by one of the very top individuals — typically board members or the most senior executives — who embodied the company itself.
• The bar was extremely high and prosecutions were rare.

The Economic Crime and Corporate Transparency Act 2023

• introduced the first major change: it applied a new “senior manager” test to economic crimes
• FRAUD, THEFT, MONEY LAUNDERING, AND
• RELATED OFFENCES UNDER THE PROCEEDS OF CRIME ACT 2002
• And created the separate “failure to prevent fraud” offence.

The Crime and Policing Act 2026

• Now takes this concept much further by extending the senior manager test to all criminal offences, not just economic ones.

What “Senior Manager” Means

• The term is expected to cover individuals who:
• Play a significant role in decision-making about how the whole or a substantial part of the organisation’s activities are managed or organised, or
• Have actual management or control over those activities.
• This is deliberately broader than the old “directing mind” test and will capture a wider group of senior executives and functional heads.

Key Practical Implications

• Prosecutors will find it significantly easier to hold companies accountable for crimes committed by senior personnel.
• Companies could, in principle, face liability for offences well outside normal business or regulatory misconduct, provided the conduct is linked to a qualifying senior manager acting in their role.
• There is no statutory “reasonable procedures” defence for these offences (unlike the failure-to-prevent regimes). Strong governance, controls, and training can reduce risk and help in sentencing, but they will not prevent liability from attaching.
• The new rules sit alongside existing failure-to-prevent offences.

Important Limitations

• Sole traders and partnerships are excluded.
• A company will generally not be liable if the senior manager’s conduct occurred wholly outside the UK, unless the organisation itself would have been guilty had it carried out the acts in that location.

Timeline and Consequences

• The extended regime will apply to offences committed on or after 29 June 2026. Although the full official text of the Act is not yet published, the change is now law.
• Organisations convicted under the new rules face potentially severe penalties: substantial fines, director disqualifications, confiscation orders, and, in extreme cases, restrictions on trading.
• Legal commentators, including firms such as Kingsley Napley, CMS, TLT and White & Case, expect enforcement agencies to make active use of these powers to close previous gaps in corporate accountability. While complex cases will take time to move through the system, an increase in corporate prosecutions is widely anticipated.

In short,

• The Crime and Policing Act 2026 marks a fundamental shift in UK corporate criminal law, placing far greater responsibility on organisations for the actions of their senior managers across the entire spectrum of criminal offences.
• Businesses should now treat this as a strategic governance priority.

Long read

The Crime and Policing Act 2026 (the Act) has received royal assent, expanding the scope of corporate criminal liability to

• All crimes where a senior manager commits an offence while acting in their actual or apparent authority.

This is the second expansion of corporate criminal liability law which, until December 2023,

• Could only hold a company criminally liable for the actions of individuals representing its 'directing mind and will', the identification principle.

This typically applied to board members and the most senior executives, which set a very high bar for prosecutors.

Then, with the enactment of the Economic Crime Corporate Transparency Act 2023 (the Transparency Act),

• A company could be held liable for the actions of a 'senior manager',
• Although this test was limited to 'economic crimes' such as fraud, theft, and offences under the Proceeds of Crime Act 2002.

The Transparency Act also introduced the ‘failure to prevent fraud’ offence.

• The Act measures, when in force, extend the senior manager test to all crimes, not just economic.

• 'Senior manager' is likely to capture individuals who play a significant role in decision-making about how the whole or substantial part of the organisation's activities are managed or organised, or who have actual management or control over such activities.

It is expected to make it simpler for prosecutors to hold corporates to account for a wider range of crimes committed by their senior personnel, according to law firm Kingsley Napley.

Companies can, in principle, be prosecuted for offences that are far outside the normal range of business misconduct, so long as prosecutors can link the conduct to a qualifying senior manager and their role, says law firm CMS.

Moreover, the new offences are in addition to existing corporate criminal 'failure to prevent' offences.

There is no statutory defence of having put reasonable or adequate procedures in place for these wider offences. 'Governance, controls and training may mitigate risk, but they will not prevent liability from attaching', commented law firm TLT.

However, sole traders and partnerships are excluded from the law's scope.

Also, the organisation will not be liable where the senior manager’s conduct took place wholly outside the UK, unless the organisation itself would have been guilty had it carried out the acts constituting the offence in the location in which they occurred.

The measure is not yet in force and, in fact, a definitive official version of the Act is not yet available.

However, the extended corporate liability regime, replacing section 196 of the Transparency Act and applying across all criminal offences, will apply to offences committed on or after 29 June 2026. Businesses found guilty of criminal offences may face substantial fines, disqualification of directors, confiscation orders, and, in severe cases, restrictions on trading.

law firm White and Case said

• 'All criminal enforcement agencies will be keen to find uses for [the new law] as it fills in the gaps between the existing statutory corporate criminal offences',
• 'It would therefore be surprising if [the Act] did not lead to an increase in prosecutions, but this is likely to take time [as] complex cases will inevitably take years to work through the system.'

Sources

• Kingsley Napley = https://www.kingsleynapley.co.uk/insights/blogs/criminal-law-blog/corporate-criminal-liability-for-all-crime-an-expansive-approach
• Withers = https://www.withersworldwide.com/en-gb/insight/read/crime-and-policing-act-2026-a-significant-expansion-of-corporate-criminal-liability
• CMS Law = https://cms.law/en/int/legal-updates/crime-and-policing-act-2026-corporate-criminal-liability-unbound
• Irwin Mitchell = https://www.irwinmitchell.com/news-and-insights/expert-comment/post/102mrgx/the-crime-and-policing-act-2026corporate-criminal-liability-and-business-prepare
• TLT = https://www.tlt.com/insights-and-events/insight/crime-and-policing-act-2026-expansion-of-senior-manager-criminal-liability
• White & Case = https://www.whitecase.com/insight-alert/uk-corporate-criminal-liability-reaches-its-peak-how-corporates-can-respond