The UK is to press ahead with a sweeping overhaul of legislation that could lead to companies being held criminally liable for failing to spot and prevent economic crime.

The Ministry of Justice will announce later on Friday that it will begin consultations with business over the proposals.

The Serious Fraud Office has long sought legislation to improve its ability to prosecute and fine companies for economic crimes. The SFO currently has to prove there is a “directing mind” at senior board level at the company in question in order to prosecute the corporate itself, leaving the agency far behind its counterparts in the US.

David Green QC, SFO director, was forced to watch on the sidelines last May as the US Department of Justice levied hundreds of millions of dollars in fines against US banks for manipulating benchmark interest rates, while the SFO had secured only the convictions of a handful of mid-level traders.

The measure to introduce a broader “failure to prevent economic crime” corporate liability was first flagged last May following David Cameron’s anti-corruption summit, and then again in September when Jeremy Wright, the attorney-general, said the government could soon launch consultations.

The UK legal community has already split between those who believe the measure will make companies and senior executives more accountable and those who believe it will end up shifting the burden to investors, including pension funds, while senior executives still escape unscathed.

Sir Oliver Heald, justice minister, 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 call for evidence will seek views on whether the need to prove the involvement of a “directing mind” is hindering prosecutions and investigate alternatives to the existing regime, the ministry said.

Those alternatives include introducing “the failure to prevent model”, or introducing “a US-style ‘vicarious’ liability offence” that makes companies guilty through the actions of their staff without having to prove complicity. The ministry said it would also weigh the benefits of strengthening regulatory regimes.

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