Author:Barry Rider
Position:Center for Development Studies, University of Cambridge, Cambridge, UK
Passing the Buck – yet again!
The thirty-fourth annual Cambridge symposium on economic crime took place at Jesus
College, Cambridge, from Sunday 4th to Sunday 11th September 2016. As in previous
years, it was attended by well over 1,600 participants coming from a great many
jurisdictions and ranging across a very broad spectrum of professional interests. The
symposium this year took as its overarching these “where does the buck stop” in cases
of economically motivated crime. It posed the question whether, in addition to those
directly responsible, should we not cast a net, of some kind, over those who facilitated
the misconduct in question and those who are at positions to control or supervise the
conduct of those who do engage in abuse? Such issues until relatively recently were, at
least in the context of nancial and business sectors, seen as non-controversial. While
those in management have certain more or less relevant responsibilities to promote good
governance, any legal or, for that matter, regulatory accountability for the actions of
those lower down the corporate hierarchy was at best academic. While we have
increasingly come to appreciate that most complex frauds and other forms of
misconduct require the assistance, innocent or otherwise, of lawyers, accountants and
bankers, with the exception of the money laundering offences, we have hesitated to
impose liability for “mere” facilitation.
There are real issues as to the level of culpability at which it is seen to be justied to
impose responsibility in the criminal, civil and regulatory law. Where real penalties are
involved, traditionally there has been a degree of hostility to imposing meaningful
liability for less than recklessness. There is also a very real problem in attributing
knowledge and intention to corporations. The English courts have on the whole required
prosecutors to identify the “directing mind and will” of the company and it is the state of
mind of that individual which will be attributed to the company. In complex situations
invariably viewed two or three years down the road, establishing this in the court to the
requisite standard of proof is a barrier that few have surmounted. Of course, there are
other theories which may be more effectively employed, and it is true that some courts,
including the House of Lords, have taken a rather more robust approach. An alternative
approach to attempting to x criminal responsibility on a company for the misconduct
of those it employs is to simply create liability for failing to prevent certain types of
misconduct taking place.
This is not a new idea; the US law as early as 1934 imposed liability on those who
while in a supervisory position could not show that they had taken reasonable steps to
prevent the wrongdoing of those under them. While this approach has morphed into a
much more developed jurisprudence based on “control”, some other jurisdictions have
espoused it in this rather simple form. Indeed, Commonwealth Law Ministers
commended it as a sensible approach in 1983. There is, of course, a watered-down
version in English law: namely, section 7 of the Bribery Act 2010. The Cameron
government became interested in such ideas, and the Attorney General Jeremy Wright
QC announced at the 32nd Cambridge Symposium that the government was considering
legislative proposals for a new separate offence of failing to prevent economic crime.
However, the following year, the then Minister of Justice Andrew Selous announced that
the government had decided not to pursue this approach. In May 2016, Justice Minister
Journalof Financial Crime
Vol.24 No. 1, 2017
©Emerald Publishing Limited
DOI 10.1108/JFC-10-2016-0065

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