CPS and SFO publish joint corporate prosecutions guidance – what it means for UK corporates

What's “new” in the guidance

Much of the guidance reflects the reality of corporate criminal investigation and prosecutorial expectation. However, this update comprehensively collates the relevant considerations and it should be taken seriously by corporates and advisers.

Statutory defences considered upfront

Prosecutors making charging decisions in failure to prevent cases are told to consider whether an adequate/reasonable procedures defence is likely to succeed in all the circumstances. The guidance points to the Government's prevention-procedures guidance as a framework for interviews, lines of inquiry and evaluating weaknesses or omissions. Practically, this gives corporates under investigation a real opportunity to demonstrate at an early stage that they have a strong statutory defence – and that the required evidential threshold for bringing charges cannot be met. The benefit of pre-charge representations was not explicitly referenced in the 2021 version of the guidance.

Charging strategy – alternative offences and more options

Where there is a close factual nexus between bribery and fraud, prosecutors are told to map alternatives and recognise that the availability of another offence (e.g. failure to prevent fraud) may materially affect the indictment and overall case strategy. Alternative offences have always been on the radar where facts overlap, but the updated guidance reflects the reality that prosecutors now have more charging options available.

Importantly, the updated guidance calls out the significant impact that the widening of the identification principle has had on corporate criminal liability; an organisation facing liability under a “failure to prevent” offence may also face prosecution for the predicate economic crime offence, where the conduct of the associated person can be attributed to the organisation by other means, such as through section 196 ECCTA. There is no reasonable prevention procedures defence available to corporates in these circumstances.

Forum management

For serious or complex corporate fraud, including the failure to prevent offences, prosecutors may use section 51B of the Crime and Disorder Act to send a case directly to the Crown Court. The objective is earlier judicial oversight, firmer case management and access to full sentencing powers.

The ability to pay matters

Companies and partnerships are expected to provide the last three years of accounts. If they do not, prosecutors and the court may draw an adverse inference – namely, that the company can pay an appropriate fine – and proceed on that basis. While ability to pay has often been tested at sentencing, the guidance brings it forward: prosecutors are encouraged to examine means at the pre-charge stage. Recent outcomes show fines can be reduced where inability to pay is proven. This cuts both ways – prosecutors are encouraged to probe financial means early, and companies should be ready to evidence any constraints credibly.

Multi-agency working and referrals

The guidance stresses early engagement with relevant agencies and, where suitable, referrals to relevant regulators, such as the Financial Conduct Authority, in parallel with or as an alternative to prosecution. The focus is collaboration, de-confliction and using the right toolkit to address governance and fitness-to-operate issues. This is consistent with messaging from a variety of agencies in recent months: the multi-agency approach is here to stay and collaborative working is the future.

Practical implications – four actions to prioritise now

Are you ready for 1 September?

For large organisations, treat failure to prevent fraud as an urgent deadline; a reasonable-procedures defence is not retrospective. A fraud risk assessment is required under ECCTA – and it will require careful work: the Home Office's November 2022 impact assessment suggested companies may need around 100–130 hours to complete it. Make sure it addresses higher-risk associated persons. Understand your UK nexus. Roll out targeted training and monitoring, and document why measures are reasonable in all the circumstances. Keep contemporaneous records – if prosecutors are weighing the defence at the evidential stage, this material will be decisive.

Map your exposure against the new attribution test

Make sure your organisation is addressing both failure to prevent fraud and the attribution reforms under ECCTA. Pressure-test where senior manager decision-making actually sits across business units and the group – not just on paper. Refresh delegations, approvals and escalation paths, and check they are followed. Deliver bespoke training to senior managers. Where decision-making is effectively centralised, recognise the attribution risk and ensure controls match that reality. Importantly, know who you are hiring into key roles.

Update your investigation playbooks

Structure internal investigations to identify all relevant facts and gather material evidencing prevention procedures. Put in place legal holds and data-mapping early; plan interviews around the Government-guidance themes; gather and preserve documentary evidence of prevention procedures (risk assessments, third-party onboarding, training logs, monitoring and audit trails, etc.). Maintain privilege where appropriate and record board-level oversight and decision-making. This creates the best platform to demonstrate, early, that the statutory defence is available to you and likely to succeed.

Disclosure, self-reporting and engagement – take a holistic view

The SFO's recent self-reporting guidance confirms Deferred Prosecution Agreements remain on the table for organisations that self-report and cooperate. If self-reporting is under consideration, prepare a clear plan: identify the relevant agencies and potential regulatory touchpoints; consider jurisdictional options for approach and timing; align internal messaging; and be ready to answer questions on means and the capacity to meet a fine. A joined-up strategy will help secure the best outcome. Deciding whether, when and how to self-report is a finely balanced and difficult strategic decision, with significant legal and commercial implications, and one that requires specialist legal advice.

Why this matters

This rewrite crystallises how prosecutors intend to run corporate cases in light of ECCTA's attribution reform and the forthcoming failure to prevent fraud offence. It also brings statutory defences into the evidential analysis for failure to prevent cases and expands the tools available to prosecutors.

Boards and GCs should treat the guidance as both a roadmap for investigations and a measuring stick for prevention programmes – and prepare accordingly.

Please do get in touch with our team today if you would like to discuss any of this further.

Authored by Claire Lipworth, Liam Naidoo, Olga Tocewicz, and Reuben Vandercruyssen.