The UK should adopt US-style corporate vicarious liability to ensure white-collar criminals are brought to justice, the former solicitor-general and architect of recently introduced deferred prosecution arrangements (DPAs) said this week.

Speaking to the Gazette ahead of a speech to the Bar Council’s employed bar conference, Sir Edward Garnier QC (pictured) defended the introduction of DPAs as a ‘pragmatic tool’ and ‘extra weapon’ in the prosecutorial armoury, particularly at a time of budgetary constraint.

DPAs came into effect on 28 February through an amendment to the Crime and Courts Act 2013. They allow prosecutors to charge companies with fraud, bribery and other economic crime, but defer prosecution if companies adhere to conditions agreed by a judge.  

‘I brought them in because the comprehensive spending review required the Serious Fraud Office to make cuts to its budget,’ Garnier said.

He insisted DPAs would save the time and expense of lengthy investigations and trials and would not let companies off the hook. ‘You can’t send companies to jail,’ he said. He added that the penalties are roughly the same under DPAs and stressed that even though a company may agree a DPA, individuals could still face prosecution.

Garnier estimated up to eight to 10 DPAs a year would be struck and expressed hope that the first would come before a year had passed.

He said it is ‘inevitable’ that the law on corporate criminal liability in the US, which allows for vicarious liability, will need to ‘marry up’ with the law in the UK.

Much big-ticket fraud and financial misconduct is international and cross-border, he suggested, and unless the UK further amends the law in relation to corporate liability, people who ought to be prosecuted will not be.

‘We need parliament and the public behind it,’ Garnier said. ‘The public want to see the prosecution system taking more effective action against financial crime. Just because there is no blood on the table and no one is dead, it does not mean that there are no victims.’

Michael Caplan QC, criminal partner at London firm Kingsley Napley, said: ‘To go in the direction suggested would be a quantum leap – we’d have to consider it very carefully. Let’s get DPAs on the roadmap first and take it from there.’