Regulatory success for Old Bailey Solicitors in corporate liability case

Created on April 16, 2019

Regulatory success for Old Bailey Solicitors in corporate liability case

Director of Old Bailey Solicitors, Rod Hayler and deputy head of chambers and head of Regulatory Law at No5 ChambersAdrian Keeling QC, have successfully negotiated a settlement on behalf of our corporate client facing an environmental law prosecution. Our client has avoided prosecution and is able to continue trading with their reputation unblemished. 

Our Strategy

Old Bailey Solicitors were instructed to defend the company against criminal charges and regulatory offences brought against it by a water company. Whilst the actions giving rise to the prosecution were accepted, the liability of the employer company was disputed. 

Critically, we engaged in negotiations with the prosecuting authority at an early stage in proceedings. Our client accepted advice to contest the various offences alleged against the company, on the basis that corporate liability did not attach, and to pursue the tactical offer of a settlement to the point of trial. This approach proved successful when, three days before trial, the prosecuting authority agreed to accept the settlement and withdrew the prosecution. 

The directors and senior staff at the client company were delighted at the result, a costly trial was averted and the company’s good reputation remained intact. 

Contesting corporate liability 

Corporate liability, where a company can be held responsible for the acts of its employees, is a complex area of law. On one hand, the courts have been keen to ensure that companies should not profit from criminal acts or breaches of regulations committed by their staff, especially where a competitive advantage is achieved by the employer. On the other hand, liability may not attach where the employer can show that staff have been properly trained and that the offending act was specifically against company policy and against its competitive interest. Even in the latter circumstances, a company may find itself liable for its employee’s acts.  This is especially the case where the offence is one of “strict liability” (where the offence is either committed or it isn’t and there is no need to prove an intention to commit the offence). 

Where corporate liability attaches to the employer company and a conviction in the criminal court follows, the reputational damage for the defendant business can be profound.  As such, it makes good commercial sense to consider the legal position carefully before any acceptance of wrongdoing is made.  Depending on the nature of the offence or the regulatory breach, it may be possible to negotiate with the prosecuting body and avoid court or tribunal proceedings and so that any wrong, actual or perceived, can be corrected to the satisfaction of all parties. 

How we can help

If you or your business has been accused of committing a criminal act or of breaching a regulation where sanctions can be applied, legal advice should be sought immediately.  Even in cases where the punishment is limited to a financial penalty, it is often the case that the prosecuting authority will look to publicise any finding of wrongdoing and so commercial reputation may be at risk. 

Contact Rod Hayler on 0207 846 9424 for advice.

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