Legal background IDD
This provision enables conviction of an organisation where a senior manager commits a relevant economic offence while acting in the scope of their actual or apparent authority. It is intended to address difficulties in holding corporations criminally liable under the existing "identification doctrine", which requires that the person concerned can be shown to be the organisation’s "directing mind and will".
	The test to define senior management replicates the definition of "senior management" in the Corporate Manslaughter and Corporate Homicide Act 2007 (CM&CHA 2007). This test will look at what the senior manager’s roles and responsibilities are within the organisation – the level of managerial influence they might exert – rather than their job title. This will have the advantage of providing greater clarity on the parameters of the legal test and enable prosecutions to progress in more cases where senior level employees, who do exert decision-making power, are found to be involved in the offending.
	If a corporation is successfully prosecuted under the offence, it will receive a criminal conviction and fine, in addition to any sentences imposed on individuals involved in the offending. The criminal conviction can impact on other parties, including investors, other employees, and even customers.
	Any decision to pursue a case must be made in accordance with the Code for Crown Prosecutors which requires the prosecutor to consider whether there is enough evidence against the defendant, and whether it is in the public interest to prosecute. The CPS has published legal guidance on how this extends to corporate prosecutions through the identification.
	The identification doctrine reform will closely mirror the Law Commission’s proposals but applies the reforms to economic crimes only. However, the Government understands that the identification doctrine in law apples more widely than economic crimes so the legislation will be extended to all criminal offences when a Bill arises that enables reform for all crimes. The Government has committed to this in Economic Crime Plan 2 and the Fraud Strategy.