What’s New? Corporate criminality by directors and senior managers
Businesses need to keep abreast of changes and refinements around corporate wrongdoing, to minimise the risks of potential criminality within the organisation. Two recent developments are particularly noteworthy.
First, the Court of Appeal has revisited the meaning of “fraudulent purpose” – a crucial element of the fraudulent trading offence under s993(1) Companies Act 2006. Second, a new corporate offence is about to come into force which extends the scope of potential liability to senior managers.
Fraudulent purpose
A person commits the fraudulent trading under s993(1) he or she is knowingly a party to the carrying on of a company's business either with intent to defraud creditors or for other fraudulent purposes.
In Beckett [2026] EWCA Crim 462, John Beckett was sole director of two identical companies selling old foam loft insulation that turned over millions of pounds. In August 2024, he was convicted of fraudulent trading.
Beckett appealed on grounds that included that the judge misdirected the jury on the meaning of ‘fraudulent purpose’ – that the directions were not consistent with the Court of Appeal’s approach in an earlier fraudulent trading case (R v Hunter (2021)).
His appeal failed and the Court of Appeal reiterated that the words ‘fraudulent purpose’ must be given their ordinary and natural meaning. The trial judge was right to say (in his “impeccable” directions) that “fraudulent purpose’ implies an intention to behave in a way which goes beyond the bounds of what ordinary and decent people engaged in business would regard as honest”, as set out in Hunter. Further, dishonesty was a necessary element of fraud.
Beckett would serve a total prison term of 6½ years. He could still be disqualified from being a director; and confiscation proceedings and a Serious Crime Prevention Order have not yet been determined.
Ignorance of the law is no defence. While this a well-used cliché it has its place – here, the trial judge addressed a prior reference to it in court. She said: “Ignorance of the law cannot provide a defence. If the ingredients of the offence are proved, then a defendant is guilty and there I shall leave it."
New offence
On 29 June 2026, a significant new corporate offence comes into force. Under s250 Crime and Policing Act 2026 (CAPA), companies and partnerships will be committing an offence if a senior manager commits a offence while acting within the actual or apparent scope of their authority.
The offence will extends the scope of corporate criminal liability in the UK beyond the boardroom to senior staff. The Act defines ‘senior manager’ as someone who:
"plays a significant role in
(a) the making of decisions about how the whole or a substantial part of the activities of the body corporate or partnership are to be managed or organised, or
(b) the managing or organising of the whole or a substantial part of those activities.
Significantly, the CAPA has replaced the senior manager provisions in s196 Economic Crime and Corporate Transparency Act 2023, which imposed liability only for specific economic crime offences. The new s250 corporate offence is not limited to specified offences. Furthermore, there are no defences available – not even a ‘reasonable procedures’ defence.
What does this mean?
These developments are a salutary reminder that directors must act honestly in all their business dealings or risk prosecution. Business organisations as whole need to review their existing processes and procedures and identify any areas of potential exposure to criminal wrongdoing among senior managers and directors.
Regular reviews and training are vital, and organisations should take specialist advice on what they need to do.
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