Guide for Directors - Understanding Your criminal law legal risks

There are a number of ways in which company directors face risks of criminal liability. These include :-

Director criminal liability for fraud

There are a variety of ways in which company directors can expose themselves to criminal liability. This is notwithstanding the general rule that with a limited company, it is generally difficult to "go behind the corporate veil" based on actions in the company's name treated as a separate legal entity from the owners and directors.

Potential director criminal liability for fraud can arise due to :-

• Falsifying documents

• False accounting

• Fraudulent misrepresentation

• Furlough and bounce back loan fraud

For more detail about director fraud from both the perspective of the company/fellow directors or an accused director, click here.

Criminal liability for Health and Safety or Environmental Breaches

Directors of UK companies can face significant legal penalties if their companies are found to be in breach of health and safety or environmental regulations. These penalties can include criminal penalties including fines where directors can be fined substantial amounts, potentially reaching millions of pounds and/or imprisonment in serious cases for directors.

The severity of the sentence often depends on the nature of the breach, the harm caused, and the director's role in the company.

Failing to Prevent Bribery and Corruption in the UK

The Bribery Act 2010 is the primary piece of legislation governing bribery and corruption in the UK. It covers a wide range of bribery offenses, including offering, accepting, and requesting bribes.

Directors can be prosecuted for bribery or corruption offenses under the Bribery Act 2010. Offences include :

• Offering a bribe - offering a gift, loan, or other advantage to a person in a position of authority to influence their decision-making.

• Accepting a bribe - accepting a gift, loan, or other advantage in exchange for influencing a decision.

• Requesting a bribe - demanding or requesting a gift, loan, or other advantage in exchange for influencing a decision.

• Facilitating a bribe - helping another person to offer or accept a bribe.

• Failing to prevent bribery

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