Section 250 of the Crime and Policing Act 2026 (the 2026 Act), which slipped in fairly quietly on 29/6/26, significantly increases criminal exposure for law firms (of all sizes) (and other corporate entities, including partnerships).
A firm itself can now also be convicted of any UK criminal offence committed by a ‘senior manager’ ‘acting within the actual or apparent scope of their authority’. (It is worth noting that the firm doesn’t need to benefit from the offence for the 2026 Act to bite).
Since December 2023, section 196 of the Economic Crime and Corporate Transparency Act 2023 (ECCTA) attributed criminal liability for only listed economic crimes (including money laundering, Proceeds of Crime Act, bribery, theft and fraud offences) to corporate bodies. The 2026 Act replaces the ECCTA provisions and extends this list to all crimes. Such additional offences which law firms might see may include those relating to health and safety, data protection, perverting the course of justice/ obstructing investigations, computer misuse, and unauthorised reserved legal activities, but of course this is not an exhaustive list, and will only be relevant where they are committed within the ‘actual or apparent scope’ of the senior manager’s authority.
The ‘senior manager’ definition has not changed but remember that it may include not only managing or senior partners in a law firm, but also any individuals who play a significant role in managing or organising the business (or a substantial part of it) or making decisions in relation to such management and organisation, regardless of job title.
Unlike the separate failure to prevent fraud offence under ECCTA (which only applies to ‘large organisations’), section 250 applies to all firms and provides no ‘reasonable-procedures’ defence. Whilst the lack of any defence may sound a little bleak, firms can (and should) take steps to reduce the potential risks of their senior managers ‘going rogue’.
Think about:
- identifying who qualifies as a ‘senior manager’ in your firm
- clearly document the limits of their authority within those roles
- assess the criminal risks associated with their activities
- ensure you have robust staff screening processes in place
Don’t forget to:
- provide training to senior managers on the new rules
- review your governance frameworks (including file reviews for senior managers – don’t limit such checks to more junior staff – and client account controls)
- review your whistleblowing and reporting arrangements, and your insurance cover (including Directors’ and Officers’ insurance – or equivalent).