On 18 August 2025, the Serious Fraud Office (SFO) and Crown Prosecution Service (CPS) published their Joint SFO-CPS Corporate Prosecution Guidance, intended for prosecutors who will make decisions about whether or not to prosecute a corporation.
Issued just weeks before the latest failure to prevent fraud offence comes into force on 1 September, the Guidance also reflects changes introduced under the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023). These reforms overhaul the identification doctrine in economic crime cases.
Designed to sit beneath the Code for Crown Prosecutors, the Guidance offers targeted advice on corporate offending and signals the CPS’s desire to sit alongside the SFO as a corporate crime enforcer.
Background
For nearly 40 years, public prosecutors have followed the Code for Crown Prosecutors when making decisions on whether or not to prosecute. It sets out a twin test:
- Is there a realistic prospect of conviction?
- Is it in the public interest to prosecute?
The new Joint Guidance supplements this Code, giving prosecutors focused direction on how to apply these tests to corporate offending.
Key legal reforms making corporate prosecutions easier to bring
The Guidance follows recent legislative changes aimed at incentivising companies to review their anti-fraud procedures by increasing the legal risk that they face. Two core reforms in ECCTA 2023 underpin this objective:
- Identification Doctrine (Section 196 ECCTA 2023):
- The common-law “directing mind and will” test has been replaced with a broader statutory test of “senior manager”.
- This broadens the group of people whose thoughts and actions may be attributed to a corporate entity in an economic crime case.
- Failure to Prevent Fraud (Section 199 ECCTA 2023):
- From 1 September 2025, large companies will be criminalised on a strict liability basis if they fail to prevent fraud by associated persons.
- This applies only if the fraud was intended to benefit the company, or those to whom it provides services. Companies will not be criminalised if they themselves are the victim of the fraud.
- Companies can avoid liability by demonstrating that at the time the offence was committed they had put in place such fraud prevention procedures as was reasonable in all the circumstances or that it was not reasonable to have any such procedures in place. See our related blog here.
These reforms make it easier successfully to prosecute companies. A side-effect is that they increase the risk that companies will be subjected to criminal investigation.
The CPS steps into the spotlight
For many years, the SFO has been perceived as the primary authority for prosecuting corporate crime. However, recent developments show the CPS is also willing to take on large corporate cases.
In December 2023, the CPS entered into its first Deferred Prosecution Agreement (DPA). While both the CPS and SFO have had DPA powers since 2014, the SFO has historically dominated this space, securing the first twelve such agreements to date.
The CPS’s debut DPA, a £615 million agreement with Entrain plc, signals its ability to successfully take on very large-scale economic crime cases.
Whilst the Joint Guidance sometimes draws a distinction between guidance applicable to the CPS and SFO, it broadly shows the extent of powers available to public prosecutors when pursuing economic crime cases.
Of particular interest are Director Disqualification Orders (DDOs), which prosecutors can obtain on conviction, and Serious Crime Prevention Orders (SCPOs), which they can obtain on conviction or by way of separate application to the High Court. The Guidance also points to the extensive asset recovery powers available to prosecutors, ranging from pre-charge restraint and management receivership orders to post-conviction confiscation and compensation orders.
Public Interest Factors
Section 7 of the Guidance introduces an expanded set of public interest factors for and against prosecution. Closely mirroring those in the DPA Code of Practice 2013, the factors now extend to all corporate offences. By including self-reporting, remediation, and cooperation as factors against prosecution, prosecutors are plainly trying to incentivise companies to disclose wrongdoing early and cooperate with investigations.
See a summary of key public interest factors for and against prosecution below (the full list of factors can be found in Section 7 of the Guidance):
Factors in Favour of Prosecution
- A history of similar misconduct, including past criminal, civil or regulatory measures
- Evidence that the misconduct formed part of the company’s standard business practices
- Offending committed when the corporate compliance programme was ineffective or non-existent
- Failure to report wrongdoing within a reasonable time of its discovery
- Failure to disclose fully the true extent of the misconduct
- Significant harm caused to victims, shareholders, employees or the integrity of financial markets
Factors Against Prosecution
- Genuine, proactive self-reporting to prosecutors or regulators, followed by fulsome co-operation
- Remedial actions taken by management, including compensation for victims
- The existence and effective operation of a robust compliance programme
- No prior history of similar conduct or enforcement action
- Availability of proportionate civil or regulatory alternatives that address the full scope of the offending
What this means for businesses
This Joint Guidance is the first major policy update since DPA Code of Practice was published over a decade ago. The timing of the document is no coincidence. With legislative changes incoming, businesses must prepare accordingly.
The Chief Crown Prosecutor leading on economic crime for the CPS, Hannah von Dadelszen, reinforced this in her statement on the new guidance:
“The new ‘failure to prevent fraud’ offence and developments in the identification doctrine represent a major step forward in tackling corporate crime…[removing] barriers that have made it harder to hold companies to account, and our updated guidance equips prosecutors to make full use of these changes”.
For his part Nick Ephgrave, the Director of the Serious Fraud Office, said:
“Now is the time to take action. Corporations must get their house in order or be ready to face investigation.”
What this means for directors and senior staff
The Guidance reminds prosecutors about the “consent and connivance” route to liability for company officers (para 4.2). Under the Bribery Act 2010 (s.14) and the Fraud Act 2006 (s.12), any director or senior officer who knowingly consents to or connives in their company’s bribery or fraud can be prosecuted alongside the corporate entity.
The SFO and CPS want their prosecutors to be ready for the 1 September changes. Company directors should do the same. They can prepare by carrying out regular risk assessments, embedding proportionate anti-bribery and anti-fraud controls in their businesses, and ensuring a culture of integrity within them.
With thanks to Isabel Holt for her assistance in preparing this blog.
About the author
Alun is a partner in the Criminal Litigation team and specialises in serious or complex financial crime, proceeds of crime litigation and corporate investigations. He has particular knowledge and experience of issues surrounding cross-border criminal investigations, corporate crime and deferred prosecution agreements.
