Contractors' Questions: Can my PSC break UK law in a foreign country?

Contractor’s Question: Is my British-registered company allowed to circumvent British law by going to another country, as we intend, where an act that is illegal in the UK is permitted?

Expert’s Answer: A company incorporated under the Companies Act 2006 is registered in England has an English domicile and therefore, English laws will be applicable to that company. The UK law recognises companies as separate legal person, but obviously it is not a natural person. 

In the UK, a company can only commit certain crimes. There are approximately 80 crimes that a company can commit; these crimes -- among others -- relate to money laundering, corruption, organised crime and corporate manslaughter. Interestingly, a UK company cannot be prosecuted for corporate manslaughter that has been committed abroad -- it would likely be prosecuted under the laws of the country in which the crime was committed, if such an offence exists in the laws of that country.

However, there is an English principle of law called vicarious liability. Vicarious liability provides that a corporate employer will be liable for the acts of its employees and agents where a natural person would be similarly liable. When determining if a company is vicariously liable for its employees’ actions, it is necessary to look to this principle of law.

Let’s apply this to the real-world. For example, an employee of Company A drives the company car during the course of his/her employment and is over the drink drive limit for the UK, Company A may be liable for the employee’s actions. But, with the same scenario except that the employee is working overseas in a country that has a higher threshold for drink driving, and this threshold has not been met, then an offence has not been committed and Company A cannot be viciously liable for the employee’s actions.

It is only possible to commit offences when there is a law that prohibits an action. Therefore, what may be a crime in one country will not be a crime in another, providing there is no law making the action a crime.

The expert was Samuel O’Toole of law firm Lawdit Solicitors.

Thursday 16th March 2017