Department for Business Enterprise and Regulatory Reform (BERR) Prosecutions
The Department for Business Enterprise and Regulatory Regorm (BERR) prevoiusly known as the Department of Trade and Industry (DTI) bring a substantial number of criminal prosecutions each year. They prosecute a variety of criminal offences and we have sought below to explain the most common offences which they prosecute, which are:
- Fraudulent Trading;
- Undischarged Bankruptcy Offences;
- Breaches of Disqualification Orders;
- Failure to keep proper accounting records.
We have also set out details of interviews under caution with the BERR and information regarding how we can provide expert legal advice in relation to BERR investigations and prosecutions.
Fraudulent Trading
The offence of Fraudulent Trading is the carrying on of any business or company, with the intent to defraud creditors or for any fraudulent purpose. Every individual who was knowingly a party to the carrying on of the business in such a manner is guilty of fraudulent trading.
Frequently senior employees as well as Company Directors are charged with Fraudulent Trading.
To secure a conviction, the Prosecution must prove that the individual acted dishonestly. This can include those that chose to ‘turn a blind eye’, where they have a firmly grounded suspicion that relevant facts exist and made a deliberate decision to avoid confirming their suspicions.
Fraudulent Trading is an offence which is capable of being heard in the Magistrates Court, however most people charged with this offence have their cases heard in the Crown Court, due to the serious nature of the offence.
A conviction for Fraudulent Trading carries a substantial risk of a custodial sentence; however specific advice is given to each client, tailored to the individual circumstances of each case.
Undischarged Bankruptcy Offences
It is a criminal offence for an undischarged bankrupt to act as a Company Director, or to either directly or indirectly be concerned in the promotion, formation or management of a Company, without prior permission from a Court.
It is a question of fact and interpretation whether specific actions and roles within a company constitute actions prohibited by this offence.
A conviction for this offence carries a risk of a custodial sentence for a maximum of two years. However the presentation of skilled mitigation can often result in a non custodial sentence being passed, especially in circumstances where there are no previous convictions for the same offence.
Breach of a Disqualification Order Offences
If an individual has been disqualified from acting as a Company Director for a specific period of time and within that time period acts in breach of such an order, this action constitutes a criminal offence.
A conviction for this offence carries a risk of a custodial sentence for a maximum of two years. However the presentation of skilled mitigation can often be presented to the Court, resulting in a non custodial sentence being passed, especially in circumstances where there are no previous convictions for the same offence.
Failure to keep accounting records
Every limited company has a legal obligation to keep accounting records, sufficient to show and explain the company’s transactions. These records should:
- Be sufficiently detailed to demonstrate the financial position of the company;
- Contain entries from day to day of all money received and expended;
- Contain the nature of each transaction;
- Contain a record of the assets and liabilities of the company.
If a company fails to comply with this requirement, every officer of the company who is in default is guilty of the offence, unless they can show that they acted honestly and that in the circumstances in which the company’s business was carried on, the default was excusable.
Interviews under caution with BERR
Unlike the Police, BERR do not have powers of arrest. However in the process of a criminal investigation they frequently invite the subjects of their investigations to attend a formal interview under caution.
If you are invited to attend an interview under caution with the BERR, specialist legal advice should be sought from us prior to making a decision regarding attending the proposed interview. There is no compulsion to attend the interview and advice can be provided regarding the advantages and disadvantages of attending an interview, tailored to the specific circumstances.
How we can help
We can provide you with expert specialist legal advice if you:
- have been invited to attend an interview under caution by BERR;
- are aware that BERR are investigating you and/or your business;
- have received a summons requiring you to attend Court in connection with a BERR Prosecution.