The scope of liability for failure to prevent economic crime

There is a strong case for the introduction of a general offence of corporate failure to prevent economic crime. We consider the principles that should govern the scope of such an offence. We argue that existing criteria for the application of failure-to-prevent offences respecting the criminal conduct of employees, agents and subsidiary companies are unsatisfactory. Our main concern is the parent-subsidiary company relationship. However, we develop a new focus, more generally, for understanding the connection that must be established between a company, and person who committed the crime. This is a focus on the nature and extent of any supervisory duty that existed on the (parent) company to establish and oversee the observance of appropriate standards relating to the course of the conduct that gave rise to the offence. We call this the "supervisory principle".