Many business activities are heavily regulated and this can include a significant amount of environmental and planning regulation. Those who fall foul of this regulation risk being convicted of a criminal offence. This article explores some of the consequences of conviction for individuals and companies.
Whilst some of the consequences of a criminal conviction may appear obvious to many – possible fine or period of imprisonment, loss of previous clean record and damage to reputation – there are a number of associated consequences that many simply won’t have foreseen.
There is a very real possibility that it will have an impact on future employment prospects. Until your conviction is ‘spent’ you may be required to tell any potential employer about it if they ask you. If you are a company director, there could be provisions within the Articles of Association that mean that it has to be declared to the board.
For a conviction which resulted in a sentence of a fine or community order the conviction is not ‘spent’ until one year after the end of the sentence, meaning you will have to declare it to an employer, if they ask, for a further one year after the fine has been paid or the community sentence completed.
For prison sentences that declaration period is longer. For a prison sentence of six months or less the conviction must be declared for a further two years after the sentence ends. It must be declared for four years after the conclusion of a prison sentence of between six months and thirty months and for seven years after a sentence of between thirty months and four years. Where a sentence of imprisonment is for four years or more the conviction will never be ‘spent’ and will always have to be declared to potential employers when asked.
Importantly, some jobs, such as teacher or lawyer, require a DBS (criminal record) check, and where that is the case it will show an employer past convictions even where they are ‘spent’. The employer can withdraw any job offer if the conviction means you are unsuitable.
Even if you are not in one of the professions above, there are over 1,000 criminal offences which even if they become ‘spent’, will never fall to be filtered from a DBS check. The practical result of this is that you may have to disclose these offences whenever a DBS check is carried out.
A conviction can lead to a company director disqualification. Anyone can report a company director’s conduct as being unfit, following which the Insolvency Service may investigate and start the disqualification process. A company director disqualification can run for up to fifteen years meaning you cannot be a director of, or be involved in forming, marketing or running, a company in the UK for the period of disqualification.
The ability to travel to other countries can also be impacted. Travelling to the US and Australia, in particular, can be more difficult as details of the conviction will have to be disclosed in any application for a visa.
There may also be unforeseen financial consequences. A conviction will invariably have an immediate impact on insurance policies held by either the individual, or, in the context of a corporate conviction, company insurance policies. Some insurers, depending on the nature of the conviction and the insurance policy sought, you might at least expect to see an increase in premiums if not a refusal to insure you entirely. This might particularly be the case for a business whose insurers have covered the legal costs of a regulatory prosecution, such as for an environmental offence.
Companies who tender for work can also find themselves in difficulties if they have been convicted of an offence or even simply received a caution. Whether that is a conviction for environmental, health and safety or other regulatory offences, companies can be discounted from tendering for contracts from the outset.
If you are a holder of an Operator Licence you risk having regulatory action taken against the licence where there has been a convictions of the company, directors or its employees; these should be notified to the Traffic Commissioner who could lead to a Public Inquiry.
Similarly, if you hold an Environmental Permit, this could be removed if you commit any offences contrary to environmental law.
If a defendant is convicted of an offence the Environment Agency (or any other prosecuting authority) may make an application under the Proceeds of Crime Act for confiscation; this can be following a conviction in either the Magistrates’ or the Crown Court where it is suspected that the defendant has benefitted financially from their criminal activity; this is explored in more detail in a separate article.
This should all serve to demonstrate that, in reality, the consequences of a criminal conviction, even in a regulatory context, go far beyond the punishment pronounced by the sentencing judge.
Please contact any member of our environment group for further information or advice on how these impacts can be avoided or mitigated either by the way that you conduct or structure the work being undertaken.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at January 2020.