Ignorance of the law is no excuse for company directors Attorney General's Reference No. 1 of 1995
| Published date | 01 January 1997 |
| Pages | 73-77 |
| Date | 01 January 1997 |
| DOI | https://doi.org/10.1108/eb024909 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 5 Number 1
Ignorance of the law is no excuse for company
directors
Attorney General's Reference No. 1 of 1995
Court of Appeal, Criminal Division: Before the Lord Chief Justice, Brooke J and
Forbes J
Date of Judgment: 23rd January, 1996
Reported at: Times Law Reports, 30th January, 1996
THE FACTS
Section 3(1) of the Banking Act 1987 stipulates
that:
'No person shall . . . accept a deposit in the
course of carrying on a business which for
the purposes of this Act is a deposit-taking
business unless that person is an institution
for the time being authorised by the Bank
[of England] under . . . this Act'.
Section 96(1) stipulates further:
'Where an offence under this Act committed
by a body corporate is proved to have been
committed with the consent or connivance
of, or to be attributable to any neglect on
the part of any director, manager, secretary
or other similar officer of the body
corporate, or any person who was
purporting to act in any such capacity he, as
well as the body corporate is guilty of an
offence . . .'
The two respondents to this appeal were a
director and a deemed director (or 'shadow
director') of an investment and insurance
brokerage company. They had been charged
with consenting to the offence of the carrying
on by the company of an unlicensed deposit-
taking business in contravention of s. 3(1)
Banking Act 1987. The respondents were
completely ignorant of the need for the com-
pany to have a licence and the trial judge
therefore withdrew the s. 3 charges against the
respondents from the jury on the grounds that
they could not have the requisite consent:
'The sole ground upon which I find there is
no case to answer is that which was centred
on the word "consent" in s. 96(1) of the
Banking Act 1987 under which counts 1
and 2 are drawn. It does seem to me that a
section 3 offence is indeed a strict liability
offence, but that it is made otherwise where
it concerns directors or persons purporting
to act as directors; that is each of these
defendants. In that regard I hold that a
particular awareness must be proved, and . . .
evidence adduced of a particular awareness
of the director . . . including a lack of
awareness of authorisation. That lack of
awareness of authorisation . . . requires a
specific application of the conscious mind to
that point. . .'1
The trial judge thought that the use of the
word 'consent' in s. 96 meant that Parliament
required such a specific mens rea on the part of
the director charged whereas the corporate
offence was a strict liability one.
Page 73
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