A new wave of Corona-centric litigation is on the horizon. Some of this is going to revolve around legislation that few last year would have connected with epidemics, especially the UK’s Proceeds of Crime Act.

Reasonable owners/occupiers should be aware of the risks posed by the pandemic and should thus use them as a starting point to implement measures that will limit infection exposure as part of their duty of care to connected third parties. An absence of reasonable exposure-reducing provisions (for instance through improvements in cleaning protocols or social distancing measures) may be deemed to be a breach of this duty, if this refusal to act were abundantly gross so that no comparable actor of reasonable character would have acted in the same way. As for a breach being “gross”, this may be provable if it could be shown that the defendant was aware of the manifestly unsafe nature of the premises – for example, by ignoring complaints from staff or HNW customers regarding the conditions. These actions/inactions might satisfy the conditions for corporate or gross negligence manslaughter if failure to rectify the situation – by means of screen separators, better cleaning protocols, repair work, one-way systems, a contingency policy for when a connected third-party displays symptoms, and the like – were to lead to death.

Nevertheless, with both manslaughter offences, causation is likely to be a key issue of which compliance officers connected to potential litigation in the arena should be mindful, considering the nebulous nature of the virus. For the offences to be made out, death must be directly ascribed to a relevant breach of duty, as was recognised in R v HM Coroner for Inner London, ex parte Douglas-Williams [1998] 1 All ER 344: “In relation to both types of manslaughter (i.e. unlawful act and gross negligence) it is an essential ingredient that the unlawful or negligent act must have caused the death at least in the manner described.”

Taking the Coronavirus as a backdrop, will it ever be possible to prove categorically how or where an individual contracted the infection that led to his death? This might be the casethe victim only had outside contact on one set of premises and then spent the rest of his time isolated at home – as did his household. However, due to the generally more relaxed approach to lockdown that most of the UK has experienced over the past few months prior to the provisions of 14th September, it might be problematic to prove that a person conclusively contracted the virus at one specific venue if he had also visited a plethora of different locations. In light of the fact that all elements for manslaughter offences must be proved to the criminal standard (beyond reasonable doubt,will it ever realistically be possible to prove causation to this level in a society that is increasing in interconnectivity?

Money, money, money

Another key consideration is the ability for such conduct to fall within the ambit of legislation that deals with the proceeds of crime. Part 7 Proceeds of Crime Act 2002 contains a range of money-laundering offences. For example, if an owner/occupier becomes aware or suspects that it has generated income from its business as the result of a breach of its health and safety obligations as outlined above, this could render that income “criminal property” as per section 340(3): “property is criminal property if — (a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit.” With this as a starting point, other offences under the Act would have been committed. For example, section 329 stipulates that it is an offence if a person “(a) acquires criminal property; (b) uses criminal property; (c) has possession of criminal property”. If a bank is too lackadaisical in its approach to the safety of its employees or other individuals who enter the premises in order to obtain an economic advantage, any income generated from the running of this unsafe operation could be deemed to be the proceeds of crime.

An important point to note is that in the event of prosecution for a money laundering offence on the basis of Corona-centric liability, a bank (or other connected financial institution) that has had dealings with the defendant should be apprised of the risk that he poses. As a result, the bank would be well advised to conduct “enhanced due diligence” (EDD) with reference to the defendant’s accounts and transaction history to ensure that nobody has used his facility as a vehicle to either harbour the proceeds of crime or to launder money on his behalf.

Continuing to look at the economic impact of Corona-centric liability, on conviction of any of the above offences it might be possible for the prosecution to seek a confiscation order under Part 2 Proceeds of Crime Act 2002 to confiscate such income as the owner/occupier’s “benefit” from the specified offence. When discerning what is meant by “benefit” from a criminal offence, section 7(1) explains that “the recoverable amount…is an amount equal to the defendant’s benefit from the conduct concerned.” The “benefit” is the property derived from the conduct that resulted in the defendant being convicted of a criminal offence, e.g. the financial gain obtained by operating a business in a way that breaches a duty of care.

Part 5 POCA also affords other avenues of attack through the civil recovery of assets generated by the operation of a business in an unsafe manner. If the property or assets in question can be proved to have been “obtained through unlawful conduct”, then that property is deemed recoverable by certain accredited governmental bodies. While useful to the authorities, however, the victims of statutory breaches cannot use this mechanism to recover financial compensation, as there is no provision for private civil recovery.

As a raft of new restrictions are introduced and eased with an almost yo-yo-like effect, what the future holds is anyone’s guess. Compliance officers will be especially interested to see the international response to this emerging platform for risk and liability exposure. Will our litigation-happy friends across the Pond see a similar triggering of their own domestic liability legislation? Will other countries have comparable legislative instruments that contemplate the economic or white-collar-criminal threat presented by the pandemic? The global impact of the virus is on a scale not seen since 1920, so it is therefore likely that the international legal response will be similarly impressive.

However, closer to home, it is prudent for now for compliance officers to be aware of the risks to which their banks and other financial institutions are exposed. As talk of a second wave becomes ever more pronounced, one way to guard against continued interference with business operations is to make every financial institution's premises ‘Covid-secure’ across the board. The risk of infection has become a financial and compliance risk as well.

* Peter Fitzgerald can be reached on +44 (0)20 7822 7785 or at law@petersandpeters.com