Economic Crime and Corporate Transparency Bill completes parliamentary scrutiny

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The Economic Crime and Corporate Transparency Bill was given Royal Assent on Thursday 26 October and is now an Act (law).

The Economic Crime and Corporate Transparency Bill seeks to:

prevent organised criminals, fraudsters, kleptocrats and terrorists from using companies to abuse the UK’s open economy
strengthen the UK’s broader response to economic crime
support enterprise by enabling Companies House to deliver a better service.

Consideration of amendments

The bill was considered by the House of Lords between 30 January and 4 July 2023, before returning to the House of Commons.

Members then considered Commons reasons for disagreeing to Lords amendments (changes) to the bill.

Wednesday 25 October

Members speaking on the final day of 'ping pong' discussed two outstanding issues on the bill.

Legal liability

Lords members proposed to include small and micro organisations as part of a new clause that places legal liability on companies whose staff committ fraud.

MPs agreed to restrict liability to large organisations only and Lords members then accepted the Commons change.

Civil recovery costs

Lords members added an amendment to allow judges to see the specific circumstances of a case before imposing cost orders on the plantiff in civil proceedings where the defendant has won.

The Commons argued this violated the 'loser pays' principle and rejected the proposal, but did suggest the government should look into the possibility and the Lords agreed with the Commons compromise.

Catch up

Explore further information

Read background on the bill in the House of Lords Library Economic Crime and Corporate Transparency Bill briefing.

What's happened so far?

Consideration of amendments day two: Wednesday 18 October

Lords divisions

There were two divisions (votes) on proposed changes to the bill.

Small organisations

The House of Commons had previously agreed to a Lords amendment regarding the legal liability of companies if a member of their personnel commits an act of fraud.

MPs in the Commons had sought to limit this liability to large organisations only, and subsequently rejected further Lords proposals to include 'non-micro' organisations in that remit.

Members of the Lords have now considered a revised proposal to enforce legal liability on 'small organisations'.

Members voted 245 in favour and 204 against, so the revised amendment was agreed.

Enforcement agencies

In previous stages of the bill, members of the Lords agreed to amendments which required courts not to order liable bodies to pay trial costs until certain criteria are met.

MPs objected to these proposals on the grounds they violate the 'loser pays' principle.

In response, the Lords considered a revised amendment which strips down the proposals once again - including the removal of enforcement agency protections from legal costs.

Lords members argued that the amendment is important as it encourages judges to make fair assessments of individual cases, particularly in situations where a successful plaintiff has used expensive legal representation.

Members voted 245 in favour and 209 against, so the change was made.

Catch up

Catch up on Parliament TV
Read the Lords Hansard transcript.

Consideration of amendments day one: Monday 11 September

Members considered Commons reasons for disagreeing to Lords amendments (changes) to the bill.

Lords divisions

There were two divisions (votes) on proposed changes to the bill.

Failure to prevent fraud

During Lords consideration of the bill, members agreed to insert a new clause which makes a 'body' - a company or organisation - legally liable if a member of their personnel commits fraud.

MPs in the Commons agreed with this clause, but added the disclaimer that this should apply to large organisations only.

Lords members have now considered a further amendment, which expands the remit to both large and 'non-micro' organisations and gives a financial explanation to define a non-micro body.

Members voted 211 in favour and 185 against, so the change was made.

Civil recovery costs

During Lords consideration of the bill, Lords members agreed a new clause which compels courts not to give orders that the cost of trial proceedings are met by a liable person or body unless certain criteria are met.

MPs in the Commons rejected this clause, on grounds it may violate the 'loser pays' principle, and instead proposed an alternative which empowers the government to consider and report whether this rule would be beneficial.

The Lords has now considered a new version of the original amendment, which instead makes recommendation for courts not to give such orders, rather than compelling them not to.

Members voted 218 in favour and 186 against, so the change was made and the revised clause inserted into the bill.

Catch up

Read the text of Commons amendments (PDF)
Watch the Parliament TV recording
Read the Lords Hansard transcript

Third reading: Tuesday 4 July

Third reading is the chance for members to ‘tidy up' a bill, making small changes to ensure it is effective.

Proposed changes

A number of government amendments to the bill were put forward ahead of third reading on subjects including:

rules on providing information on those with significant company control, including exemptions
registering beneficial owners of overseas entities.

Members also discussed the passage of the bill at the conclusion of its Lords stages.

Catch up

Report stage day two: Tuesday 27 June

Report stage is a further opportunity to closely scrutinise elements of the bill and make changes.

Members speaking on the final day of report stage put forward amendments (PDF) (changes) to the bill to be discussed.

Lords Divisions

There were  three divisions (votes) on proposed changes to the bill.

'Regimes' and corporate exemption

The first vote was on amendment 110, which inserts a new clause that would remove the exemption for organisations that are not 'large organisations' from the failure to prevent financial sanctions which relate to a specific country or terrorist group, or 'regime'.

Members voted 179 in favour and 176 against, so the change was made.

Failure to prevent fraud and money laundering

The second vote was on amendment 125A, which inserts a new clause that makes failure to report fraud or money laundering an offence.

Members voted 176 in favour and 160 against, so the change was made.

Extending the cap for civil recovery cases

The final vote was on amendment 129, which inserts a new clause that extends the cost cap for civil recovery cases beyond Unexplained Wealth Orders.

Members voted 164 in favour and 150 against, so the change was made.

Catch up

Watch the recording on Parliament TV
Read the Lords Hansard transcript

Report stage day one: Tuesday 20 June

Members speaking on the first day of report stage have put forward amendments (PDF) (changes) to the bill to be discussed.

Lords Divisions

There were  three divisions (votes) on proposed changes to the bill.

Nominee shareholders

The first vote was on amendment 16, which inserts a new clause to require nominee shareholders to declare under whose control their shares are held.

Members voted 218 in favour and 175 against, so the change was made.

Updating the register of overseas entities

The second vote was on amendment 72, which inserts a new clause to require registered overseas entities to register any changes to their details within 14 days.

Members voted 172 in favour and 153 against, so the change was made.

Material available for public inspection

The final vote was on amendment 73a (PDF), which would remove protected trusts information from the list of materials not to be made available to the public.

Members voted 171 in favour and 151 against, so the change was made.

Catch up

Watch the recording on Parliament TV
Read the Lords Hansard transcript

Committee stage day seven: Thursday 11 May

Committee stage is the first chance for line by line examination of the bill.

Members speaking on the seventh and final day of committee stage put forward amendments (PDF) (changes) to the bill to be discussed.