Don’t run the risk

by Mark Rowe

Security companies and their directors are still running the risk of sanctions by operating without a licence or in contravention of licence conditions, writes Andrew Logan, head of regulatory at law firm Gordons. Risk from non-compliance is for individuals, not just their company, he points out.

As of November 2019, the Security Industry Authority (SIA) was conducting 55 criminal investigations involving 52 businesses and 129 individuals. Data published on its website shows 39 prosecutions have been initiated by the SIA in the last 12 months. Clearly there are still organisations and individuals willing to flout the law when it comes to security licensing.

Understanding the Act

The Private Security Industry Act 2001 was introduced to improve public safety, by ensuring that individuals placed in certain positions of trust had been checked and vetted, and were properly qualified and trained to do their job. It set out a range of offences for both individuals and organisations, from engaging in licensable conduct without a licence and contravening licence conditions, to employing unlicensed persons engaged in licensable conduct and falsely claiming approved contractor status. It also saw the formation of the SIA and its Approved Contractor Scheme (ACS).

Crucially, “where an offence is committed by a body corporate and is committed with the consent or connivance of, or attributable to any neglect on the part of a director, manager, secretary or other similar officer of the body corporate, then that person is guilty of the offence and can be punished accordingly.” In simple terms, company directors and other individuals employed at a company can be found to be criminally culpable if their business is not operating within the law.

The risk for directors and officers

Where the SIA is carrying out an investigation into a company, then as part of that inquiry the SIA can require a director or other officer to attend for an interview under caution. It is imperative that those individuals who are to be interviewed have legal representation so they can be properly advised of their options and also personal risks. It is not uncommon where individuals are to be interviewed as a representative of the company to also be interviewed at the same time as a suspect in their own right.

However, it seems too many directors are still not aware of the personal implications if they are interviewed under caution by the SIA.

In such cases, it is the director, as well as the company, who can be prosecuted. Where the SIA, secures a summary conviction, the Magistrates Court can impose a maximum sentence of six months imprisonment and/or an unlimited fine (England), up to £10,000 (Scotland) or up to £5,000 (Northern Ireland).

Perhaps more significantly for those owner managers of a security company is that a criminal conviction can also mean that they are no longer eligible to hold an SIA licence. The impact of a conviction can in some cases lead to the court disqualifying them from being a company director.

You only have to look at the enforcement section of the SIA website to see the implications. In April 2019, Philip Evens was handed a 12-month community order with 170 hours of unpaid work for engaging in licensable conduct without a licence (section 3 PSIA 2001). In January 2019, Lee Szuchnik was convicted of seven offences of supplying unlicensed security personnel and given an 18-month custodial sentence for each offence, together with another offence under the Fraud Act 2006. The list goes on.

Whilst most companies act diligently to ensure compliance with the rules, sometimes mistakes can occur. Even in those circumstances the SIA can bring a criminal investigation to ascertain the facts of any non-compliances. If the SIA wants to speak with you and/or your company then it is essential that you get timely legal advice.

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