The UK regulatory landscape for economic crime is undergoing significant change, with the Economic Crime and Corporate Transparency Act 2023 introducing a new corporate criminal offence of failure to prevent fraud which came into force on 1 September 2025 – a significant expansion of corporate accountability. The Serious Fraud Office's Director has explicitly stated that the SFO will be looking for companies to prosecute, adding that it is "very, very keen" to make a prosecution and that if companies haven't "sorted themselves out", the SFO will be "coming after them".
The implications for non-compliance may be very significant – liability is strict and may result in a criminal conviction and potentially unlimited fines. An organisation will have a defence to the offence if it can demonstrate that it had fraud prevention procedures in place (as were reasonable in all the circumstances) at the time that the underlying fraud was committed.
Our December 2025 article is relevant to both UK and foreign in-house counsel due to the offence's broad extraterritorial reach: organisations incorporated or operating in the UK, as well as foreign entities with any UK presence or connection, may face liability for fraud committed anywhere in the world by their associated persons.
The article provides comprehensive guidance for in-house counsel seeking to navigate this new regulatory landscape and implement effective fraud prevention frameworks. We cover the failure to prevent fraud offence in detail, alongside other critical UK economic crime developments, exploring essential questions including:
- Why does the failure to prevent fraud offence need to be taken very seriously?
- What are the key elements of the offence and its extraterritorial scope?
- How should organisations conduct tailored risk assessments?
- How can organisations implement practical fraud prevention frameworks?
- What are the implications of reforms to the identification doctrine for senior managers?
- How are Unexplained Wealth Orders being deployed more aggressively?
- What impact will enhanced whistleblower protections and financial incentives have on corporate compliance?
Our practical guidance covers each compliance requirement in detail, clarifies the reasonable procedures defence, and provides essential implementation steps and drafting tips for fraud prevention policies.
This is the latest instalment in our quarterly series, 'Contentious Matters: essential legal insights for in-house teams'. Designed specifically for in-house legal departments, this series provides practical, in-depth analysis of critical topics in dispute resolution and regulatory compliance.
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