As of 1 September 2025, a major shift in UK corporate crime law has come into force. Under the Economic Crime and Corporate Transparency Act 2023, the new offence of “failure to prevent fraud” makes large organisations and their subsidiaries criminally liable for fraudulent acts committed by employees, agents, or third parties acting on their behalf.
This offence applies where there is intent to benefit either the organisation itself or its clients. Crucially, there is no grace period for compliance. Companies must immediately be able to demonstrate that they have implemented “reasonable procedures” to prevent fraud, or risk prosecution.
The Serious Fraud Office (SFO) has already signalled that it intends to bring early test cases, making this one of the most significant developments in corporate crime enforcement in recent years.
What Does “Failure to Prevent Fraud” Mean for Businesses?
- Corporate liability: Senior management cannot avoid responsibility by claiming ignorance of fraudulent activity.
- Reputational risk: Allegations of corporate fraud can severely damage investor confidence, client relationships, and public trust.
- Regulatory scrutiny: Businesses under investigation face intrusive investigations and possible parallel regulatory action.
- Criminal prosecution: Convictions may result in heavy fines, sanctions, and long-term reputational harm.
How to Protect Your Organisation
To mitigate risk, businesses should take urgent steps, including:
- Implementing and documenting fraud prevention policies and procedures
- Providing training for employees, agents, and contractors
- Conducting regular risk assessments across all areas of operation
- Seeking specialist legal advice to ensure compliance with the new law
Tank Jowett Solicitors – Expert Defence in Fraud and Corporate Crime
At Tank Jowett Solicitors, we specialise in defending individuals and organisations facing allegations of fraud, financial crime, and corporate misconduct. Our team provides early, strategic advice designed to protect both legal position and reputation at every stage of investigation and prosecution.
Whether you are a director, business owner, or compliance officer, seeking immediate legal guidance is essential to safeguard against liability under this new offence.
For confidential advice on corporate crime or fraud offences, contact our Partners at Tank Jowett Solicitors today.