Failure to prevent fraud – What impact will the new offence have on UK companies?

Bourton, Sam

Abstract

In November 2020, the Law Commission were asked by HM Government to undertake a review of the law on corporate criminal liability. In June 2022, the Law Commission published its Options Paper, which suggested the introduction of a new corporate offence for failure to prevent fraud. In April 2023, HM Government announced that a new “failure to prevent fraud offence will make it easier to prosecute a large organisation if an employee commits fraud for the organisation’s benefit”. A Policy Paper has recently been published, which sets out HM Government’s intentions to introduce a failure to prevent fraud offence in the Economic Crime and Corporate Transparency Bill. Under the proposed offence, an organisation would be held accountable if they profit from a fraud committed by an employee. Importantly, the prosecution does not have to illustrate that the organisation’s senior management arranged or knew about the fraud. HM Government have claimed that the proposed offence “will discourage organisations from turning a blind eye to fraud by employees which may benefit them. The offence will encourage more companies to implement or improve prevention procedures, driving a major shift in corporate culture to help reduce fraud”. This presentation will examine the background and rationale behind the introduction of a failure to prevent fraud offence. It will then consider the nature and scope of the proposed failure to prevent fraud offence and its likely impact on companies and professionals.

Citation

Bourton, S. (2023, October). Failure to prevent fraud – What impact will the new offence have on UK companies?. Presented at Chartered Institute of Internal Auditors Event on Culture, Fraud and Ethics, Bristol

• Presentation Conference Type: Speech
• Conference Name: Chartered Institute of Internal Auditors Event on Culture, Fraud and Ethics
• Conference Location: Bristol
• Start Date: Oct 12, 2023
• Deposit Date: Mar 12, 2024
• Publicly Available Date: Mar 13, 2024
• Public URL: https://uwe-repository.worktribe.com/output/11396228