Change on the Horizon?: The Economic and Corporate Transparency Act 2023 and Failure to Prevent Fraud Offences

Change on the Horizon?: The Economic and Corporate Transparency Act 2023 and Failure to Prevent Fraud Offences

The Economic and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023 in the face of a UK “fraud epidemic”. As described under question 9.3 of the ICLG Corporate Investigations 2024 – England and Wales chapter, two key reforms in the ECCTA to address this epidemic were the introduction of a “failure to prevent” (FTP) fraud offence, and reform of the “identification doctrine” for fraud and other economic crimes.

Broadly, the FTP fraud offence will make “large organisations” strictly liable if an “associated person” commits a fraud offence intending to benefit the organisation, unless the organisation could prove that it had “reasonable procedures” designed to prevent the offending.

The reform of the identification doctrine significantly expands the category of persons who could be “identified with” a commercial organisation for the purposes of attributing criminal liability in economic crimes from “directing minds” (usually Board directors) to “senior managers” (so broadly defined as potentially to include department heads, for example).

BCL’s Tom McNeill, Richard Reichman, Michael Drury, and John Binns give their expert opinion on the reforms in ICLG.

This article was first published in ICLG on 15 May 2024. To read the full article, please click here.

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