Disputes Yearbook 2025:
Corporate crime and investigations

Companies can be liable for failing to prevent fraud from September 2025

We reported last year that the new offence of failure to prevent fraud would come into force on 1 September 2025. Companies within scope of the offence should therefore now be aware that they may face criminal liability for fraud committed by their "associated persons" unless they can demonstrate that they have in place "reasonable prevention procedures". The Serious Fraud Office (the SFO) regards the new offence as a "landmark moment which will widen the reach and breadth of prosecutions" and so will be looking for appropriate cases in which to deploy this new tool in 2026 and beyond.

A summary of the offence and guidance on reasonable procedures can be found here. 

Further expansion of corporate criminal liability

In December 2023, under the Economic Crime and Corporate Transparency Act 2023 (ECCTA), the UK introduced a significant change to the way in which criminal liability may be attributed to corporate entities. Prior to that time, a company could only commit a criminal offence requiring a particular mental state (knowledge, recklessness etc.) if the mental state of a senior person representing the company's "directing mind and will" would be attributed to the company. This had typically been considered to require one or more members of the board to hold the requisite mental state.

ECCTA broadened the scope of the so-called "identification doctrine" by providing that companies could also be liable for acts of "senior managers" in respect of "relevant offences". "Relevant offences", listed in a schedule to ECCTA, are focused on economic crimes such as bribery, money laundering etc. However, a new Crime and Policing Bill would expand this rule to all offences. The Bill is currently passing through Parliament and so the provisions remain subject to change but, if enacted, there is scope for this to further expand the potential scope of corporate criminal liability by dramatically increasing the range of offences for which an organisation can be liable, subject to the requirement that the relevant senior manager was acting within the actual or apparent scope of their authority when they committed the offence thereby making it more difficult to see how some offences (such as offences against the person) could engage corporate criminal liability.

Please see here for further detail. 

The role of the SFO in the fight against fraud

Last year's update covered the new five-year strategy from the SFO highlighting the need for the agency to play a greater role in the national effort to tackle fraud. 2025 has seen continued steps to implement that strategy by the SFO, including a renewed focus on international collaboration (discussed in more detail here and here), new guidance on cooperation and enforcement (see here), and updated guidance on corporate compliance programmes (see here). The SFO's business plan for 2025/6 provided an update on the SFO's successes following the launch of its five-year strategy (see here) and, importantly, stated that "both scrutiny and expectations of companies will increase" in the current national and international landscape. 

Companies should therefore continue to monitor the position closely; in the event that fraud or corruption issues arise internally, understanding of the SFO's position and stated approach can prove critical when considering how such issues should be addressed. 

Criminal justice reform – a move to judge-only trials?

Crown Court backlogs now exceed 75,000 cases, with fraud trials among the most affected due to the scale of disclosure and complexity of evidence. The average time to resolve fraud cases in the Crown Court has nearly doubled since 2019 and delays in cases coming to trial are now measured in years, not months. 

In response, the Ministry of Justice appointed Sir Brian Leveson to conduct an independent review of the criminal courts. The first part of this review sets out a blueprint for reform which is bold and pragmatic and in some respects controversial. Of particular note is the recommendation that serious and complex fraud cases be tried by a judge alone, with eligibility defined by the case's hidden dishonesty or complexity that is outside the understanding of the general public. At the time of publication, the Ministry of Justice had just announced a modernisation plan in response to this recommendation, adopting judge-only trials for "particularly technical and lengthy fraud and financial offences" (together with other categories of offence less relevant to corporate defendants). The proposed changes will require the passage of legislation and have generated a strong response, such that it remains to be seen when and how the reforms will be implemented. However, if adopted, this change this would mark a significant departure from current practice, demanding a recalibration of trial strategy, case preparation and advocacy for corporate defendants.

See here for more on the Leveson review and its recommendations and here in relation to a separate review of the criminal disclosure regime by Jonathan Fisher KC. 

The rise in activism and weaponisation of the criminal law

Action groups and NGOs are finding novel ways to use the criminal law, both in the UK and overseas. We have experience of assisting clients responding to allegations brought by action groups, which are often unfounded and intended to raise publicity in respect of a specific cause or against an organisation/its senior executives, but require a quick response to minimise potential exposure. Even unfounded allegations can create criminal and regulatory exposure, reputational risk and significant cost.

Recent examples in the UK include:

• our recent representation of the former CFO of Hibu plc in a shareholder-led private prosecution (the first of its kind);
• trends in NGOs seeking to exert pressure on exchanges in order to prevent the listing, or encourage the de-listing, of listed companies in the UK; and
• attempted "citizens' arrests" of senior executives of energy and water companies alleging that they were under "arrest" and dossiers of "evidence" including draft indictments were handed to the police.

Potential reforms to UK sanctions enforcement

The UK Government has carried out a cross-government review of sanctions implementation and enforcement with three key aims: (i) to improve and facilitate compliance; (ii) to increase the deterrent effect of enforcement; and (iii) to invigorate the cross-government toolkit. 

In addition to enhancements around the accessibility and organisation of sanctions guidance, a key development arising from the review was a public consultation on financial sanctions enforcement. Various new initiatives are under consideration, including a settlement scheme for the resolution of enforcement cases, implementation of a fixed penalty scheme for certain sanctions breaches such as non-compliance with reporting obligations and breach of licensing conditions and an increase to the statutory maximum penalties for financial sanctions breaches. The consultation has now closed and we await the Government's response and potential next steps, which may support the continued move towards civil (as opposed to criminal) settlement of financial sanctions breaches through various mechanisms designed to prioritise speed and certainty of outcome.

See our previous briefings on the review and the consultation for further detail. 

Snapback of sanctions against Iran

While the UK and other jurisdictions have continued their incremental escalation of sanctions against Russia, companies will also need to be cognisant of the recent re-imposition of sanctions against Iran and to ensure that these measures are also reflected in their sanctions compliance controls.

The UN lifted various sanctions measures imposed in relation to Iran's nuclear programme in connection with the Joint Comprehensive Plan of Action or Iran Nuclear Agreement in 2015. Following the US withdrawal from the agreement and Iran ceasing to implement its commitments in relation to the nuclear programme, the "snapback" mechanism within the agreement was triggered by the UK, France and Germany, resulting in the re-imposition of the previously suspended UN measures which include asset freezes and trade sanctions measures. 

The EU and UK have implemented those measures in local legislation, and the EU has introduced autonomous sanctions to reflect the suite of EU measures in force prior to the Iran Nuclear Agreement. Further detail can be found here.