Emma Carr
Partner
Commercial Litigation Partner and
Co-Chair of ThinkHouse
Article
As the new corporate offence of failure to prevent fraud under the Economic Crime and Corporate Transparency Act (ECCTA) becomes effective from 1 September 2025, businesses must now navigate a major change in corporate liability.
This FAQ answers some common questions and outlines what general counsel and compliance leaders must consider to prepare for the changes and implement effective fraud prevention measures.
Under Section 199 of ECCTA, a “relevant body” (i.e. a large organisation) commits an offence if:
This is a strict liability offence — no need to prove senior management involvement.
Get to grips with everything you need to know regarding the failure to prevent fraud offence with our in-depth guide.
The Act does not legally require the introduction of risk-based prevention procedures or measures. However ,failing to act is unlikely to suffice to demonstrate that an organisation had adequate safeguards in place if fraud subsequently occurs. Taking proactive steps now is crucial. At a minimum, you should:
Doing nothing is not a defence. Businesses who do not act face limitless fines, reputational harm, and possible regulatory oversight.
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.