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Anoushka Warlow, Partner and Associate, Amelia Clegg share their perspectives, six months on from the introduction of the “failure to prevent fraud” (FTPF) offence under the Economic Crime and Corporate Transparency Act 2023, as there have been no prosecutions or confirmed investigations. While this is not unexpected, given the offence is not retrospective and corporate investigations are complex, it leaves open key questions around who will bring the first case, in what circumstances, and how effective the new offence will be in practice.
Key Points
- No enforcement yet: Despite significant interest, there have been no charges or live investigations under the FTPF offence to date.
- Likely public prosecutors: The Serious Fraud Office (SFO) has expressed a clear ambition to lead the first prosecution, with the Crown Prosecution Service (CPS) also well-positioned given its recent activity in corporate crime cases.
- Private prosecutions in play: Unlike similar offences under the Bribery Act 2010, FTPF does not require consent from the Director of Public Prosecutions, opening the door to private prosecutions by individuals, companies, shareholders or pressure groups.
- Growing trend: Private prosecutions have increased in recent years, often used where complainants are dissatisfied with the pace or priorities of public authorities.
- Strategic advantages: Potential benefits include reputational impact, collective shareholder action, and a more favourable cost framework compared to civil litigation.
- Significant risks: Private prosecutors face strict scrutiny from the courts, particularly around improper motives, evidential standards, and cost recovery.
- Financial exposure: Even successful prosecutions may not guarantee full recovery of costs, especially where courts consider the case should have been brought by public authorities.
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