Excerpt from JD Supra Article, Published on Jun 19, 2025.
The UK is taking a bold step to combat corporate fraud with the introduction of a powerful new law: the Failure to Prevent Fraud (FTPF) offence. Coming into force on September 1, 2025, the law holds large organisations strictly liable for fraud committed by employees, agents, subsidiaries, or other “associated persons,” even if senior management had no knowledge of the wrongdoing. Modelled after the US False Claims Act (FCA), this new law underscores the UK’s commitment to protecting public funds and enforcing a culture of compliance.
Unlike the FCA, which targets knowingly submitted false claims, the UK’s law imposes liability based solely on a company’s failure to prevent fraudulent acts. The only available defence under the law is demonstrating that “reasonable procedures” were in place to stop such conduct. This creates a powerful incentive for companies to overhaul existing compliance frameworks and adopt proactive fraud prevention mechanisms.
Fraud enforcement is expected to surge under the Serious Fraud Office’s renewed priorities, as the law empowers regulators to target businesses regardless of management awareness. The SFO has made it clear: companies unprepared for this law will be made examples of. With fraud risks emerging across sectors like defence, healthcare, technology, and infrastructure, the urgency to act is growing.
Notably, the law has extra-territorial scope, meaning even foreign companies can be prosecuted if a UK-linked fraud takes place. For instance, a US firm may be held liable if its UK-based staff or overseas agents commit fraud impacting UK interests. Under this law, prosecutors don’t need to prove intent—only that the company benefitted and failed to act.
Legal and compliance teams must realign their strategies to meet the demands of this law. Passive oversight is no longer sufficient. Companies must conduct regular fraud risk assessments, implement targeted training, and maintain real-time monitoring of third-party relationships. With enforcement looming, the message is clear: this law is not just a guideline—it’s a warning. Businesses must take immediate, concrete steps to comply, or risk facing the full force of the UK’s uncompromising new anti-fraud law.
To delve deeper into this topic, please read the full article JD Supra.
