New legislation coming into force in the United Kingdom will shift the onus onto businesses to act as police officer, informant and star witness in the fight against fraud, McGuireWoods London partner Francesca Titus wrote in a Feb. 20, 2025, article in The Times.
The Economic Crime and Corporate Transparency Act 2023 — the key part of which comes into force in September — creates an offense aimed at holding organizations liable when employees, agents, subsidiaries or other “associated person” commits a fraud intended to benefit the organization. There is only one defense, which puts the burden on the company to have reasonable fraud prevention procedures in place, Titus said.
“There is no other area of criminal activity where the witnesses or victims are made responsible for preventing crime, gathering evidence and investigating wrongdoing,” Titus wrote. “The way to fight fraud is by having a powerful deterrent and efficient law enforcement that takes swift and decisive action against wrongdoers, not by passing the buck to business.”