Failure to prevent fraud: key takeaways for directors

New rules mean directors are now responsible for fraud prevention at their organisations so risk management policies must be in place, explain Mark Beardsworth, Duncan Grieve and Sharon Takhar of Signature Litigation LLP

Under the Economic Crime and Corporate Transparency Act 2023 (ECCTA), a new failure to prevent fraud (FTPF) offence became effective on 1 September 2025.

The FTPF offence extends strict corporate liability to several fraud offences. In response, company boards and their in-house legal teams will need to update their risk management frameworks and be prepared for regulatory investigations.

In a timely step, new guidance was also published by the Serious Fraud Office (SFO) and Crown Prosecution Service (CPS): the joint SFO-CPS Corporate Prosecution Guidance details their common approach to the prosecution of corporate offending, including the FTPF offence.

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