Prime Highlights:

• Large companies can now be held accountable if someone cheats to benefit the business.
• The new law encourages businesses to set up strong anti-fraud systems and protect their reputation.

Key Facts:

• The law applies to companies with over 250 employees, £36 million turnover, or £18 million in assets.
• Fraud cases rose by 31% last year, showing the need for better fraud prevention in businesses.

Key Background:

A new law targeting corporate fraud has come into effect, marking a significant development in business accountability and crime prevention. Large companies can get in trouble if someone cheats to help the business.

Examples of malpractice that can result in violations are fraudulent methods used in sales, concealing information of importance to customers or shareholders, or malpractice in the financial markets. Companies prosecuted under the law will need to demonstrate that reasonable anti-fraud measures were in place.

The legislation applies to large organizations that meet at least two of the following criteria: more than 250 employees, a turnover exceeding £36 million, or total assets of £18 million.

Fraud Minister David Hanson described the law as a “pivotal moment for businesses,” emphasizing that it strengthens anti-fraud culture, builds corporate trust, and supports long-term economic growth. He stressed that those responsible for fraud will be brought to justice.

Legal experts at Irwin Mitchell highlighted that the law represents a “fundamental shift” in corporate responsibility. Unlike previous regulations, there is no longer a need to prove senior management’s involvement. Any company that fails to comply with the law might be fined indefinitely, have its image damaged, and might be investigated by the Crown Prosecution Service (CPS) or the Serious Fraud Office.

Hannah von Dadelszen, Chief Crown Prosecutor for fraud and economic crime, said the law encourages companies to put strong anti-fraud systems in place or risk legal action.

Experts advise businesses to check their fraud risk, improve internal controls, train employees and partners, and make sure whistleblowing procedures are clear.

Fraud cases rose by 31% last year, showing why these steps are important. The new law gives companies a framework to strengthen compliance and protect both their business and the wider economy.

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