With the National Crime Agency reporting that fraud is now the UK’s most prevalent crime, and the Government’s will to see all Covid corruption cases brought to justice, businesses and legal professionals must stay alert to the emerging risks and developments in civil fraud litigation.

Corporate liability and the failure to prevent fraud offence    

An important shift is on the horizon with the introduction of the failure to prevent fraud offence, coming into effect on 1 September 2025, under the Economic Crime and Corporate Transparency Act 2023. This legislation holds large organisations criminally liable if employees or associates commit fraud for the company’s benefit. Notably, this applies to not only financial reporting data but also sustainability claims. Businesses will need to ensure they have robust compliance procedures in place to manage these risks. While boosting such efforts may be costly, the risks of financial penalties and grave reputational harm are much greater.

Crackdown on Covid-19 fraud

The UK Government’s commitment to tackling pandemic-related fraud has been underscored by the appointment of a Covid Counter-Fraud Commissioner in late 2024. With £7.6 billion of suspected fraud linked to PPE contracts, furlough schemes, and government loans, both civil and criminal litigation is set to escalate in 2025.

While criminal convictions are already being secured, a growing wave of civil claims is anticipated. Organisations implicated in these cases face not only legal challenges but also intense public scrutiny. Proactive, transparent engagement will be key to managing reputational risks and maintaining stakeholder trust on all sides.

A new record for Companies House?

Since the provisions of the Economic Crime and Corporate Transparency Act came into effect in April 2024, Companies House can now use a broader set of tools to tackle civil and criminal fraud, the most significant set of reforms to the framework since its inception. New rules mean that all companies must have an appropriate registered office address and are no longer able to use PO boxes, and most significantly, the agency can now share data across government departments and with law enforcement agencies. With Companies House imposing a record £34.4m worth of fines between 2023 and 2024, it is likely these efforts are only set to increase. Businesses should be wary of their obligations or risk facing substantial fines.

As we continue to move through 2025, civil fraud is set to remain a dynamic and high-stakes area of UK law. A proactive approach to fraud prevention should be seen as a non-negotiable for businesses if they want to stay ahead of these trends and effectively mitigate any potential legal risk and reputational damage. Integrated legal and communications advice will be a must in these circumstances.