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Fraud is on the rise: step up to the challenge
The regulatory and policy context Fraud and the law It is only since the introduction of the Fraud Act 2006 that there has been a statutory definition of the criminal offence of fraud in England, Wales, and Northern Ireland. It defines it in three classes: • F raud by false representation; • F raud by failing to disclose information; • F raud by abuse of position. In Scotland, fraud is covered under common law and various statutory offences. The main fraud offences are common law fraud, uttering, embezzlement, and statutory fraud. The Criminal Justice (Theft and Fraud Offences) Act 2001 updates and consolidates the law relating to dishonesty and fraud in the Republic of Ireland. Other pieces of legislation capture fraudrelated offences, such as the Bribery Act 2010, or the Criminal Finances Act 2017. Businesses in the UK and Ireland may also be subject to international regulations, such as the Sarbanes-Oxley Act 2002 (SOX) introduced in the United States.
A changing regulatory landscape Amid increased fraudulent activities and following recent corporate collapses, there have been significant developments in the UK approach to combating fraud. The government’s Economic Crime Plan (201922) has set clear ambitions for combining the capabilities and expertise of the public and private sectors to collaborate on a new approach to address fraud and economic crime. This, among others, has resulted in the Economic Crime Act 2022. The 2022 Queen’s Speech also included an Economic Crime and Corporate Transparency Bill, which aims to strengthen powers to tackle illicit finance and reduce economic crime, including fraud. In June 2021, the Law Commission launched a consultation on behalf of the government seeking views on whether, and how, the law relating to corporate criminal liability can be improved so that they appropriately capture and punish criminal offences committed by corporations, and their directors or senior management. One outcome could be the introduction of a ‘failure to prevent’ offence for forms of economic crime such as fraud. This would be a huge step forward and would help raise the profile of fraud, ensuring there is greater engagement in detecting and preventing fraud.
