As the UKs leading law firm that specialises in prosecuting white-collar crime, we welcome the Home Office’s amendment to the Economic Crime and Corporate Transparency Bill which will introduce a failure to prevent fraud offence.
This amendment aims to provide a deterrent to large organisations that may be inclined to turn a blind eye to fraudulent activities committed by their employees for the organisation’s benefit. The proposed amendment aims to encourage businesses to take more responsibility for the prevention of fraud and improve their fraud prevention measures.
With fraud accounting for 41 per cent of all crimes committed in England and Wales, it is right the Government is acting to clamp down on this activity. But this cannot be the only step. Law enforcement agencies such as the Serious Fraud Office need the capabilities to prosecute offences effectively.
This cannot be achieved by the public sector alone – we need to foster a healthy and productive public/private partnership to prosecute those who benefit from the proceeds of fraud, and importantly, recover their ill-gotten gains for the benefit of their victims. A private prosecution can often be a more realistic and cost-effective route in cases involving complex financial crime, where state enforcement agencies may lack the understanding, expertise, and resources to make it a high priority and bring about a successful prosecution.
Given the current fraud epidemic, having observed and prosecuted cases both on behalf of the State and privately, EMM is in a unique position to provide an informed perspective on how the public and private sectors can work together to boost prevention, investigation, and prosecution. We were delighted that our approach with MacMillan Counter Fraud was recognised by Baroness Neville-Rolfe, the Cabinet Office Minister who oversees the PSFA, at the recent Public Sector Fraud Awards.
Further public/private collaboration is needed to tackle fraud in the UK, and this is why we also welcome Dame Meg Hillier’s recent report into government fraud. The Public Accounts Committee specifically called for greater collaboration with the private sector.
In what may be seen as Government trying to do more to combat fraud, the Prime Minister announced Machinery of Government changes by shifting ministerial responsibility for the Fraud Act 2006 to the Home Office from the Ministry of Justice. The PM also commented that law enforcement and the private sector need to be coordinated in detection and prosecution of fraudsters.
This is why EMM has been working with the newly established Public Sector Fraud Authority (PSFA) to explore areas in which private prosecutions can help to enforce the Government’s ambitions in this space. EMM have a long and successful history of prosecuting on behalf of organisations that receive government funding, and our team includes experienced former state prosecutors. We hope to explore ways in which we can work collaboratively to reduce and prosecute fraud against the public (and private) sector.
We support the approach of holding companies to account for fraudulent practices, and we believe that it is essential to have a legal framework that encourages ethical business practices. This new legislation will help protect the integrity of the economy and the public’s confidence in the corporate sector.
We look forward to the publication of the guidance on reasonable prevention measures, and we hope that the new legislation will be enforced in a fair and consistent manner to promote a more ethical business environment.
Tamlyn Edmonds, Kate McMahon, Andrew Marshall and Ashley Fairbrother
