Global Investigations Review quotes Rhys Novak on the UK government’s new guidance on complying with its forthcoming failure to prevent fraud offence

The UK government’s new guidance on complying with its forthcoming failure to prevent fraud offence will drive companies to change how they think about fraud.

The offence of failure to prevent fraud will come into force on 1 September 2025, this gives organisations around nine months to develop and implement their fraud prevention procedures.

Rhys Novak, Partner, says that he expects to see a sea change in many organisations from only thinking about stopping frauds from external actors that are aimed at damaging an organisation to also stopping frauds committed by employees, agents and other associated persons that can be seen to benefit their organisation.

Rhys speaks to GIR and says the failure to prevent fraud guidance can feel "diffuse" when compared with the Bribery Act Guidance.

This can be explained – at least in part - by the fact that when the Bribery Act came out, companies had "a body of publicly available know-how, policies, procedures, and pro formas which could serve as starting points to build out their compliance approach,  largely as a result of the fact that the FCPA had been around since 1977 and the US had a head-start.

"While a lot of advice on anti-bribery policies was available then, there is nowhere near the same amount available in the anti-fraud context and companies should be very hesitant to try to replicate their 2010 models for fraud.

"Fraud for these purposes is any number of things – almost unlimited in scope - whereas bribery is easier as a concept to understand. So, any suggestion that companies can just roll out similar policies to their UK Bribery Act policies is going to be misplaced. While the principles are the same, the application of those principles is going to be vastly different.

"Because the definition of fraud is so wide, this guidance couldn't do anything more than provide a structure and signposts, almost a checklist, about what companies need to be thinking about when they approach these procedures

Read the full piece in Global Investigations Review here (subscription required).