Fraud reforms in force

The Act, which came into force last week, boosts Companies House’s powers to verify the identities of company directors, remove invalid registered office addresses and share information with criminal investigation agencies. This will help prevent criminals hiding behind false names or using opaque companies to disguise money laundering.

Judges will have additional powers to dismiss strategic lawsuits against public protection (SLAPPS) where these are being used to stifle information concerning economic crime.

The Act gives the courts greater powers to seize, freeze and recover cryptoassets. It creates a ‘failure to prevent fraud’ offence to hold large organisations criminally liable if they benefit from a fraud committed by a member of staff, and updates the identification doctrine to extend liability to the actions of senior managers.

Tony McClements, head of investigations, Martin Kenney & Co, said: ‘In particular, I welcome the effort to overhaul Companies House… the information was mostly unverified and effectively worthless in the context of investigation.

‘However, at the risk of sounding underwhelmed, as a former fraud squad detective I am eager to see how the legislation will be utilised by law enforcement whose focus and priorities appear to lie elsewhere—hence the UK’s appalling record in bringing fraudsters to justice. Drafting legislation to close loopholes in order to frustrate fraudsters and the corrupt is admirable, but without the human resources and infrastructure to implement it, the value of the legislation is immediately undermined.’

The Act also amends the Legal Services Act 2007, introducing a regulatory objective of preventing and detecting economic crime.

Law Society president Nick Emmerson said: ‘Under the Act, the SRA can now issue unlimited fines in relation to economic crime offences [instead of the previous £25,000 maximum].

‘However, we strongly urged the government to carefully consider the proportionality of any further increases to the SRA’s fining powers, given that its fining powers increased from £2,000 to £25,000 as recently as July 2022. There is no evidence that the current fining powers are insufficient.’ Emmerson said the Solicitors Disciplinary Tribunal already has unlimited fining powers.