Fraud litigation surges in UK as businesses fight back
The number of fraud claims issued to the High Court has increased as ‘fraud in society’ has surged, forcing British businesses to fight back.
New data from law firm Stewarts revealed that the number of legal actions over fraud issued to the England and Wales High Court has remained consistent since 2020, with a slight increase in 2024.
The Commercial Court is typically the most popular venue for commercial fraud litigation; however, between 2023 and 2024, the General Division of the High Court became the most frequently used court.
The report indicated an increase in lower-value or less complex claims being filed.
Banking and finance were highlighted as the sectors that have been most impacted by fraud claims.
That is because British businesses are facing an all-time high level of fraud, with hundreds of billions of pounds being lost yearly by criminals. A report by Crowe UK and Peters & Peters revealed the UK economy loses approximately £219bn annually due to fraud.
The only way for businesses to recover what was stolen from them is to seek legal action.
Charlie Mercer, senior associate at Stewarts, explained, “Fraud litigation remains very active in the UK and that these types of claims have increased over the last decade”.
“This would most obviously be driven by an increase in fraud in society more widely, but could also be attributed to other factors, such as parties and their advisers being increasingly sophisticated and knowledgeable about what claims may be available,” he added.
However, the next few months will remain critical for businesses as the Failure to Prevent Fraud Offence law comes into force on 1 September.
The new law targets large businesses as defined as having more than 250 employees, a turnover of more than £36m, or total assets of more than £18m. Speaking exclusively to CityAM, last November, the Serious Fraud Office director Nick Ephgrave explained: “This law, by making every large company legally responsible for preventing fraud by their employees, enables us to take action if they fail in that duty.”
Alex Jay, partner at Stewarts pointed out that “Many [businesses] will already now have their procedures in place or will be finalising them. The market will be awaiting the first cases to emerge from this, as well as any related litigation.”