2023 saw a raft of UK law reforms concerning economic crime and continued scrutiny of business risk concerning human rights and greenwashing. This is reflected in the blogs our subscribers were most interested in reading in 2023. The focus in 2022 on sanctions and hybrid working topics was replaced with new rules on corporate criminal liability and cases concerning the UK authorities' approach to policing modern slavery supply chain issues and climate disclosures/greenwashing. Operational resilience also proved a popular topic. Here's a reminder of our top five most read blogs in 2023.

1. New failure to prevent fraud offence: Our blog on this new offence was the most read of 2023, which is not surprising given its breadth and extraterritorial reach. The new failure to prevent fraud offence means that a company or partnership can be guilty of a criminal offence where it fails to prevent fraud by an associated party which was intended to benefit the company and/or its clients and customers. The only defence is having adequate procedures in place to prevent fraud. Government guidance on this defence is expected late Spring, with the new offence coming into force later this year. Our white collar crime experts explained how the offence works, and how businesses can start preparing for it coming into force.
2. New rule on corporate attribution: Another significant change to corporate criminal liability was the new rule on corporate attribution which means that the conduct of a broader range of employees can trigger corporate liability for economic crime. The old ‘directing mind and will’ test has been enhanced with a new ‘senior manager’ test. The Criminal Justice Bill proposes to extend the new rule to all crimes. Our blog explained the impact of the new rule, which came into force on 26 December 2023, and how businesses should prepare.
3. Supply chains and money laundering: We wrote about why an English court ruling revealed the approach of UK enforcement authorities to the question of money laundering risks where there is potential forced labour / modern slavery in a supply chain. The ruling is of interest to businesses that have identified these risks in their supply chains, when determining the potential regulatory consequences that flow from them. Permission to appeal was granted, with the hearing expected in May.
4. Greenwashing litigation: A new wave of litigation is underway that seeks not damages but corporate accountability. A unexpected example of this in 2023 was environmental charity ClientEarth challenging a decision by the UK Financial Conduct Authority (the FCA) to approve a prospectus of an energy company on the basis that it contained inadequate climate-related disclosures. The challenge was mounted via an application for judicial review. Amongst other things, ClientEarth alleged that the prospectus did not explain how climate change risks affect the specific business of the company, or how significant those risks were to the company, and that it did not sufficiently cover the impact of the Paris Agreement on the company’s business and finances. The application was ultimately unsuccessful but highlights the energy NGOs are investing in holding corporates to account on climate-related matters.
5. Regulatory scrutiny of operational resilience: Our most-read blog on FCA and PRA (Prudential Regulation Authority) enforcement themes and trends was the one focusing on operational resilience. Since November 2022, the FCA and PRA have announced a number of significant enforcement actions relating to operational resilience issues, including a fine against a Senior Manager for failing to take reasonable steps to discharge their regulatory obligations. Collectively, the fines imposed on the firms in these actions totalled almost £60 million. We will shortly be publishing our thoughts on the enforcement themes and trends for 2024, one of which will be continued FCA and PRA scrutiny of firms’ operational resilience.

We will continue to monitor developments in 2023.

These blog posts all appeared on the Allen & Overy Investigations Insight blog, which focuses on cross-border financial crime and investigations issues.