Failure To Prevent Fraud Offence To Be Introduced

The Government "is creating a new failure to prevent fraud offence to hold organisations to account if they profit from fraud committed by their employees" (The Policy Paper, updated on 20 June 2023).

That is particularly interesting, in light of the Supreme Court decision in Philipp v Barclays Bank UK PLC [2023] UKSC 25 handed down less than a month later, on 12 July 2023.

In Philipp, the Supreme Court held that Barclays did not have a duty (sometimes called a Quincecare duty) not to carry out Mrs Philipp's payment instructions in circumstances where she alleged that the bank had reasonable grounds for believing that she was being defrauded.

There was no suggestion in that case that the bank had profited from the fraud but the Supreme Court looked at the policy considerations as to whether the victim or the bank should bear the loss.