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ARTICLE · 13 OCTOBER 2025

Understanding ECCTA: What Is The "Reasonable Procedures" Defence And How Does It Affect Your Contracts?

Gowling WLG
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As of 1st September 2025, large companies in the UK are exposed to criminal liability if they fail to prevent fraud carried out for the benefit of their employees, agents, subsidiaries, or other "associated persons"...

United KingdomCriminal Law
Catherine Naylor
Catherine Naylor
David Lowe
David Lowe
Rachel Pennell
Rachel Pennell
Author LinkedIn connections

As of 1st September 2025, large companies in the UK are exposed to criminal liability if they fail to prevent fraud carried out for the benefit of their employees, agents, subsidiaries, or other "associated persons" under the Economic Crime and Corporate Transparency Act (ECCTA) 2025. This new UK fraud prevention law introduces the "failure to prevent fraud" offence, which applies to large organisations and carries the risk of unlimited fines.

A possible defence is to demonstrate that "reasonable procedures" are in place to comply with ECCTA guidance. We take a look at what role contract wording plays as part of those reasonable procedures and how it aligns with ECCTA compliance, fraud risk assessment, and UK government fraud offence guidance.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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