Briefings: strengthening the new failure to prevent fraud offence by ensuring it applies to all companies except micro-businesses, and introducing cost protection for law enforcement in civil recovery cases

8 September, 2023 | 0 minute read

On Monday 10 September Peers voted through amendments 151B and 151C – sponsored by former Conservative Solicitor General Lord Garnier – which would exempt only micro-businesses from the new failure to prevent fraud offence in the Economic Crime and Corporate Transparency Bill. Micro-businesses are defined as having a turnover of less than £632,000, a balance sheet of less than £316,000, and fewer than 10 employees. This represents a major concession to government in light of concerns that including all SMEs in the new offence would impose burdens on small businesses.

Peers also passed amendment 161B which would mean a court should not normally order costs against law enforcement authorities when they try to seize criminal assets through civil recovery proceedings under the Proceeds of Crime Act. The amendment guards against law enforcement overreach by allowing for costs to be ordered if a court decides that it would be in the interests of justice. It won by a large margin (218 content, 186 not content) with support from all parties.

These briefings set out why MPs should support Lords amendments 151B, 151C, and 161B when they are considered in the House of Commons.