Corporate ‘failure to prevent’ offences have proven to be an effective means of encouraging organisations to adopt and maintain internal systems and procedures to prevent the commission of specific financial offences. Since the introduction of the offence of failing to prevent bribery under section 7 of the Bribery Act 2010 (BA 2010) in 2011, two corporate criminal offences of failure to prevent the facilitation of UK and foreign tax evasion under sections 45 and 46 of the Criminal Finances Act 2017 (CFA 2017) were introduced in 2017 and the offence of failing to prevent fraud under the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) which commenced on 1 September 2025. This increase in the scope and number of failure to prevent corporate offences is part of an acknowledged aim by successive governments to expand the scope of corporate criminal liability to encompass a broader range of economic crime, from which a corporate body might benefit. For more information on corporate criminal liability, see Practice Notes: Corporate criminal liability and Corporate criminal liability reform—tracker. For information on the offence of failure

This Practice Note discusses the two ‘failure to prevent’ corporate criminal offences created by the Criminal Finances Act 2017 (CFA 2017): • CFA 2017, s 45 creates the offence of failing to prevent the facilitation of a UK tax evasion offence(s) (UK tax evasion facilitation offence) • CFA 2017, s 46 creates the offence of failing to prevent the facilitation of a foreign tax evasion offence(s) (foreign tax evasion facilitation offence) Both are strict liability offences, subject to a ‘reasonable procedures’ defence available to those who can prove that they have maintained reasonable procedures intended to prevent the facilitation of the underlying tax evasion offences. This Practice Note sets out the elements of the two offences as well as the defences created by CFA 2017. The offences are part of a wider package of measures intended to tackle tax evasion and its facilitation, not only in the UK but globally. They are ideologically related to the civil and criminal enforcement measures created by the Finance Act

Two separate offences are contained within sections 45 and 46 of the Criminal Finances Act 2017 (CFA 2017), namely, the failure to prevent the criminal facilitation of a UK tax evasion offence (the UK tax evasion offence) and the failure to prevent the criminal facilitation of a foreign tax evasion (the foreign tax evasion offence). Both are strict liability offences, subject to a ‘reasonable procedures’ defence available to those who

Restructuring and Insolvency analysis: The applicant trustee in bankruptcy failed in his case that the transfer of the bankrupt’s 50% interest in a matrimonial home six years prior to bankruptcy and 12 years prior to the issue of the claim had been ineffective in equity, and therefore failed to establish that a subsequent transfer of that interest had taken place at an undervalue. The trustee’s alternative case that the transfer was for a purpose prohibited under section 423 of the Insolvency Act 1986 (IA 1986) failed on the balance of probabilities, notwithstanding the judge’s rejection of much of the respondent’s evidence. A further case that the husband had entered into a prohibited transaction by consenting to a disposition of the property was rejected as being obviously flawed, as was the trustee’s valuation evidence. This case is a salient reminder to office-holders and their advisors to assess their claims critically and to ensure that there is sufficient (documentary) evidence available which proves their case. This is particularly important where, as here, a prohibited purpose is alleged under IA 1986, s 423 and the transactions under scrutiny took place a significant time prior to the bankruptcy (and the claim). Written by Hugh Miall, barrister at XXIV Old Buildings.

Dispute Resolution analysis: HHJ Lopez, in a case on appeal in the Birmingham County Court, has upheld the striking out of the claimant’s case. The strike out was on the basis that an application to extend time for service had not been received by the court prior to expiry of the time for service and the claimant was unable to meet the stringent test under CPR 7.6(3) for an extension of time—this test includes the requirement that the claimant has taken all reasonable steps to comply with CPR 7.5 but has been unable to do so.

Planning analysis: In Greenfields, the Court of Appeal quashed a grant of planning permission on the ground that the authority failed to publish the section 106 planning obligation prior to granting planning permissionr). Publication of the heads of terms in the planning officer’s report did not constitute substantial compliance, as the heads of terms were not sufficiently detailed to allow the public to know the terms of the planning obligation and to comment on it if they chose to do so. Local planning authorities must publish a proposed or agreed planning obligation before granting planning permission, otherwise, the planning permission is liable to be quashed by the courts. However, it may be possible to avoid quashing if the authority can show that there was substantial compliance with the requirement, and no prejudice was caused. Written by Victoria Searle, principal associate at Browne Jacobson.

Background This Practice Note summarises the statutory provisions of the Companies Act 2006 (CA 2006) and other legislation that apply in the event of a company’s failure to re-appoint an auditor. Section 18 and Schedule 5 of the Deregulation Act 2015, which came into force on 1 October 2015, made a number of changes in relation to auditors, which include provisions dealing with a company’s failure to re-appoint an auditor. These provisions have effect in relation to financial years beginning on or after 1 October 2015. For details of the statutory provisions in relation to financial years beginning before 1 October 2015, see archived Practice Note Failure to re-appoint an auditor—financial years beginning before 1 October 2015 [Archived]. There may be other rules relating to the removal and resignation of an auditor that apply to a listed company, an AIM company or a company with securities that are listed on the AQSE Main Market or AQSE Growth Market (formerly the NEX Exchange Main Board or NEX Exchange Growth Market) but these are outside the scope of this

ARCHIVED: This archived Practice Note summarised the statutory provisions of the Companies Act 2006 (CA 2006) that applied in the event of a company’s failure to re-appoint an auditor in relation to financial years beginning before 1 October 2015. Section 18 and Schedule 5 of the Deregulation Act 2015, which came into force on 1 October 2015, made a number of changes in relation to auditors, which include provisions dealing with a company’s failure to re-appoint an auditor. These provisions have effect in relation to financial years beginning on or after 1 October 2015. For details of the statutory provisions in relation to financial years beginning on or after 1 October 2015, see Practice Note: Failure to re-appoint an auditor. There may be other rules relating to the removal and resignation of an auditor that apply to a listed company, an AIM company or a company with securities that are listed on one of the Aquis Stock Exchange (formerly NEX Exchange) markets but these are outside the

Dispute Resolution analysis: the Companies Court has refused an application for relief from sanctions. The key determinate in this case was the failure of the applicants to address problems with OCR documents during disclosure and to adduce proper evidence to explain the issues encountered. The judgment also highlights that such application should be dealt with at first instance, the breach of an unless order had been determined by the Court of Appeal. It also considered that the scope of the enquiry as to whether to grant relief was not limited to the one issue considered by the Court of Appeal, on which relief would have been granted, but all alleged breaches of the Unless Order.

The offences of failing to secure regular attendance at school The Education Act 1996 (EA 1996) imposes criminal liability on a parent who fails to ensure that their child receives regular education. All the offences created by EA 1996 are summary only, which means they can only be tried in the magistrates' court. See Practice Note: Education Act offences. Before taking legal action, the local authority must consider whether they should apply for an Education Supervision Order. See Practice Note: Education supervision orders. Statutory guidance has been issued to assist with improving school attendance which gives guidance on when prosecution is appropriate. Generally, prosecution should be considered a last resort where all other voluntary and formal support has failed. EA 1996 creates two offences relating to the failure of a parent to secure a registered pupils's attendance at school. The first offence under EA 1996, s 444(1) is a strict liability or absolute offence. Proof of the parent's mental state is not required. The prosecution must prove that: • a child of compulsory

Property Disputes analysis: In this case, the Supreme Court held that failure to serve a claim notice on one landlord did not automatically prevent the transfer of the right to manage under the Commonhold and Leasehold Reform Act 2002 (CLRA 2002). Written by David Jones (associate) & Mark Barley (partner) at Womble Bond Dickinson.

Dispute Resolution analysis: This High Court judgment highlights the importance of claimants setting out carefully the nature of their claim. Morgan J considered that the relevant claims in these proceedings had not been adequately set out in an early claim form (as it had been amended) with the result that such actions were not regarded as having been made until a subsequent claim form was issued and they were accordingly time-barred. James Hall, barrister at Hardwicke and who appeared for the first defendant in this case, considers the decision and its practical implications.