Legal investigations and enforcement actions in today’s rapidly evolving landscape

Kathleen Harris, Sean Curran, Maya Paunrana, Melissa Dames and Joy Wee
Arnold & Porter

In summary

The United Kingdom’s enforcement environment presents increasing risk and complexity for businesses and senior executives. Expanded corporate criminal offences, increased sanctions enforcement and evolving approaches by key regulators have significantly altered the investigative landscape. At the same time, authorities are developing further investigative tools, while placing greater emphasis on cooperation, self‑reporting and remediation. This article provides a practical overview of the United Kingdom’s investigation and enforcement framework, highlighting current priorities, procedural protections and strategic considerations for organisations navigating criminal, regulatory and civil scrutiny.

Discussion points

• The introduction of a new “failure to prevent” offence and an expanded senior‑manager attribution test
• UK authorities’ increasing enforcement activity in relation to financial and trade sanctions, cryptoassets and professional services
• Search and seizure powers, disclosure obligations, digital evidence handling and legal professional privilege
• Divergent investigative powers and settlement mechanisms across enforcement bodies

Referenced in this article

• Economic Crime and Corporate Transparency Act 2023
• Bribery Act 2010
• Criminal Finances Act 2017
• Police and Criminal Evidence Act 1984
• Financial Services and Markets Act 2000
• Criminal Justice Act 1987
• Criminal Procedure and Investigations Act 1996

Trends in corporate enforcement and areas of misconduct

Fraud is currently a key focus area for the UK government. The strict liability “failure to prevent fraud” (FTPF) offence came into force on 1 September 2025 under section 199 of the Economic Crime and Corporate Transparency Act 2023 (ECCTA). A large organisation will be criminally liable for FTPF if an associated person (eg, employee or agent) commits a specified fraud offence intended to benefit the organisation, and the organisation cannot demonstrate that it had reasonable fraud prevention procedures in place.

The Crown Prosecution Service (CPS) and Serious Fraud Office (SFO) have issued joint guidance on corporate prosecutions highlighting the range of available “failure to prevent” offences (failure to prevent bribery under section 7 of the Bribery Act 2010, failure to prevent facilitation of domestic and foreign tax evasion under sections 45 and 46 of the Criminal Finances Act 2017 and FTPF).

Another focus for the government is holding companies to account for the actions of their employees. The SFO-CPS joint guidance also considers the lowering of the threshold to attribute liability to corporates for certain economic crimes committed by “senior managers” acting within the actual or apparent scope of their authority (section 196 ECCTA). The guidance emphasises that this route to establishing corporate liability means that for the offences specified within schedule 12 of ECCTA, prosecutors no longer need to show that the individual was the “directing mind and will” of the company, which is the higher threshold under the common law identification doctrine.

Another priority area for the government is sanctions implementation and enforcement. On 24 February 2026, the government announced a new sanctions package under the Russia sanctions regime, the largest since Russia’s invasion of Ukraine in 2022. Additionally, the Office of Financial Sanctions Implementation (OFSI) is increasingly active, handling more cases than it has in previous years and has been adopting a strict enforcement approach. For example, in January 2026, OFSI issued a monetary penalty of £160,000 against Bank of Scotland PLC for making funds available to a designated person, when the bank’s automated screening system did not identify the customer as a designated person (it failed to recognise a variation on the spelling of their name, a common occurrence when transliterating Russian names into English). It is clear that OFSI will not accept such errors as an excuse for non-compliance.

While all business sectors are facing heightened scrutiny, there is a particular focus on the following:

• Professional services such as accountancy and law: the Anti-Corruption Strategy 2025, published on 8 December 2025, noted the government’s intention to deter “professional enablers” through the sanctions regime. Furthermore, the Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) supervisory regime will be reformed, with the government announcing in October 2025 that the Financial Conduct Authority (FCA) will be taking over as the single supervisor for professional services firms from the existing 22 private sector professional body supervisors.
• Sports organisations, in particular English football clubs and agents: the National Risk Assessment of Money Laundering and Terrorist Financing, published in July 2025, identifies football clubs and agents as having cross-cutting risks for sectors within the scope of the Money Laundering Regulations.
• Cryptocurrency or cryptoassets: OFSI recently announced it had joined the Crypto Cash Fusion Cell, a pilot multi-agency initiative to improve the identification and response to crypto abuse. Additionally, in November 2025, the SFO announced its first major cryptocurrency investigation into the collapse of a US$28 million scheme called Basis Markets, in relation to suspected fraud and money laundering.

Search and seizure issues in regulatory, civil or criminal cases

Although agencies may derive their search and seizure powers from different statutes, they are generally subject to similar underlying principles that serve to protect the subject of a warrant.

The police commonly use search and seizure powers under the Police and Criminal Evidence Act 1984 (PACE), which are subject to PACE Code B (the Code of Practice governing police search and seizure). There are various “safeguards” in place under section 15 of PACE, including requirements in relation to both warrants and warrant applications. Additionally, section 16 of PACE sets out further requirements in respect of the execution of warrants. A warrant must specify certain details, including the name of the person who applied for it, the date it is issued, the premises be searched and (to the extent practicable) the articles or persons sought. Courts have quashed warrants that were overly broad in scope, or that were served in an incomplete form.

Warrants applied for by the FCA under section 176 of the Financial Services and Markets Act 2000 (FSMA) must also comply with certain requirements under sections 15 and 16 of PACE. However, not all search warrant regimes import the protections provided by sections 15 and 16 PACE. For example, the SFO can apply for search warrants under section 2(4) of the Criminal Justice Act 1987 (CJA), in relation to which the Law Commission has said it is unclear if sections 15 and 16 of PACE apply (and thus the Law Commission recommended inserting similar safeguards into the CJA). Generally, regulators are required to follow their own regimes, and where they have fewer search and seizure powers (or none at all), they tend to conduct their investigations in conjunction with the police. In these cases, the police searches would still be subject to the PACE requirements.

In civil cases, search and seizure orders are less common. They are a form of extraordinary interim injunction that can generally only be granted by High Court judges, usually in relation to civil fraud, intellectual property and breach of confidentiality cases. Such orders allow a party’s solicitors to enter the other party’s premises and search for, copy and seize documents or materials. However, unlike in criminal cases, search orders are intended to preserve, not obtain evidence, and they will typically only be issued where:

• there is a very strong prima facie case;
• serious harm would be suffered without the order;
• there is evidence of a real risk of evidence destruction; and
• the order is proportionate and as specific as possible.

Due process protections and enforcement

In the United Kingdom, due process protections for investigation subjects arise from a combination of statutory safeguards and common‑law principles. As a starting point, subjects must be informed of their status as a suspect and given sufficient clarity regarding the nature of the inquiry. Before adverse findings are made, subjects are afforded an opportunity to respond to allegations and evidence, consistent with common‑law natural justice principles.

In criminal proceedings, subjects are often invited to interview under caution under PACE. PACE, and its Codes of Practice, enshrine the procedural framework that govern the process that must be adhered to in order to preserve the protections of the subject. A central protection is the right against self‑incrimination, for voluntary and compelled interviews (the latter discussed below), reflected in the subject’s right to remain silent. However, this protection is tempered by the ability for adverse inferences to be drawn if a defendant, in exercising their right against self-incrimination, fails to mention facts on which they later rely in court. Subjects are also entitled to legal representation, though regulators may impose restrictions (eg, limiting who may attend compelled interviews) if demonstrably necessary to the investigation.

Investigation subjects can claim legal professional privilege (LPP). Both legal advice privilege and litigation privilege apply to communications within corporate investigations, including lawyers’ interview notes and investigative memoranda. Enforcement agencies accept that privilege “belongs to the client”, and courts enforce LPP strictly. Attempts to narrow its scope, such as in The Director of the SFO v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006, have been curtailed by appellate authority, reaffirming the importance of preserving LPP in corporate investigations, and thus encouraging early internal investigations and cooperation with authorities.

Enforcement varies by forum: criminal courts police procedural fairness robustly, whereas regulatory bodies operate within more flexible statutory schemes but remain subject to judicial review for unfairness or overreach. Overall, although there are well‑defined process protections in place for investigation subjects, there are often limitations and challenges that require careful and strategic navigation.

Standards for evidence handling and chain of custody rules

In criminal cases, rules in respect of evidence handling are stringent. Prosecuting agencies such as the SFO are careful to comply with the applicable rules, including procedures in respect of gathering evidence and maintaining chain of custody records. Both as a matter of due process and from a strategic perspective, defence practitioners will scrutinise every aspect of the prosecutor’s evidence gathering process. Any deficiencies identified, whether in collection, continuity, storage or documentation, may undermine the integrity or admissibility of the evidence, limiting the prosecutor’s ability to rely on it at trial.

In regulatory matters, such as with the FCA, there is a greater reliance on voluntary cooperation with investigations from regulated entities or individuals. As a result, material is often voluntarily produced to the regulator and so is unlikely to be questioned by the subject, making chain of custody disputes less likely.

In corporate criminal investigations, however, issues in respect of evidence handling have become significantly more complex. Investigations often involve vast volumes of digital material collected across multiple jurisdictions and processed through different forensic methodologies. Data may be extracted from devices multiple times, migrated across platforms or analysed using tools that apply inconsistent standards of review. For defence teams, it is essential to scrutinise the digital forensic process in detail and obtain clarity over potentially intricate chains of custody for all data relied upon by prosecuting authorities.

Witness interviews and protections for subjects

Interview practices vary by agency, but in much the same way as with protections for investigation subjects, witnesses enjoy strictly enforced protections when giving evidence to an investigation. The principal agencies that we work with share key procedural features that ensure witnesses protections are observed, while retaining distinct investigative tools.

SFO

The SFO frequently conducts interviews using its compulsory powers under section 2 of the CJA. A witness (either individual or corporate) served with a “section 2” notice must provide information, documents or attend interviews; failure to comply without reasonable excuse is a criminal offence. While compliance is mandatory, the witness is protected insofar as the information provided cannot be used in subsequent criminal proceedings against them, save for prosecution of false statements. Interviewees may have legal representation present at the interview, although the SFO can restrict specific representatives where they may obstruct the investigation or create conflicts. Interviews are audio‑recorded, and individuals must be clearly informed of their status as witnesses.

FCA

The FCA conducts both voluntary interviews and compelled interviews under sections 171 and 172 of FSMA. Compelled witnesses similarly benefit from use restrictions and must be given sufficient information to understand the purpose of the interview. The FCA also provides disclosure of relevant materials for interview preparation, subject to regulatory sensitivities. Witnesses are usually permitted legal representation, although again, specific attendees may be restricted for supervisory reasons.

Across all agencies, witnesses also benefit from LPP, which agencies accept cannot be overridden by compulsion. In practice, while compelled interviews remain powerful tools, the core procedural safeguards, particularly LPP and the right against self-incrimination, are well‑established and consistently observed.

Specific cases or broader case law developments to watch closely

Practitioners will be watching closely for any news of the first FTPF investigations and/or prosecutions, which would be a key development in the UK corporate enforcement landscape. Similarly, the first prosecutions using the “senior manager” identification doctrine to establish corporate liability will certainly be of interest.

Following the unexpected announcement from Nick Ephgrave, director of the SFO, that he would step down at the end of March 2026 just halfway through his tenure, all eyes are naturally on the SFO and its high-profile cases this year. Although the SFO’s Business Plan published last year stated it had five cases listed for trial in 2026, it has already suffered setbacks. In February 2026, it was announced that the fraud trial for the prosecution of four former employees connected to the collapse of Patisserie Valerie would be postponed until 2028, despite the court date having been listed for March 2026. By the time the case goes to trial, it will have been 10 years since the SFO’s investigation was announced. Also in February 2026, the SFO terminated its prosecution of two former London Mining employees due to issues with the SFO’s historic evidence review system. The trial had been scheduled for April 2026. At the time of writing, the SFO prosecution of two former employees of Petrofac for bribery offences has a trial listed for October 2026.

With the trend in increased sanctions enforcement activity, practitioners will be closely monitoring cases in this area, including OFSI decisions and monetary penalties as they are issued. Similarly, we will also be watching HM Revenue & Customs (HMRC), which has also ramped up its export controls work, overseeing 51 criminal investigations in 2024–2025 – a significant increase from the five investigations it undertook in 2021–2022.

How different enforcement agencies coordinate

Coordination between UK enforcement bodies in complex economic crime matters is variable and heavily dependent on the agencies involved. In high‑stakes corruption, sanctions and fraud investigations, the SFO, National Crime Agency (NCA), OFSI and HMRC generally cooperate closely, supported by statutory gateways that facilitate intelligence sharing. Joint‑investigation teams, often with the NCA as operational lead, are increasingly common in cross‑border bribery and money‑laundering cases.

By contrast, coordination can be more fragmented where mandates diverge. The FCA and SFO, for example, operate under separate statutory schemes and may run parallel regulatory, civil and criminal investigations into financial misconduct that do not always align in pace or scope. These structural differences can result in inconsistent messaging to corporates, overlapping information requests or different interpretations of cooperation expectations.

For subjects and their advisers, jurisdictional overlap presents both risks and opportunities. The most obvious challenge is managing exposure across multiple regimes with differing evidential thresholds, disclosure obligations and interview frameworks (eg, PACE interviews versus compelled interviews). However, divergence between agencies can also offer strategic advantages. Where jurisdiction between agencies is shared for particular financial misconduct, early voluntary engagement with one agency over the other could shape the narrative for the way in which the matter is ultimately enforced. Where one authority may take a more aggressive stance with enforcement resulting in only criminal penalties, engagement with another could steer the matter towards regulatory or civil resolution. Early legal analysis demonstrating that conduct is more appropriately addressed as regulatory rather than criminal, combined with credible remediation and cooperation, can steer the matter toward a forum with more proportionate outcomes.

Overall, although coordination is improving, structural and statutory differences between enforcement bodies mean that jurisdictional conflict remains a real and sometimes strategically significant feature of the landscape.

Documentation standards that local enforcement agencies follow

Documentation standards vary between criminal, regulatory and civil cases. For criminal cases, there is a need for the relevant enforcement agency (usually the CPS or SFO) to ensure that documents that are collected are handled properly and ultimately admissible should the case go to trial. There are also strict rules relating to disclosure under the Criminal Procedure and Investigations Act 1996, requiring the prosecutor to disclose material that may undermine the prosecution case or otherwise assist the defendant.

This has been an area of weakness, particularly for the SFO, which in the past few years has had a number of notable failures of disclosure, resulting in cases being overturned or acquittals of defendants. Most recently, the SFO has identified issues with its evidence review software, which has resulted in the agency concluding that there was no longer a realistic prospect of prosecution against three individuals charged in relation to an investigation into London Mining. This issue for the SFO has also meant that the agency is reviewing a further 20 cases for disclosure issues.

By comparison, in regulatory and civil proceedings, the documentation standards are not as stringent. For example, when considering issuing a regulatory decision, the FCA is required to disclose material that it relies upon, as well as material that, in its opinion, might undermine its decision to take action. The FCA is also able to consider proportionality in certain circumstances when considering whether to disclose documents.

Despite being less stringent, the FCA has faced similar issues to the SFO by failing in its disclosure obligations. In Seiler and others v FCA [2023] UKUT 00133, the Upper Tribunal found a number of disclosure failings and recommended that the FCA review its disclosure process. However, unlike for the SFO, such findings are unlikely to be fatal to a regulatory case brought by the FCA.

Settlement mechanisms available under each relevant regulator

The SFO can offer Deferred Prosecution Agreements (DPAs) to corporates (but not individuals) in relation to fraud, bribery and other economic crimes. These usually include a substantial penalty and requirements for remediation, with a period of three to five years in which the company must comply with the conditions of the DPA, or face prosecution. A DPA will be accompanied by a statement of facts, setting out details of the alleged wrongdoing, but does not require an admission of guilt by the corporate. The agreement must be approved by a judge, who will consider whether the DPA is in the interests of justice and whether the terms are fair, reasonable and proportionate. To obtain a DPA, a company will usually need to have self-reported to the SFO, and then provided full and ongoing cooperation during the SFO’s investigation. A DPA avoids the cost and publicity of going to trial and provides the company with some ability to negotiate the terms with the SFO, as well as potentially sizeable discounts on any penalty.

The FCA has an early settlement process, where following negotiation with the subject of its investigation, it issues a Final Notice that has been accepted by the relevant firm or individual. Once the FCA has taken a decision that it is going to issue a Notice, it will usually provide for a 28-day period in which it can negotiate with the subject of that Notice. Agreement can be reached in relation to three points: the factual position; the legal position; and the penalty. There are set discounts available, starting at 30% and decreasing, for any financial penalty or period of suspension or restriction, depending on how early in the process a settlement is reached and whether some or all of the above three points are agreed.

OFSI can issue civil monetary penalties for breaches of financial sanctions, as an alternative to criminal prosecution. As with the DPA process, to receive a civil penalty instead of being criminally prosecuted, the expectation is that a corporate will have self-reported the matter to OFSI and provided full cooperation during the investigation, with self-reporting and cooperation also providing up to 30% discount on any penalty. The subject of the investigation has the opportunity to make representations to OFSI about aggravating and mitigating factors, in advance of OFSI making a final determination of the penalty.

In February 2026, OFSI also introduced an “early account scheme” that seeks to expedite certain cases. This requires the subject of the investigation to provide a comprehensive factual account of the potential breaches, together with all relevant material and evidence, with the intention that this will negate the need for OFSI to conduct a full investigation. If a monetary penalty is subsequently issued, the early account scheme can provide a further 20% discount, in addition to the discount for self-reporting and cooperation.

Major enforcement actions in recent years

As already mentioned, disclosure issues have been a significant problem for the SFO in recent years, resulting in cases being overturned or defendants being acquitted. In particular, three convictions were overturned in relation to allegations of bribery associated with Unaoil, an oil and gas consulting company. In those cases, the Court of Appeal determined that serious disclosure failings by the SFO meant that the three defendants did not receive a fair trial, and their convictions were overturned. It is clear that disclosure will be a substantial issue for the SFO in all its investigations, and something that defendants increasingly have to probe.

In relation to the FCA, it has had issues defending its decisions in the Upper Tribunal (the court of first instance in the FCA’s regulatory process). In particular, in the past year, the Upper Tribunal has found in four separate cases that the FCA had decided on too high a penalty and reduced the amount payable in each case. Despite the FCA having a set, five-step process for determining penalties, there is a lack of transparency around how the FCA determines a starting point, and the recent cases have seen examples of the Tribunal determining the FCA’s starting point to be arbitrary and calculating an alternative, lower starting point.

This trend of the Upper Tribunal reducing fines shows that there may be a benefit to challenging FCA decisions in the Tribunal, to reduce the amount of a penalty. However, the potential for a reduced penalty will need to be weighed against the loss of early settlement discounts, which can be up to 30%.

Active enforcement officials or agencies and their approaches

Historically, the SFO has been one of the more active enforcers against corporates, but it is increasingly under pressure and has reduced the number of its ongoing cases in recent years. We have also seen a shift from investigations and prosecutions of large corporates, into a greater focus on small and medium enterprises, as well as individuals. As discussed above, Nick Ephgrave will be retiring early from his role as director of the SFO at the end of March 2026. Together with the loss of other key individuals and recent casework issues caused by internal processes, such as disclosure failings, this will raise questions about the future of the SFO and further depress the number of live investigations.

The FCA on the other hand, has in recent years taken on broader aspects of financial crime, with a focus on non-financial misconduct by those it regulates. In addition, the FCA has expanded its remit of entities that it regulates, bringing cryptoassets within its sphere. While this is a new and increasing area of regulation, we have already started to see enforcement actions by the FCA in this sector.

Similarly, OFSI has seen an increase in its investigations, which are starting to lead to an increase in the number of penalties it is issuing. This is perhaps unsurprising given the flurry of financial sanctions that were implemented following Russia’s invasion of Ukraine in February 2022 and throughout the period since then. While we have seen a small number of penalties issued so far, it is expected that further penalties for breaches of these sanctions will be announced in the coming months and years. Once new sanctions come into effect, it is not surprising that it takes a few years for enforcement actions to be taken, as sanctions are not retrospective and it can take some time for matters to be investigated.

Another regulator that we expect to see increasing enforcement activity from is OFSI’s sister agency, the Office of Trade Sanctions Implementation. It was created in late 2024 and, although it has only been operating for just over a year, we expect to see enforcement of the trade sanctions soon.

Unwritten rules or informal practices in enforcement cases

One aspect of enforcement cases that is quite nebulous but vitally important is that of cooperation, particularly for those corporates seeking the settlement of an investigation. As already explained, with most enforcement agencies there is potential for substantial reductions in penalties if cooperation has been provided to the investigation. However, what cooperation actually looks like is relatively undefined, although the SFO has published guidance on this topic. There are some key aspects which include providing access to data and assistance with engagement from relevant individuals, as well as avoiding doing anything that could impede the investigation.

A key strategic decision with cooperation is how to approach this from the outset, as once a level of cooperation is established it can be difficult to change course. In particular, if a client decides to offer full cooperation, the enforcement agency may ask for internal investigations to be paused pending their own investigation, which can delay remediation and employee disciplinary actions for a number of years.

A further important, but unwritten, aspect of enforcement when facing multi-defendant investigations is the relationship with other defendants and particularly between legal teams. Common interest privilege allows for co-defendants to engage in discussions and share information, with the protection of privilege. While it will obviously be important to protect the best interests of the client, there are certain synergies and helpful collaborations that can be used to mutual benefit. For example, there can be an element of “divide and conquer” when approaching certain aspects of an investigation and prosecution, such as disclosure failings that will be in all defendants’ interests to pursue. Additionally, there can be advantages to coordinated but separate approaches, to put pressure on the relevant enforcement agency from different angles.

Another growing area is the use of artificial intelligence (AI) in document review, to increase efficiency and target relevant documents. Document review platforms are already developing and improving their AI capabilities to allow law firms to use such systems with confidence and accuracy, and the efficiencies can be extensive, particularly in removing non-relevant documents. We expect enforcement agencies to increasingly move towards negotiating their own use of AI and expect discussions on the use of AI to become part of the engagement on any investigation.

Case anecdotes

We acted for a company in relation to an SFO investigation, where the level of cooperation to be provided to the investigation was a strategic decision. In this case, the client was keen to conduct its own internal investigation alongside the SFO’s investigation to substantiate the factual position and consider whether any remediation and disciplinary actions for its employees was necessary.

As a matter of good practice, and if misconduct was uncovered, the SFO was provided with a summary investigation plan at the outset, and it was agreed that a limited waiver of privilege would be provided over certain documents relating to the investigation, such as interview memoranda. In addition, we kept the SFO informed of the proposed interviewees, offering them the ability to request that certain individuals were not interviewed.

The strategic decisions for the company were how far to take this cooperation, what work product the company wanted to create and the extent to which this would then be shared with the SFO. This required a careful balancing of interests and a clear understanding from the board of the level of risk associated with investigating matters internally that were also being considered by an external enforcement agency.

This type of risk will not be something that all companies are comfortable with, and we have worked on another matter where the internal investigation was effectively put on hold (together with certain remuneration for the affected employees) for a number of years until after the external investigation was completed.

A key takeaway for us is that while a corporate will make strategic decisions that are specific to their own circumstances, early consideration about cooperation is crucial to manage risks and preserve the best possible outcome for the corporate facing enforcement of any kind.