Advising fraud victims: Recovery

This helpsheet has been issued by ICAEW’s Fraud Advisory Helpline to help ICAEW practice members, to highlight to clients, some of the possible routes to redress when their client has been a victim of fraud.

Members may also wish to refer to the following related helpsheets and guidance:

• The ICAEW Fraud Advisory Helpline

A member in practice has received a call from a client informing them that they have just sacked their Finance Director for perpetrating payroll fraud. They are understandably upset and want to know what possible recourse they might have with regard to taking action against the individual. Whilst the member has no specific legal training in this area they want to be able to signpost the client to possible sources of guidance.

Under UK law an action could be criminal or civil, or both.

Criminal law focusses on punishing the guilty party and the process is generally led by a prosecuting authority, possibly following a report to, for example, the Police or Action Fraud. For this reason criminal proceedings are not discussed further in this helpsheet, other than to highlight that a civil action can be launched in addition to a criminal proceeding (see the Fraud Advisory Panel helpsheet on Parallel Proceedings). Furthermore, it is possible for a private prosecution for fraud to take place. Please also refer to Fraud Advisory Panel guidance on this topic. Legal advice is recommended.

Civil law focusses on redress in the form of compensation and any action will be under the control of the claimant (the standard of proof being ‘on the balance of probabilities).

If the claim is for less than £10,000 (small claims track) then it will likely be heard by the County Court and will generally involve no costs beyond court fees and expenses.

If the claim is for between £10,000 and £25,000 (fast track) it will also likely be heard by the County Court and costs can generally be expected to be under £2,000 on top of court fees and expenses.

If the claim is for more than £25,000 or complex (multi track) then there are no standard procedures or fixed costs. If a claim is worth more than £100,000 it is likely to be heard by the High Court.

It might be useful to manage the clients’ expectations as evidence about the claim and assets will be required. A civil claim against a person with no financial means or an insolvent are unlikely to be worth the associated costs.

Civil claims must normally be brought within 6 years of discovering the fraud.

For further guidance on Civil Fraud and Asset Recovery, as well as other tools for redress, please see the Fraud Advisory Panel helpsheet.

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Fraud Advisory Helpline anonymously on +44 (0)1908 248 250.