The years leading up to 2023 saw a noticeable decline in enforcement proceedings from regulators compared to previous periods. Economic factors likely contributed to this shift; however, renewed funding commitments and an invigorated regulatory appetite suggest this trend may be reversing. Phillippa Ellis and Ronan Clark explore the evolving landscape below.
Fraud
Statistics from the Office for National Statistics reveal that fraud accounted for over 40% of all reported crime in the first half of 2024. The government’s promise to make tackling fraud a priority appears to be taking effect.
At the Serious Fraud Office, there has been a marked increase in enforcement action since Nick Ephgrave took over as Director. This has taken the form of the increased number of search and arrest operations, the recent securing of the SFOs first Unexplained Wealth Order, and more fraud charges being brought, including the charging of five men following the collapse of the law firm Axiom Ince and alleged improper use of over £60 million of client in December 2024.
In the 2023 / 2024 financial year, the FCA increased its intervention in firms, while its enforcement action decreased. Still, conversely the number of criminal prosecutions increased during the same period with 21 people charged with financial crime offences. The FCA has shown that it means business by taking action in high profile cases. In August 2024, the FCA imposed a £15 million fine on PwC for failing to report its belief that London Capital & Finance PLC may have been involved in fraudulent activity. In the summer of 2024, charges were brought against nine individuals including so-called ‘finfluencers’ in relation to an unauthorised foreign exchange trading scheme promoted on social media.
Regulators themselves have not escaped scrutiny. The Solicitors Regulation Authority (SRA) faced action by the Legal Services Board under the Legal Services Act 2007 for failing to meet its objectives during the Axiom Ince collapse. The firm’s closure left around £60 million in client funds unaccounted for and resulted in approximately 1,400 job losses, with the SRA criticised for inadequate and ineffective oversight.
In response, the SRA has launched investigations into at least 50 volume litigation firms, focusing on improper practices such as cold-calling clients without consent, failure to act promptly, and unjustified termination of retainers.
In September 2024, Chancellor Rachel Reeves promised to recruit 5,000 additional compliance officers for HMRC to tackle tax avoidance and evasion and we expect to see a similar increase in enforcement action being taken here.
Environment
In 20203, the Environment Agency’s budget had been reduced by 43% compared to 2011–2012, with inflation effectively halving its capacity for environmental protection. This financial constraint contributed to an 84% decline in enforcement actions from 2012 to 2021, with only 41% resulting in monetary penalties.
Despite this, the Environment Agency launched a consultation, which closed on 20 January 2025, to consider implementing a waste levy. This levy aims to increase waste enforcement activity by approximately 30%. Currently, the Environment Agency employs around 2,711 staff for compliance activities, with an additional 294 dedicated to enforcement roles. Similarly, other regulators, such as Natural England, expanded their enforcement and compliance teams, increasing staff numbers from 12 to 49 between 2021 and 2022.
Employment and Business Immigration
In July 2024, the Home Secretary announced its crackdown on employers’ illegal hiring of migrants with no right to work and has promised further spending of £150m to tackle organised immigration crime. Over 10,000 people have been deported since July, and in November alone, 154 people were arrested on suspicion of illegal working and civil penalties worth £4m were issued to 50 businesses.
Our Employment and Immigration team has explored the implications of these developments here Crackdown on illegal Employment: director disqualifications surge as insolvency service tightens controls – Capital Law.
