Number of civil fraud cases jumps 50% in a year

The number of civil fraud cases heard in the courts of England and Wales increased 50% in a year, from just 61 cases in 2019 to 94 in 2020, shows an analysis by RPC, the international law firm and litigation analytics company, Solomonic.

RPC says these numbers are likely to have been driven up by the impact of Covid-19 on the economy, with further increases likely to follow in the coming years as the full impact of Covid-19 on the economy is felt. Traditionally, more frauds get discovered during periods of economic stress.

Civil proceedings are also favoured by Ultra High Net Worth individuals and family offices that fall victim to fraud as the best way of achieving financial recoveries.  Such proceedings may also act to lay down a public marker that the particular Ultra High Net Worth or family office takes fraud seriously and will pursue wrongdoers vigorously.

England and Wales is popular as a jurisdiction for launching civil fraud claims amongst international parties, particularly Russian and FSU nationals and corporates and increasingly, litigants from countries in Africa.

Andy McGregor, Head of Civil Fraud at RPC says: “The number of civil fraud cases has spiked dramatically in the past year, but this could just be the tip of the iceberg as the impact of the pandemic on the global economy will continue to drive the numbers upwards over the coming years.”

"The English High Court has long been recognised as the leading jurisdiction for proving fraud claims due to the quality of its judiciary and certain procedural advantages. There is no sign of that reputation waning over the coming years."

Dan Wyatt, Partner at RPC says: “Some family offices have fewer checks and balances on financial transactions than corporates. This means they can be more susceptible to fraud.” 

“History has proven recessions both unmask and serve as a catalyst for fraud. The Covid-related downturn is unlikely to be any different.”

“As support schemes wind down and the longer-term financial impact of covid becomes more apparent, it wouldn’t be a surprise to see a further rise in fraud claims being brought to the civil courts.”