Fraud law

Corporate fraud has many facets. Usually someone will have gained an advantage over someone else by dishonest means and there will be a perpetrator and a victim, although other parties can also be affected. For example, if the perpetrator is an employee acting in the course of his employment, then his or her employer will be drawn in as someone potentially responsible.

Working as a corporate fraud lawyer

When corporate fraud occurs it usually brings crisis along too. This often means that the stakes are very high and that an urgent response is required. However, resolving a situation where corporate fraud has arisen also requires calm, strategic thinking. The victim of corporate fraud may be concerned with both recovering their losses as soon as possible, and with isolating the problem and reassuring investors and counterparties. The victim's advisers will need to balance these objectives.

Typically the questions clients are faced with include:

• Establishing how the fraud was committed.
• Identifying who was responsible.
• Locating the whereabouts of any stolen money.
• Ascertaining and minimising the impact on the business and its reputation.
• Establishing who (such as investors and regulators) needs to know.
• Considering whether any third parties such as auditors can be held responsible.

Generally clients will be large multinational corporations or global financial institutions and frauds affecting them invariably involve cross-border transactions where some of the parties, or the substance of their dealings, are outside of the UK. This makes the investigation of such matters all the more challenging.

Logistically, documents (including electronically stored data) from different places will need to be assimilated and key individuals with potentially relevant knowledge interviewed. In a fraud scenario, such interviews cannot realistically take place over the telephone or by video conference so large teams of lawyers may be marshalled together to deal with different tasks simultaneously, possibly in different locations.

Legally speaking, the challenges are potentially even greater. If different elements of the fraud were carried out in different countries then a key issue is to determine which countries' systems of laws will actually govern issues such as whether liability can be established and what remedies are available to the victim. In addition, an employee who is interviewed in one country may have different local employment and data protection rights from an employee in another. Another decision to be made is where to bring any necessary legal proceedings, as the courts of some countries have vastly differing rules of procedure and evidence from those used in the English courts. This means that a range of legal skills from different jurisdictions are needed.

In some fraud cases, it is impossible to recover a client's losses from the person or people who are seen to be directly responsible and the victim will look for another target, such as an intermediary bank, from which to recover losses. These banks make for interesting clients because they are often wrongly accused of being involved in fraud – for example, if the perpetrator has used a bank account to deposit proceeds of fraud. Questions as to the bank's responsibility have to be answered and these can overlap with the money laundering laws that regulate financial institutions' dealings with clients' monies.

What skills do you need to do a solicitor's job in corporate fraud law? 

• The ability to digest large amounts of information.
• The ability to work in a team.
• Clarity of thought and strong communication skills.
• An eye for detail.
• A forensic approach to data analysis.

What is it like doing a trainee solicitor job in corporate fraud law? 

Trainees are important members of any corporate fraud team. They may be asked to undertake searches for relevant materials and, because of the nature of fraud-related work, they will help look for vital clues as to unsolved aspects of the fraud. This can be very rewarding. In addition, trainees typically undertake research and attend witness interviews, client meetings and court hearings where relevant. 

Types of law practised

• Banking.
• Criminal.
• Fraud and asset tracing.
• International.
• Regulatory.

About the author

SIMON BUSHELL is a litigation partner at HERBERT SMITH LLP. He graduated from the University of Birmingham with a degree in law.