Three Cautionary Tales for UK Tech Companies

In tech, the law often arrives after something has gone wrong. Here are three cautionary tales* and the lessons every founder, CTO and in-house counsel should take away.

1.  The Fintech that missed the AML red flags

A fast-growing UK fintech relied too heavily on automation for onboarding and skipped enhanced due diligence on high-risk customers.

The FCA found fake IDs and money flows linked to laundering networks. Result? £1m+ fine and a PR nightmare.

Lessons:

• AML isn’t a one-time check – it’s ongoing.
• Automation needs human oversight.
• Train teams to spot anomalies software may miss.

2.  The SaaS provider that survived a data breach

A public-sector SaaS provider was hacked via an outdated plugin, exposing thousands of user records.

They survived because they had a breach plan, responded fast, and cooperated openly with the ICO.

Lessons:

• Preparation beats panic: simulate breaches, update systems.
• 72-hour ICO reporting rule is non-negotiable.
• Transparent communications reduce reputational harm.

3.  The software IP dispute that went to the high court

A startup and a freelance developer clashed over platform ownership. No written IP assignment = developer legally owned the code.

The business had to buy a licence for its own product.

Lessons:

• Get IP assignments in writing before work starts.
• Cover future modifications & derivatives.

Final word

These stories share a theme: it’s not just about knowing the law – it’s about not making dangerous assumptions.

If these scenarios feel uncomfortably familiar, now’s the time for a compliance health check… before your business becomes a case study.  If you would like to arrange a complementary consultation, please get in touch.

At Kingsley Napley, we help tech companies navigate the legal risks that matter most. When it matters most, make sure you’re prepared. 

*The examples given in this blog are fictitious but composed from broad patterns in real cases.

About the author

 Christopher Perrin is a highly experienced solicitor who leads the Corporate, Commercial and Finance team’s general Commercial & Technology Contracts, Outsourcing & Data legal advisory services.