Embodiments herein provide a fault-handling scheme based on forward recovery for cooperative workflow environments. The fault handling scheme relies on the correct placement of transaction scopes and their associated fault and compensation handlers for maintaining correct application semantics, a fault propagation scheme for forwarding faults to a workflow component that has the corresponding fault handler, and a distributed mechanism for collecting data of completed workflow components to facilitate recovering from faults. The fault handling scheme makes use of control flow messages to facilitate compensation of nested transaction scopes (residing in different components). The workflow components are also modified with additional code for aiding with fault propagation and fault recovery.