Failure in sheet metal structures of ductile material is usually caused by one of, or a combination of, ductile fracture, shear fracture or localised instability. In this paper the failure of the high strength steel Docol 600DP and the ultra high strength steel Docol 1200M is explored. The constitutive model used in this study includes plastic anisotropy and mixed isotropic-kinematic hardening. For modelling of the ductile and shear fracture the models presented by Cockroft–Latham and Bressan–Williams have been used. The instability phenomenon is described by the constitutive law and the finite element (FE) models. For calibration of the failure models and validation of the results, an extensive experimental series has been conducted including shear tests, plane strain tests and Nakajima tests. The geometries of the Nakajima tests have been chosen so that the first quadrant of the forming limit diagram (FLD) were covered. The results are presented both in an FLD and using prediction of force–displacement response of the Nakajima test employing element erosion during the FE simulations. The classical approach for failure prediction is to compare the principal plastic strains obtained from FE simulations with experimental determined forming limit curves (FLCs). It is well known that the experimental FLC requires proportional strains to be useful. In this work failure criteria, both of the instability and fracture, are proposed which can be used also for non-proportional strain paths.