Understanding The Fraud Act 2006: Scope, Deployment, and Effectiveness, Schemes and Mind Maps of Constitutional Law

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THE FRAUD ACT 2006

SCOPE, DEPLOYMENT &

EFFECTIVENESS

Andrew Langdon QC, Guildhall Chambers

(wide) scope of false representation

s2 Fraud by false representation

(1) A person is in breach of this section if he:

(a) dishonestly makes a false representation; and (b) intends, by making the representation:

(i) to make a gain for himself or another; or (ii) to cause loss to another or to expose another to a risk of loss.

(2) A representation is false if: (a) it is untrue or misleading; and (b) the person making it knows that it is, or might be, untrue or misleading.

Failure to disclose

s3 Fraud by failing to disclose information

A person is in breach of this section if he:

(a) dishonestly fails to disclose to another person

information which he is under a legal duty to

disclose; and

(b) intends, by failing to disclose the information:

(i) to make a gain for himself or another; or

(ii) to cause loss to another or to expose another

to a risk of loss.

Abuse of position

s4 Fraud by abuse of position

(1) A person is in breach of this section if he:

(a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person, (b) dishonestly abuses that position, and (c) intends, by means of the abuse of that position: (i) to make a gain for himself or another, or (ii) to cause loss to another or to expose another to a risk of loss.

(2) A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.

Intending not to pay (in full)....cont/d

(b) he obtains them without any payment having been made

for or in respect of them or without payment having been

made in full, and

(c) when he obtains them, he knows:

(i) that they are being made available on the basis

described in paragraph (a), or

(ii) that they might be,

but intends that payment will not be made, or will not be

made in full.

Deployment - the borderline between criminal

and civil liability (per CPS guidelines)

‘The borderline between criminal and civil liability

is likely to be an issue….’

‘Prosecutors should bear in mind that the

principle of caveat emptor applies and should

consider whether civil proceedings or the

regulatory regime that applies to advertising and

other commercial activities might be more

appropriate.’

Crossing the border

• How many ‘civil’ frauds are not plainly and demonstrably dishonest?
• Common experience is that the police lose interest if the conduct can be characterised as a (mere) civil dispute rather than a crime.
• How often is the real reason for no prosecution, a lack of resources / understanding / inclination? Factual simplicity is the key.
• What can legitimately be done to assist or encourage the police investigation?
• The Court’s duties and powers in relation to compensation to victims.

Effectiveness

In force from 15 January 2007 – 5 ½ years of it. See Ministry of Justice June 2012 Post–legislative assessment.

Sections 2-4 relatively easy to prove:

• No gain or loss need actually have been made
• No longer need to prove someone actually deceived

Section 1 popular with prosecutors – wide scope resulting in high proportion of guilty pleas.

Maximum sentence 10 years imprisonment Indictment (5 years re s11).

Section 11 also popular prosecutions– between 305 and 446 prosecution nationally every year.