Understanding Fraud Laws in England, Wales, and Northern Ireland

HOW EFFECTIVE IS THE LEGAL SYSTEM IN DEALING WITH FRAUD IN THE UK?

Overview of Fraud Act, 2006

The crime of fraud differs crimes that are related to property which are generally prosecuted in the line of the criminal legislations, however, the crimes related to fraud generally entails civil dispute alongside of a criminal dispute. England, Wales and Northern Island is considered to have a comprehensive approach in dealing with matters concerning fraud which is codified under the Fraud Act, 2006 and has travelled quite far in terms of change from the Theft Act, 1968.Ideally, an act of fraud can be overviewed under offences like; A fraud that is committed by creating a false representation as under Section 2 of the Fraud Act, 2006 in order convey a message that has no truth to it and leads to believe the recipient of such a non-existing truth. Secondly, many frauds are committed wherein there is a failure in disclosing appropriate information as under Section 3 of the Act or latently abusing information and lastly, anyone securing a dominant position abuses as under Section 4 of the Act, 2006 , such influence on to others functioning from the lower levels and are directed by such superior authorities.

However, along with these principle offences , people who are participating in any act of fraud by either providing information, materials, suppressing materials or assist in suppressing materials or information or maybe obtain information or materials that engage in an act of fraud dishonestly misappropriating any such information or act may also be brought under this Act.Applying the subjective test and objective test as held in R v. Ghosh (1982), the standard and intention of such fraudulent behaviour shall be clear. In connection with fraud, the crime of tort of deceit is a close alternative or association with the crime of fraud and may be dealt as a criminal claim unlike normal claims of fraud like a case of unjust enrichment or conversion etc. Therefore, the test of dishonesty following the decision upheld in R v. Ghosh has seen a

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1. Crown Prosecution Service, “ Fraud Act , 2006” < https://www.cps.gov.uk/legal-guidance/fraud-act-2006#:~:text=a%20false%20representation-,dishonestly,another%20to%20risk%20of%20loss.> accessed on 16th April, 2021
2. Farrell, Yeo, N, Ladenburg, G. (2007) Blackstone’s Guide to the Fraud Act 2006. Oxford: Oxford University Press.
3. Ibid
4. Tunley, M., Whittacker, A., Gee, J. and Button, M. (2015) The Accredited Counter Fraud Specialist’s Handbook. Chichester: Wiley.

modification wherein a case is only dealt in objectively as held in Clowes v Eurotrust [2006] 1 WLR 1476. This test has been criticised since the reliance is higher on the concept of dishonesty.

Effectiveness of the Legislation

The Fraud Act, 2006 is a more comprehensive and broader legislation and allows one act of fraud that can be committed through three principal ways as covered under the act has made it relatively easier to broaden the fundamental structure of the Act. The ultimate aim is to cover the intent of the defendant’s action that may aim to achieve fraudulent gain or loss which have been covered under the Act as many new offences through implying dishonest means under Section 11 etc. The act of conspiracy is still under the radar despite being redundant and dismissed by the Law Commission but have been opposed by CPS, SFO, ACPO, FAP etc.

The court took a wider stance in the case of Kensington International Limited v Republic of Congo and others [2007] EWCA Civ 1128 where discussions followed whether corruption could be ascertained as a ‘related offence’. The court upheld that the act of offering bribe where there is an existing knowledge that such can be accepted should cover a fraudulent conduct.

Reflecting on the prosecutorial trends, the offences of fraud are easily calculated, identified, investigated and finally allows easy prosecution. There has been about 40% increase in such prosecutions of ‘volume frauds’ which is the repetition of fraud offences which is smaller in scale.

All technology driven crimes are better suited to be prosecuted under this Act like frauds in relation to credit cards, PIN, phishing etc. It has allowed ay for the intellectual property industry to bring charges under the Act without taking the traditional route. It has been revealed by the CPS that cases are easily disposed of, over all bringing about a speedier system, easier disposal and saves resources considerably.

5. Peters & Peters, Mondaq,2008 “UK: The Fraud Act 2006: Has It Had Any Impact? < https://www.mondaq.com/uk/white-collar-crime-anti-corruption-fraud/69800/the-fraud-act-2006-has-it-had-any-impact > accessed on 16th April, 2021
6. Supra 5

The terms of the new Act seem to be broader and vaguer if looked into closely. Firstly, the term ‘Fraud’ in itself has no proper and adequate definition and could leave several rooms for interpretation, ultimately having no uniformity in its application. Another criticism may lie with the drafting of Section 2 of the Act that can be applied on trivial instances criminalizing only intended acts that have no substantial gain out of it like in the case of R. v Moses and Ansbro [1991] Crim L.R. 617 or R. v. Rigby and Bailey, case of trader deception.

The quest of fraud again lies largely dependent on the quotient of ‘dishonesty’ even though there has been no secure acknowledgement over what honesty or dishonesty could legally entail. Thus, even though the Actus rea could be easily visible, a lot will depend on the judge and the jury as to how the Mens rea is calculated. The quest should rather be what was the ‘state of mind’ of the defendant and quite possibly a knowledge of misleading may not always be present but the act may hold such harmless act to be liable of dishonesty, therefore label it as a fraudulent activity if we look back at one of the statement made in 1703 in English courts where it has been acknowledged that merely making fool of another person should not allow the law to indict them Thus, the primary aim should be to bring about a reform in the fundamental understanding of terms and to what extent can these be applied to hold the defendant liable of fraudulent activities would be the ultimate question.

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7. Ministry of Justice,2012 “Post-legislative assessment of the Fraud Act 2006 Memorandum to the Justice Select Committee” < https://www.justice.gov.uk/downloads/publications/corporate-reports/MoJ/2012/post-legislative-assessment-fraud-act-2006.pdf > accessed on 16th April, 2021
8. Maureen Johnson & Kevin M Rogers , “The Fraud Act 2006: The E-Crime Prosecutor’s champion or the creator of a new inchoate offence?”, < https://uhra.herts.ac.uk/bitstream/handle/2299/10327/904863.pdf?sequence=1 > accessed on 16th April, 2021

BIBLIOGRAPHY

Internet Sources

Crown Prosecution Service, “ Fraud Act , 2006” < https://www.cps.gov.uk/legal-guidance/fraud-act-2006#:~:text=a%20false%20representation-,dishonestly,another%20to%20risk%20of%20loss.> accessed on 16th April, 2021

Peters & Peters, Mondaq,2008 “UK: The Fraud Act 2006: Has It Had Any Impact? < https://www.mondaq.com/uk/white-collar-crime-anti-corruption-fraud/69800/the-fraud-act-2006-has-it-had-any-impact > accessed on 16th April, 2021

Ministry of Justice,2012 “Post-legislative assessment of the Fraud Act 2006 Memorandum to the Justice Select Committee” < https://www.justice.gov.uk/downloads/publications/corporate-reports/MoJ/2012/post-legislative-assessment-fraud-act-2006.pdf > accessed on 16th April, 2021

Maureen Johnson & Kevin M Rogers , “The Fraud Act 2006: The E-Crime Prosecutor’s champion or the creator of a new inchoate offence?”, < https://uhra.herts.ac.uk/bitstream/handle/2299/10327/904863.pdf?sequence=1 > accessed on 16th April, 2021

Articles / Journal

Farrell, Yeo, N, Ladenburg, G. (2007) Blackstone’s Guide to the Fraud Act 2006. Oxford: Oxford University Press.

Tunley, M., Whittacker, A., Gee, J. and Button, M. (2015) The Accredited Counter Fraud Specialist’s Handbook. Chichester: Wiley.