Fraud is essentially a form of attempted theft brought about by some manner or act of deception (or an omission). It can be best understood conceptually by looking at the history of the offence.
History of Fraud
Its origins are in the old common law offence of “cheating”, which involved fraudulently obtaining the property of another through any deceitful practice. The underlying idea is therefore one of tricking or lying to bring about some sort of gain.
The offence of cheating later developed into a number of new offences through a series of Acts of Parliament. These included: obtaining money or property by any false pretence; obtaining services by deception; and going equipped for cheating.
Fraud Today
In 2006, Parliament passed a new Fraud Act 2006 designed to comprehensively define and establish offences relating to fraud.
This Act created three main offences in relation to fraud, in addition to maintaining previous offences such as obtaining services dishonestly.
They are:
Fraud by false representation
Fraud by abuse of position
Fraud by failing to disclsose
Fraud requires that a person does, or fails to do, either something dishonest or something dishonestly, in order either to bring about a personal gain or to cause loss to another person.
What does dishonesty actually mean?
Dishonesty, for the purposes of fraud, is defined by a two stage process as follows:
First, the actual state of the defendant’s mind must be established: taking into account all the circumstances and knowledge available to him, what did the defendant actually and genuinely believe and know at the material time; and then
Would an ordinary, decent person in the same circumstances (with the subjective knowledge and/or belief of the defendant at the relevant time) have considered the conduct of the defendant in those circumstances to be honest or dishonest.
Additionally, the Act also contains offences generally related to fraud. These include possessing or controlling articles (i.e. objects or electronic equipment) which are to be used in fraud, and also making or supplying such articles for use in fraud.
Legal Practice
The three main offences of fraud are all triable either-way. This means that fraud cases can be heard either in the magistrates’ courts or the Crown Court. Where it will ultimately be heard will depend on the complexity, severity, and likely sentence of each case.
These offences of fraud carry a maximum sentence of 10 years’ imprisonment or a fine or both. Fraud proceedings may also be subject to confiscation proceedings, should the defendant be found guilty.
Finally, it is worth noting that the offence of fraud can be, and often is, charged as being part of a conspiracy under section 1 of the Criminal Law Act 1977. This allows for a wider scope in prosecution and can also lead to higher sentences due to the offence being committed as part of a group.
Additional Proceedings
A defendant convicted of fraud may be liable to confiscation proceedings if he has benefitted from his fraud (see our article on confiscation proceedings here). In brief, the Prosecution will attempt to recover any benefit that the defendant has accrued as a result of the fraud, if any. However, it is important to remember that a person can be guilty of fraud even if there is no actual benefit. The offence is complete regardless of whether or not the fraud is successful in causing loss or achieving gain.
Legal disclaimer: Articles are intended as an introduction to the topic and do not constitute legal advice. The information contained herein is accurate at the date of publication but please note that the law is ever changing and evolving. If you require advice in relation to any matter raised in this article please contact a member of the team.