Fraud

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  • Created by: Nikki
  • Created on: 18-04-15 09:38

Pre-Fraud Act 2006

Replaced a series of deception offences --> offences that depended on deception being about certain consequences

2 main problems:

(1) Had to be 'by' deception --> dificult to show in some circumstances

(2) Need to prove 'deception' 

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Fraud Act 2006

Takes focus away from effect on V's mind

Does not require particular consequences to have ensued that are attributable to the fraud, such as the obtaining of property

Creates single offence that can be committed in three ways --> avoids problem of charging someone under wrong type of fraud, and then being unable to retry them under correct offence

Focus on D's wrongdoing

New offences overlap with considerable number of other offence of fraud scattered thorugh statute-book and at common law

Offences drafted in inchoate mode --> penalise fraudulent conduct, whether or not it succeeds in deceiving anyone and whether or not it leads to obtaining of any property

Two main difficulties of old law (proving deception and proving deception was cause of obtaining) are removed

Specific intent offence --> includes hypothetical losses and gains as well as actual losses and gains

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Fraud by false representation

Created by s1, and defined by s2 --> max penalty = 10 years imprisonment

D 'dishonestly makes a false representation, and intends, by making the representation, to make a gain for himself or another, or to cause loss to anoter or to expose another to the risk of loss'

Conduct --> FALSE

  • untrue or misleading
  • not necessary that whole representation is untrue
  • 'misleading' --> effect of what was said or done by D --> objective meaning 
  • if D has special knowledge of person to whom representation is addressed this could be relevant in determining whether representation is misleading

Conduct --> REPRESENTATION

  • no necessarily have to be received by another, let alone acted upon
  • if not communciated to intended recipient that does not negative actus reus of offence
  • s2(3) --> representations as to fact of law included, and representation 'as to state of mind of person making representation or any other person'
  • s2(4) representations can be express or implied --> words or conduct
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Fraud by false representation (2)

Fault --> KNOWLEDGE

  • only false (s2(2)(b)) if 'the person making it knows that it is, or might be, untrue or misleading'
  • extend to form of reckless knowledge

Fault --> DISHONEST

  • meaning of dishonesty in Ghosh
  • not limited in same way as in law of theft --> no equivalent of s2 TA --> cases of belief in legal right will be dealth w ith according to Ghosh test of ordinary standards of reasonable honest people
  • many cases likely to turn on view of D's dishonesty

Fault --> INTENTION TO CAUSE LOSS OR MAKE A GAIN

  • requirement of causation --> must be to cause gain or loss 'by making the representation' --> if false representatioin not intended to be a causal factor, element may not be satisfied
  • in most cases this element will not cause difficult
  • definition in s5 extends to temporary or permanent losses of money or property and cases where D intends only to expose to risk of loss
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Fraud by failing to disclose information

created by s1(2)(b) --> defined in s3

Dishonestly failing to disclose information that D has duty to disclose --> omission offence

Overlaps considerably with offence in s2

Fault --> DISHONESTY and INTENTION TO MAKE GAIN OR LOSS (causation requirement of 'by failure to disclose information')

Conduct --> FAILURE TO DISCLOSE and INFORMATION D HAS DUTY TO DISCLOSE

Duty to disclose --> intention of legislature that must be existing legal duty --> no scope for creating special duties under criminal law

Onus on prosecutor to spell out duty and its source

Whether duty exists = question of law

Whether D fulfilled duty, or failed to disclose that which was required = question for the jury 

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Fraud by abuse of position

Created by s1(2)(c) --> defined in s4

OCCUPATION OF POSITION --> not restricted to recognised fiduciary positions

EXPECTATION OF SAFEGUARDING

  • position 'in which [D] is expected to safeguard, or not to act against, the financial interests of another person'
  • whose expectation is relevant? --> can't be D's; to wide if V's --> courts may develop notion of 'reasonable expectation 
  • no fair warning of law's impact

PERPETRATION OF ABUSE

  • D 'dishonestly abuses that position' --> only active element of AR
  • act or omission
  • not clear whether abuse implied actus making of gain or loss, but may be interpreted more broadly as acting improperty or against finacnial interests of V, irrespective of outcome
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Fraud by abuse of position (2)

DISHONESTY --> particularly improtant due to uncertain boundaries of AR --> but if there has been an abuse of position there is likely to be at least a bit of dishonesty

INTENTION, BY ABUSE OF POSITION, TO CAUSE GAIN OR LOSS

Criticisms 

  • key terms 'crumble away into vagueness' when scrutinized
  • less like fraud offence than either of the others
  • central element --> dishonest abuse of position appears not to require any fraud or falsity at all --> brazen taking would seem to suffice
  • uncertainty of the conduct elements or occcupation of position and expectation of safeguarding fails to give fair warning of law's impact
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Assessment of the Fraud Act 2006

Criticisms

  • imposes on those making statements an undue risk of incurring criminal sanctions --> problem occurs because:dishonesty requirement is only protection D has against liability for statements made in conditions of uncertainty
    • liability may be incurred without undeserved benefit obtained or loss impaosed; and
    • D may be liable for making 'misleading' as well as false statements
  • uncertainty of certain parts mean there is not fair warning 
  • seeks to cover too much ground best left to detailed regulation of particular industries
  • departs from principle that there should be no liability for risk-taking without adverse conseq
  • combination of wide fault elements and absence of consequence element

Case for restricting fraud under 2006 Act to:

(1) cases in which information was known or believed to be false (not merely misleading), excluding cases in which there was merely recklessness as to falsity

(2) cases in which some gain or loss was made/imposed or was almost certain to be made/imposed

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Manifest and subjective criminality

Manifest criminality --> restricted to instances in which a neutral TP observer could recognise activity as criminal even if he had no special knowledge about offender's intentions

Subjective theory --> focused almost solely on D's intention to attack a protected interest --> only reason for requiring them to act is to ensure that intention is firm and not just fantasy

View that modern criminal law ahs drifted too far towards subjective thoery --> may lead to criminalisation of conduct that is judge to be dangerous, with no certainty that it is so --> disproportionate

Should we adopt manifest criminality to restrict law of theft? --> no --> ask what the distinction is tryign to achieve --> it is trying to restrict scope of law in principle way but does not achieve this

  • impartial observer test does not provide much rule of law certainty about obligations
  • impartial observer test doesn't permit criminal law adequate scope
    • too many actions that are ambiguous
    • may be hard to predict how impartial observer will view my conduct
    • may be many actions that, whilst they involve no observable wrongdoing, ought clearly to be criminal offences
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