The Government has drafted a Fraud Bill which is before
Parliament and could be passed this autumn. It eliminates a number
of different fraud crimes and creates a new single offence of
fraud. According to Sean Elson, a senior associate at Pinsent
Masons, the law firm behind OUT-LAW, the changes will make
convictions more likely.
"[The changes] should enable the authorities to close a number
of legal loopholes that are currently open to abuse by fraudsters
as well as increasing the chances of bringing charges against an
individual and obtaining a successful conviction, especially in the
most complex cases," said Elson. "They will ensure greater clarity
and should be welcomed by the business community."
The law, if passed, will create a new offence of fraud, which it
will be possible to commit in one of three ways. Making a false
representation; failing to disclose information; and abuse of a
position will all qualify as fraud. Existing offences such as
theft, corruption, false accounting, forgery and counterfeiting
will continue to be offences.
In the Regulatory Impact Assessment (RIA) carried out into the
proposed law, the Home Office said that the aim of the law was to
address loopholes. "The main risk is that developing technology
enables fraudsters to exploit gaps in the current law, for example
on fraud relating to deceiving machines and the possession, in the
home, of personal financial data and computer programmes etc,
to carry out frauds," said a Home Office statement on its RIA.
"The risk of changing the law is that of unforeseen
consequences. In the light of reactions to the Consultation Paper,
we have reduced that risk to a minimal level by retaining the wide
common law offence of 'conspiracy to defraud' (contrary to the Law
Commission's original recommendation). This provides a 'safety net'
for any cases conceivably not caught by other charges," it
said.
The redefinition of fraud will help employers to prosecute
employees, particularly in incidents relating to computer and IT
assisted fraud, said Elson. "Technology is at the heart of most
cases of 'white collar crime' these days so a revamp of the fraud
laws is long overdue," he said.
The Fraud Bill will, by closing loopholes in the existing law,
increase the numbers of prosecutions, but does not provide a
guarantee that cases will be successful.
"Serious fraud investigations are complex and time consuming and
without additional resources for the investigating authorities such
as the Serious Fraud Office, HM Customs & Excise and the
police, individual cases will continue to be prioritised and a new
aggressive pursuit of fraudsters is highly unlikely," said Elson.
"The emphasis will naturally turn to the courts and the imposition
of stiffer penalties to act as the key deterrent."
As well as clearing up definitions of fraud, the Bill proposes a
reduction in the number of jury trials in favour of judge-only
trials and allowing for crimes relating to the intention to commit
fraud, rather than only on fraudulent outcomes.
