Fraud law overhaul: Government consults

Out-Law News | 19 May 2004 | 12:00 am | 1 min. read

The Home Office has launched a consultation on proposals to completely revamp the fraud laws of England, Wales and Northern Ireland, arguing that the present system does not adequately tackle the wide range of possible fraudulent activity or keep pace with technology.

At present there is no one general fraud law in English law, but an untidy mess of eight specific statutory crimes (such as 'obtaining property by deception') and a vague common law offence of 'conspiracy to defraud'.

Scotland does have a common law crime of fraud, committed when someone achieves a practical result by a false pretence. Scotland also has a separate crime of 'uttering,' which is where some article – usually a document – is passed off as genuine towards the prejudice of another person.

As a result of the confusion in English law, Home Office Minister Baroness Scotland said: "The current laws do not cover the wide range of frauds which can be committed and it is too easy for defendants to escape justice because of legal loopholes".

"Modern criminals are also increasingly sophisticated and use technology to commit frauds. For example, buying services over the internet could be subject to fraud because of a deficiency in the current law," she added.

The Government is therefore proposing to create a general offence of fraud that could be committed in three ways: by false representation; by wrongfully failing to disclose information; and by abuse of position.

The proposals do not cover what might be described as specialist branches of fraud – forgery and counterfeiting, false accounting, tax evasion, insider dealing, misleading market practices, benefit fraud and intellectual property offences. These require separate consideration, says the Home Office.

The creation of a general offence, the Home Office hopes, will make the law simpler and more easily understandable for juries, defendants and the general public. The existence of a clear definition of fraud will also help to make the prosecution process more efficient and effective.

The proposals, which do not affect Scotland, are part of several Government anti-fraud initiatives announced recently, such as the introduction of a draft bill on identity cards that the Government claims will help tackle identity fraud.

Other initiatives include extra funding for the Serious Fraud Office and City of London Police to tackle fraud; supporting financial institutions and the retail industry with their introduction of the chip-and-PIN system for plastic cards; setting up the Assets Recovery Agency; and implementing the Proceeds of Crime Act 2002, which will increase powers to find and recover money from those who profit from fraud and other crimes.

Comments are invited from all interested parties by 9th August 2004.