Clause 1
Fraud Bill [Lords]
Mike O'Brien (Solicitor General, Law Officers' Department; North Warwickshire, Labour)
Mr. Amess, it is a pleasure to introduce clause one, which introduces the new general offence of fraud. It establishes the three ways in which the offence can be committed. These are fraud by false representation, failing to disclose information and abuse of position. The new offence will extend to England and Wales and Northern Ireland. It will have a maximum custodial sentence of 10 years. The new offence closely follows proposals set out in the 2002 Law Commission report on fraud, which concluded:
“The existing legislation was deficient in a number of respects.”
The over-particularisation of the deception offences in the Theft Act means that it is possible for some behaviour to fall outside the statutory offences. Therefore, defence lawyers can argue that it may have been some form of deception but it was not that precise form of deception. The prosecutors have charged the defendant with the wrong offence.
There is the risk that the offences are going to result in unjustified acquittals and costly appeals. The reliance on deception, as an essential ingredient of the crime, is problematic if it is not always clear that there is a victim who has been deceived. For example, a shopkeeper may have accepted a credit card for a payment not knowing, or being indifferent to, whether the cardholder has the authority to use the card, provided that the transaction results in the shopkeeper being paid, which it normally would.
The Law Commission concludes that the laws of fraud could be improved by the introduction of a general offence of fraud. A general law would improve the prosecution process, first by reducing the chances of offences being wrongly charged. Secondly it would, by virtue of its simplicity, be fairer to citizens who might face a trial and would better be able to understand the law. Thirdly, it would provide a greater flexibility to keep pace with the increasing use of technology in crimes of fraud.
The proposals for this offence were widely welcomed during the consultations undertaken by the Government and will improve the law of fraud by moving away from the existing patchwork of deception offences towards a clearer definition of fraud. The simplified and rationalised fraud offence will provide those working on the frontline with the necessary tools to be able to tackle fraud more effectively.