Clause 3
Fraud Bill [Lords]
10:45 am
Mike O'Brien (Solicitor General, Law Officers' Department; North Warwickshire, Labour)
Clause 3 will make it an offence to commit fraud by failing to disclose information. The Law Commission’s initial consultation paper proposed that mere non-disclosure of information should not suffice for an offence of deception. However, during its consultations, a substantial minority of respondents argued that from the victim’s point of view, a failure to reveal material facts can be just as devastating and tantamount to deception by conduct.
The Law Commission, in revising its proposals and moving away from the overriding concept of deception, concluded that the ordinary concept of fraud is wide enough to embrace at least some dishonest non-disclosure. It noted that it is arguable though by no means clear that that is the effect of existing law, at least where there is a legal duty to disclose. In its final report, it therefore recommended creating such an offence, and the Government sought views on that in their 2004 consultation paper.
Reactions to the paper showed that a majority welcomed this second limb of the general offence. The only point of controversy was the issue of going beyond legal duties. A suggestion was made in consultation that failure to disclose information could amount in some cases to a false representation and that such cases were therefore already covered implicitly by the first limb. However, it was also recognised that it might be helpful, particularly for juries, if the point were made clear in law. The Government agreed with that view.
The Government also considered the argument that if the offence is restricted to situations where there is already a legal duty to provide information, it will add little to existing law, as failure to meet the legal obligation will carry its own sanctions. We do not agree. Even though the offence will be limited in that way, it will add to the law, as the existing sanctions for such failures might be of a civil nature, difficult to pursue and unlikely to lead to sufficient sanctions. The clause clearly sets out our position.
There will be difficulties relating to how failure to disclose information arises, and it must be for the prosecutors, the courts and in due course the jury to determine whether the person who failed to disclose the information did so with the intention to act dishonestly. Clause 3 clearly sets out the terms, and I hope that we will have general agreement on it as well.