7 - Fraud & Criminal Damage Flashcards
What are the key features of the offence of fraud under the Fraud Act 2006, and what was its purpose?
- The offence of fraud was created by the Fraud Act 2006 to replace multiple deception offences that were considered too complex and outdated.
- The Act was designed to ensure a broad range of behaviour falls within its scope, keeping up with advancing technology and increasingly inventive criminal methods.
- Fraud is classified as an either way offence, meaning it can be tried in either the Magistrates’ or Crown Court.
- If tried in the Crown Court, the maximum penalty is 10 years’ imprisonment, an unlimited fine, or both.
How does the Fraud Act 2006 define fraud, and what are the three ways it can be committed, and who does the burden of proof fall on?
The Fraud Act 2006 creates a general offence of fraud under section 1(1), but does not define the offence explicitly.
There is one offence of fraud, but there are three ways of comitting fraud.
Section 1(2) sets out the three methods by which fraud may be committed:
- By making a false representation (section 2);
- By failing to disclose information (section 3);
- By abuse of position (section 4).
There is no requirement for the prosecution to prove that the defendant obtained anything, only that they intended to do so.
Dishonesty is a key element of the mens rea for fraud.
What are the actus reus and mens rea elements of fraud by false representation under section 2 of the Fraud Act 2006?
Section 2(1) of the Fraud Act 2006 provides that a person commits fraud if they dishonestly make a false representation and intend to:
- Make a gain for themselves or another, or
- Cause loss to another or expose another to a risk of loss.
Actus Reus (AR):
- Making a false representation, which can be express (e.g., spoken or written) or implied (e.g., through conduct).
Mens Rea (MR):
- Knowledge that the representation is untrue or misleading, or might be so;
- Dishonesty, determined by the standards of ordinary, decent people (as per Ivey v Genting Casinos);
Intention either to:
- Make a gain for themselves or another; or
- Cause loss to another or expose them to a risk of loss.
What is required for a false representation under section 2(2) of the Fraud Act 2006?
A representation is false if:
- It is untrue or misleading; and
- The person making it knows that it is, or might be, untrue or misleading.
A representation can relate to:
- A fact;
- The law; or
- The state of mind of the person making the representation or any other person.
Representations can be:
- Express (e.g. in words); or
- Implied (e.g. by conduct).
How can a false representation be made, and what are some examples under the Fraud Act 2006?
Express False Representation: Example: A burglar tells a homeowner that he is a police officer investigating a crime to gain access to their home.
Implied False Representation: Example: Using a stolen credit card to purchase goods falsely implies that the user has the right to use it.
Representations can be made in various ways:
In writing, spoken, posted on a website, or through conduct. As a consequence, it is possible to commit the offence by making a false representation to a machine.
Section 2(5) provides that:
- A representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).
What is required to satisfy the mens rea for fraud by false representation under section 2 of the Fraud Act 2006?
To satisfy the mens rea, the prosecution must prove that the defendant:
- Knew that the representation was untrue or misleading, or might be so;
- Acted dishonestly, determined by the test set out in Ivey v Genting Casinos; having listened to the
evidence and established the defendant’s awareness of the facts, the court will determine
whether the accused’s conduct was honest or not by the (objective) standards of ordinary,
decent people.
Intended, by making the representation, to:
- Make a gain for themselves or another; or
- Cause loss to another or expose them to a risk of loss.
- The mens rea does not require an actual gain or loss just an intention to make a gain, cause a loss or expose someone to a risk of loss.
Dishonesty is a crucial element and, in cases where it is unclear, the jury may use common sense or apply the Ivey test to determine if the defendant acted dishonestly by ordinary standards.
What is meant by ‘gain’ and ‘loss’ under section 5 of the Fraud Act 2006, and how do they apply to fraud by false representation?
To be guilty of fraud, the defendant must intend by making the representation to make a
gain for themselves or another, or to cause loss to another or to expose another to a risk of loss.
The statute makes it clear that it is ‘by’ making the false representation that the defendant must
intend to make the gain or cause the loss, so there must be a link between the two. In other
words, the defendant must intend the gain or loss to be as a result of the representation.
‘Gain’ and ‘loss’ are defined in section 5 of the Fraud Act 2006 and apply to money or property, whether real or personal.
Gain:
- Keeping what one has; or
- Getting what one does not have.
- It may be temporary or permanent.
Loss:
- Parting with what one has; or
- Not getting what one might get.
The terms ‘gain’ and ‘loss’ are applied broadly in fraud cases, where the defendant must intend to either gain something or cause loss, whether that gain or loss is monetary or related to property.
What is the definition of fraud by failing to disclose information, and who does the burden of proof fall on?
Under s 1 of the FA 2006, a person is guilty of fraud under s 3 if they:
(a) Dishonestly fail to disclose to another person information which they are under a legal duty to disclose; and
(b) Intend, by failing to disclose the information, to make a gain for themselves or another, or
to cause loss to another or to expose another to a risk of loss.
As with other offences, the actus reus and mens rea elements must be proved by the
prosecution
What constitutes the actus reus of fraud by failing to disclose information under section 3 of the Fraud Act 2006?
The actus reus is failing to disclose information which the defendant is under a legal duty to disclose.
This legal duty may arise from:
- Statute (e.g., rules governing company prospectuses or welfare benefit claims);
- The express or implied terms of a contract;
- A transaction of utmost good faith (e.g., insurance contracts);
- Custom of a particular trade or market;
- Fiduciary relationships (e.g., agent and principal).
Not all information must be disclosed – it becomes a criminal offence only if the defendant has a legal duty to disclose the information.
What is the mens rea for fraud by failing to disclose information under section 3 of the Fraud Act 2006?
The mens rea consists of:
1. Dishonesty; and
2. Intention to
- Make a gain for themselves or another;
- Cause loss to another; or
- Expose another to a risk of loss.
These mirror two of the mens rea elements of the s 2 offence of making a false representation.
What is the definition of fraud by abuse of position?
There is a further means of committing fraud, which covers those defendants who are in some form of privileged position in relation to the victim. This is dealt with in s 4 of the FA 2006, which provides that a person is in breach of this section if they:
(a) Occupy a position in which they are expected to safeguard, or not to act against, the financial interests of another person;
(b) Dishonestly abuse that position; and
(c) Intend, by means of the abuse of that position to make a gain for themselves or another,
or to cause loss to another or to expose another to a risk of loss.
The offence of fraud by abuse of position is made up of two actus reus and two mens rea
elements
What is the actus reus for fraud by abuse of position under section 4 of the Fraud Act 2006?
The actus reus consists of two elements:
1. Occupying a position in which the defendant is expected to safeguard or not act against the financial interests of another person; and
2. Abusing that position, either by:
- A positive act; or
- An omission.
Example of positions that qualify:
- Trustee and beneficiary;
- Director and company;
- Professional person and client;
- Agent and principal;
- Employee and employer.
What does it mean to occupy a position of trust under section 4 of the Fraud Act 2006?
The defendant must occupy a position of trust in which they are expected to safeguard or not act against the financial interests of another.
Such positions may arise in formal or informal relationships, such as:
- Trustee and beneficiary;
- Professional person and client;
- Employee and employer;
- Family members or in the context of voluntary work.
The jury will decide on the facts whether the necessary relationship exists for D to have occupied a position in which they are expected to safeguard or not act against the financial interests of another person. However, before the jury decide this, the judge will consider whether the particular facts are capable of giving rise to D occupying a position and may give specific directions to the jury on this point.
Example: A software company employee who can access their employer’s databases might occupy a position of trust if they could use this access for personal gain. E.g., if they were to sell this data.
What is the mens rea required for fraud by abuse of position under section 4 of the Fraud Act 2006?
The mens rea consists of:
1. Dishonesty; and
2. Intention to:
- Make a gain for themselves or another;
- Cause loss to another; or
- Expose another to a risk of loss.
Example: In R v Rouse [2014], the defendant was a deputy manager of a care home with access to residents’ bank and credit card details.
He abused this position by withdrawing money for personal use, thus violating his duty to safeguard the residents’ financial interests.
Can the fraud offences overlap?
It is not unusual for a defendant to be criminally liable for different offences under the FA 2006
particularly as ss 2 to 4 describe three ways in which the offence of fraud may be satisfied.
