Chapter 21: Fraud Flashcards
What is the Act that provides the offences for Fraud?
Fraud Act 2006
What are the 4 types of fraud?
- Section 2 - fraud by false misrepresentation
- Section 3 - fraud by failing to disclose information
- Section 4 - fraud by abuse of position
- Section 11 - obtaining services dishonestly
What is the overview for Section 2 - Fraud by flase representation?
- Specific intent crime (only focuses on intent)
- No statutory definition
- Maximum 10 years imprisonment
What are the 4 elements for Section 2
Actus reus
- Makes
- A false representation
Mens rea
- Dishonestly
- Intends to make a gain; or
Intends to cause loss to another or to expose another to a risk of loss
What is there to note about the ‘makes’ element?
- AR and MR have to coincide (present tense)
- Needs to be exactly at the time of the offence (however, doesn’t link to the MR)
What is the definition of a flase representation?
What section provides the definition and the list of flase representations available?
Definition - Section 2(2) (half truth)
A false representation is false if -
- It is untrue or misleading, and
- the person making it knows that it is, or might be, untrue or misleading
1) Section 2(3)
* “Representation” means any representation as to fact or law, including a representation as to the state of mind of -
1. the person making the representation, or
2. any other person.
2) Section 2(4)
* A representation may be expressed or implied
3) Section 2(5)
* Fraud can be committed by machine
What is there to note about Section 2 mens rea?
- Specifically for MR, it is an ulterior intent crime
- No need for actual loss/gain – just look at intent
What is there to note about the dishonesty element for Section 2?
- Must tell the examiner that there is no statutory definition for the word “dishonesty”
- Also mention that dishonesty definition cannot be borrowed from Section 2 Theft Act even though similar (as it talks about different offences)
- Thus, need to go for common law, which was given in the case of Ivey v Genting Casinos
1. Reasonable man (objective test)
What secion provides the definition for money and property for -
‘Intends to make a gain; or Intends to cause loss to another or to expose another to a risk of loss’?
Scope
* Provided by Section 5, a gain/loss in money or other property
* Can be temporary or permanent
Definition
* “Property” - real or personal (things in action or intangible property)
* “Gain” - keeping what one has and what one does not have
* “Loss” - includes loss that was parted with, and loss that was supposed to get but didn’t due to the representation
What is the overview for Section 3 - fraud by failing to disclose information?
Overview
- Ulterior intent (only need intent for liability)
- Conviction on indictment – 10 years imprisonment
What are the 3 elements for Section 3 - fraud by failing to disclose infromation?
Actus reus
- Fails to disclose to another person information which he is under a legal duty to disclose
Mens Rea
- Dishonestly
-
intends, by failing to disclose information to make a gain; or
to cause loss to another or to expose another to a risk of loss.
What is ‘Fails to disclose to another person information which he is under a legal duty to disclose’?
Does the Fraud Act 2006 provide the scope of “legal duty”? Where can it be found?
Introduction
- This is only a negative act
And only for those with a legal duty (if no duty then not liable)
Note
- There is no provision to disclose what is a “legal duty”
- Thus, can interpret from the Hansard – paragraph 7.28 & 7.29 of the HC Research Paper 6/31
5 duties from Hansard
1. Statute
2. Transactions that are considered as one of utmost good faith
3. Express or implied terms of the contract
4. Custom of a particular trade or market
5. Existence of fiduciary relationship
What is there to note about mens rea for Section 3?
- Also an ulterior intent for MR – only need the intent
- No need actual gain/loss
What is there to note about ‘dishonestly’ element for Section 3?
- Must tell the examiner that there is no statutory definition for the word “dishonesty”
- Also mention that dishonesty definition cannot be borrowed from Section 2 Theft Act even though similar (as it talks about different offences)
- Thus, need to go for common law, which was given in the case of Ivey v Genting Casinos
1. Reasonable man (objective test)
What is ‘intends, by failing to disclose information to make a gain; or to cause loss to another or to expose another to a risk of loss.’ for section 3?
What is there to note about this element?
Scope
- Provided by Section 5, a gain/loss in money or other property
- Can be temporary or permanent
Note
- includes loss that was parted with, and loss that was supposed to get but didn’t due to the representation
Same as Section 2
What is the overview for Section 4 - Fraud by use of position?
- Ulterior intent crime (no need actual loss)
- Conviction on indictment (crown court) – 10 years imprisonment
What is there to note about the whole of Section 4?
This provision is quite a mess, it is described as ‘woolly’ (vague) and a ‘catch all provision that will be a nightmare of judicial interpretation…. And help bring the law into disrepute.’ – Standing Committee B
What are the 4 elements for Section 4?
Actus reus
- Occupies a position in which he is expected to safeguard; or
- Not to act against, the financial interest of another person
Mens rea
- Dishonestly abuses that position; and
-
Intends, by means of the abuse of that position to make a gain for himself or another; or
to cause loss to another or to expose another to a risk of loss
Does Fraud Act 2006 provide definition for “position” for – occupies a position in which he is expected to safeguard?
If not, where can it be found?
Introduction
- There is no definition for the word “position”
- Thus, look at Hansard – paragraph 7.38 of the Law Commissions No. 276
Hansard
“The necessary relationship will be present between trustee and beneficiary, director and company, professional person and client, agent and principal, employee and employer, or between partners. It may arise otherwise, for example within a family, or in the context of voluntary work, or in any context where the parties are not at arm’s length.”
- Trustee & beneficiary (trust law)
- Director & company (company law)
- Professional person & client (every profession)
- Agent & principal
- Employee & employer, or between partners
- Family
- Voluntary work
- Parties are not at arm’s length
What is there to note about ‘Dishonestly abuses that position’ in Section 4?
- Must tell the examiner that there is no statutory definition for the word “dishonesty”
- Also mention that dishonesty definition cannot be borrowed from Section 2 Theft Act even though similar (as it talks about different offences)
- Thus, need to go for common law, which was given in the case of Ivey v Genting Casinos
1. Reasonable man (objective test)
Same with all dishonestly in Fraud Act 2009
What is there to note about ‘Intends, by means of the abuse of that position to make a gain for himself or another; or
to cause loss to another or to expose another to a risk of loss’ in Section 4?
Scope
- Provided by Section 5, a gain/loss in money or other property
- Can be temporary or permanent
Note
- No need to prove actual loss, as long as there is intention at the time of the action
- At the time of conduct
What is the overview for Section 11 - obtaining services dishonestly?
Triable either way offence
- Summary conviction – 12 months imprisonment or fine (or both)
- Indictable offence – 5 years imprisonment or fine (or both)
Crime
- Result crime
Burden of proof
- Prosecution to disproof beyond reasonable doubt (Woolmington v DPP by Viscount Sankey)
How does Section 11 apply?
Introduction
- Only applies where actually obtained something (others only need MR)
- Only applies for services
Note
- Keep in mind Section 3 Theft Act 1978 - making off without payment
- Theft Act can apply for services & goods
What are the 3 elements for Section 11?
Actus reus
- Obtains services for himself or another by dishonest act, and breach of subsection (2)
Mens rea
- Dishonest
- When he obtains them, he knows that they are being made available on the basis described in paragraph (a), or that they might be, but intends that payment will not be made, or will not be made in full
What are the 3 conditions that are provided under Section 11(2) for -
‘Obtains services for himself or another by dishonest act, and breach of subsection (2)’
Section 11(2)
a) Obtains services if they are made available on the basis that payment has been, is being or will be made for or in respect of them
* Services have anything to do with payment
b) obtains them without any payment having been made for or respect of them or without payment having been made in full,
* Payment not done at all
* Payment not made in full sum
c) when he obtains them, he knows that they are being made available on the basis described in paragraph (a), or that they might be, but intends that payment will not be made, or will not be made in full
What is there to note about the ‘dishonest’ element for Section 11?
- Must tell the examiner that there is no statutory definition for the word “dishonesty”
- Also mention that dishonesty definition cannot be borrowed from Section 2 Theft Act even though similar (as it talks about different offences)
- Thus, need to go for common law, which was given in the case of Ivey v Genting Casinos
1. Reasonable man (objective test)
