Chapter 10 - Fraud

Fraud Act 2006, s1 - fraud

Nature of the offence

• A single offence of fraud

• Can be committed in three alternative ways:

  • s2: false representation

  • s3: failure to disclose information

  • s4: abuse of position

Key characteristics

• Conduct crime

• No requirement that:

  • the victim is deceived

  • any gain or loss actually occurs

• Focus is on:

  • dishonest conduct

  • intention to make a gain or cause/risk loss

Maximum sentence

• 10 years’ imprisonment on indictment

Exam importance

• Always identify which route (s2, s3, or s4) applies first

Fraud Act 2006, s2 — Fraud by False Representation

Actus Reus

1. Making a representation

   • Representation can be:

     • fact, law, or state of mind (s2(5))

     • express or implied

     • made to a person or a machine/system

   • The victim does not need to be aware of it

2. Representation must be false

   • “Untrue or misleading”

   • Can be misleading even if literally true

Mens Rea

1. Knowledge or foresight

   • D knows the representation is false or

   • foresees a risk it might be false

   • Subjective (negligence insufficient)

2. Dishonesty

   • Apply the Ivey test

   • D’s belief → judged by ordinary standards

3. Ulterior intention

   • Intention to:

     • make a gain, or

     • cause loss or risk of loss

   • Must relate to property

Key Cases

• Idrees v DPP

  • D arranged impersonation in a driving theory test

  • False representation made via an agent

• Barnard

  • Wearing student clothing implied student status

• DPP v Ray

  • Continuing implied representation by remaining seated after deciding not to pay

• Wiseman

  • Religious belief did not prevent foresight of falsity

• Gilbert

  • Jury must be directed that D intended the representation to cause the gain/loss

How to differentiate

• Use s2 for active lies or misleading conduct

• No duty to disclose required

Fraud Act 2006, s3 — Fraud by Failure to Disclose Information

Actus Reus

1. Failure to disclose information

2. Legal duty to disclose

   • Determined by the judge

   • Can arise from:

     • statute

     • contract

     • fiduciary relationship

     • utmost good faith contracts

   • Exists where non-disclosure makes a contract voidable

Mens Rea

1. Dishonesty

   • Ivey test

2. Ulterior intention

   • Intention to make a gain or cause/risk loss

Important distinction

• D does not need to know they were under a legal duty

• Dishonesty limits unfair liability

Key Case

• Mashta

  • D failed to disclose employment while receiving asylum support

  • Clear statutory duty → s3 liability

How to differentiate

• Use s3 only when a clear legal duty exists

• If duty is unclear → s2 usually preferred

Fraud Act 2006, s4 — Fraud by Abuse of Position

Actus Reus

1. D occupies a position of trust

   • Expected to safeguard another’s financial interests

2. D abuses that position

   • By act or omission

Position

• Not limited to fiduciary duties

• Assessed objectively

Mens Rea

1. Dishonesty

   • Ivey test

2. Ulterior intention

   • Intend gain or loss/risk of loss

Strict liability elements

• D need not know:

  • they occupied such a position

  • their conduct amounted to abuse

Key Cases

• Marshall

  • Care home manager misused resident’s funds

• Valujevs

  • Gangmasters responsible for distributing wages

• Pennock

  • Abuse must be clearly explained with civil law context

How to differentiate

• Use s4 where there is trust + exploitation

• Ask: Was D expected to protect V financially?

Fraud Act 2006, s11 — Obtaining Services Dishonestly

Actus Reus

1. D obtains services

2. Services are provided on expectation of payment

3. D does not pay (or intends not to pay)

Mens Rea

1. Dishonesty

2. Intention not to pay

Nature

• Conduct crime

• No need for permanent loss

Exam distinction

• Focus is on services, not property

Fraud Act 2006, s6 — Possession of Articles for Use in Fraud

Actus Reus

• Possession of an article

Mens Rea

• Knowledge the article is for use in fraud

Key point

• No fraud needs to have occurred

• Preparatory offence

Fraud Act 2006, s7 — Making or Supplying Articles for Use in Fraud

Actus Reus

• Making, adapting, supplying, or offering to supply an article

Mens Rea

• Knowledge or belief it will be used in fraud

Difference from s6

• s6 = possession

• s7 = production or supply

Conspiracy to Defraud (Common Law)

Actus Reus

• Agreement between two or more persons

Mens Rea

• Intention to dishonestly prejudice another’s proprietary rights

Key feature

• Can apply even where no statutory fraud offence fits

Theft Act (NI) Order 1978, Article 5 — Making Off Without Payment

Actus Reus

1. Goods supplied or service done

2. Payment expected on the spot

3. D makes off without paying

Mens Rea

1. Dishonesty

2. Intention to avoid payment permanently

How to differentiate

• Unlike fraud:

  • payment must be due

  • service must be completed