1. Fraud – legal update
Peter Carter QC

2. Types of offences - fraud
Fraud by false representation
Fraud by failing to disclose information
Fraud by abuse of position
Conspiracy to defraud
Fraud on Revenue
Each requires proof of dishonesty on the part of the perpetrator

3. Dishonesty
Where the subjective state of mind of the accused is in issue in a case requiring proof of dishonesty, the jury has, since 1982, been directed not only to ask itself whether what a defendant did was dishonest, but whether he must have realised it was dishonest according to the standards of ordinary reasonable and honest people: R v Ghosh [1982] QB 1053.
In an important recent judgment, Ivey v Genting Casinos [2017] UKSC 67, the Supreme Court held that this is now wrong.

4. Dishonesty (2)
The test is now simply: “When dishonesty is in question, the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts…the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people.” [Paragraph 74.]

5. Dishonesty (3)
What does this mean for a person accused of fraud who works in a specialised sector?
Is (s)he allowed to point to the general practice of that sector?
Is it dishonest to operate a business which pays women less than men for similar but not equivalent jobs?
Is the jury to determine morality in each case?

6. Fraud by a company
Who is the company? – Tesco Supermarkets v Nattrass [1972] AC 153
The concept of identity and attribution – no aggregation of knowledge or acts – A-G’s Reference (No. 2 of 1999) (1993) 98 Cr.App.R.383
Cf Corporate Manslaughter and Corporate Homicide Act 2007

7. Fraud by a company – Attribution (2)
Management Asia Limited v. Securities Commission [1995] 2 AC paragraphs
Bank of India v Morris [2005] EWCA Civ paragraphs – "the primary rules of attribution, based on factors such as the scope of the agent's authority, may require to be modified either restrictively or liberally in order to accommodate the statutory purpose of the legislation which imposes the liability.“
Why does it matter?

8. Investigations into companies
When a company suspects that it, or one of its agents, has committed a criminal offence or regulatory breach, it will often order an internal investigation.
Can it keep the product of that investigation confidential?
Can it rely on the protection offered by Legal Professional Privilege?
The High Court in ENRC v SFO [2017] EWHC 1017 (QB) has cast some doubt on that.
Bilta v RBS [2017] EWHC 3535 (Ch) may address the problem

9. Modern Slavery Why relevant to fraud
Obligation to provide statement – s.54 Modern Slavery Act 2015.
Only applies to certain businesses – turnover of £36m pa “derived from the provision of goods and services falling within the ordinary activities of the commercial organisation or subsidiary undertaking” after deducting taxes and trade discounts.

10. Modern Slavery (2)
Obligation to submit an annual statement. If it is misleading, it could lead to prosecution for an offence under the Fraud Act. Which takes us back to the beginning.