Fraud—The Latest Law Commission Proposals

Published date01 April 2003
Date01 April 2003
DOI10.1177/002201830306700207
Subject MatterArticle
Fraud-
The
Latest
Law
Commission
Proposals
G. R.
Sullivan*
Abstract This article examines
the
latest Law Commission proposals for
replacing conspiracy to defraud with statutory offences. The Report pro-
poses a general offence of fraud which can be committed three ways:
(1) by false representation; (2) wrongfully failing to disclose; (3) abuse of
position.
The first form of
the
general offence constitutes a very useful reform
whereas aspects of the second
and
third ways of committing the general
offence are criticised for engendering uncertainty and for their potential to
criminalise otherwise valid civil law transactions.
Additionally
the
Report proposes abroad offence of obtaining services
by dishonesty; this is found to be a very useful proposal.
The Criminal Law Act 1977 established
the
offence of statutory
conspiracy-an
agreement
between
two or more persons which, if
implemented, would necessarily
amount
to
the
commission of
an
of-
fence. 1
It
was
the
intention of
the
Law Commission, whose proposals
formed
the
basis of statutory conspiracy that, in time,
the
only form of
conspiracy should be statutory conspiracy," Yet
the
Law Commission,
and
Parliament too, felt it premature, in 1977, to confine conspiracies to
statutory conspiracies.
It
was considered necessary to retain as a tempo-
rary measure three heads of common law
conspiracy-to
outrage public
decency; to corrupt public morality; to defraud.' Remarkably, in 2003,
these three heads of common law conspiracy are
with
us still.
Our
concern
here
is
with
conspiracy to defraud
and
what,
if
any,
substantive offences should supersede it. The longevity of conspiracy to
defraud is explained by its utility as a prosecutor's resource in counter-
acting
new
forms of fraudulent activity.
It
is an offence of startling
breadth; essentially any agreement which, if implemented, will cause
economic loss to
another
by dishonest means constitutes aconspiracy to
defraud." This 'useful elasticity' is
both
a blessing
and
a curse. Forms of
dishonesty give rise to conduct which
on
any
reasonable view should be
made criminal
but
which
none
the
less fall outside
any
substantive
offence." Frequently, two people or more will be involved in any com-
plex fraud, allowing recourse by prosecutors to conspiracy to defraud.
For a time,
the
House of Lords' decision in Rv
Ayres
6effectively stymied
Professor of Law, University of
Durham.
1Criminal Law Act 1977, s. 1.
2 Law Com. No. 76 (1976) para. 19.
3Criminal Law Act 1977, s. 5.
4
Scott
v
Metropolitan
Police
Commissioner
[1975) AC 819.
5 For
example,
the
facts of Rv
Preddy
[1996) AC 815 leading to
the
Theft
(Amendment)
Act 1996.
6[1984) AC 447.
139

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