R v Stewart

JurisdictionEngland & Wales
CourtCourt of Appeal (Criminal Division)
JudgeTHE LORD CHIEF JUSTICE
Judgment Date09 March 1990
Judgment citation (vLex)[1987] EWCA Crim J0324-1
Docket NumberNos. 6292/A/86, 6847/G/86, 809/F/87, 563/E/87, 7764/A/86, 7846/F/86, 500/D/87, 1213/F/87 and 1217/F/87
Date09 March 1990

[1987] EWCA Crim J0324-1

IN THE COURT OF APPEAL

CRIMINAL DIVISION

Royal Courts of Justice

Before:

The Lord Chief Justice of England (Lord Lane)

Mr. Justice Farquharson

and

Mr. Justice Gatehouse

Nos. 6292/A/86, 6847/G/86, 809/F/87, 563/E/87, 7764/A/86, 7846/F/86, 500/D/87, 1213/F/87 and 1217/F/87

Regina
and
Livingstone Stewart
Regina
and
Zohreh Ebeling
Regina
and
Ronald Evans
Regina
and
David Alan Stanley
Regina
and
John Walker
Regina
and
Anthony Lee Kiddier
Regina
and
Mohammed Alibhai
Regina
and
Michael Joseph Dennehy
Regina
and
John Warren Pitchers

MR. D. CATTLE appeared on behalf of the Appellant Stewart.

MR. S. LESLIE appeared on behalf of the Appellant Ebeling.

MR. W. MORRIS appeared on behalf of the Appellant Evans.

MR. M. I. DAVIES appeared on behalf of the Appellant Stanley.

MR. P.K. SLOAN appeared on behalf of the Appellant Walker.

MISS N. STANGER appeared on behalf of the Applicant Kiddier.

MR. M. CONRY appeared on behalf of the Applicant Alibhai.

MR. S. WOOD appeared on behalf of the Applicant Dennehy.

MR. P.K. SLOAN appeared on behalf of the Applicant Pitchers.

THE LORD CHIEF JUSTICE
1

There are listed before the Court today a number of cases involving fraud committed on the public purse in the shape of defendants dishonestly obtaining benefits to which they were not entitled from various departments of State, including the Department of Health and Social Security, by means of telling lies. For the purpose of brevity we propose to describe the various types of benefit when dealing with there generally as welfare benefits and the Government Departments from which they emanate (Department of Health and Social Security and so on) as welfare departments.

2

It is an area of sentencing practice which is not without difficulties, so much so that we felt it might be helpful if we were to proffer some guidance to Courts for their consideration and adoption, if our views commend themselves.

3

Expenditure on welfare benefits is vast, as appears from the Enforcement of the Law Relating to Social Security Report of a NACRO Working Party (if I may use the acronym), page 7, paragraph 2.1. In 1985/86 the total amount of such benefits paid in the United Kingdom under the various social security provisions amounted to £39.1 billion, which was of all public expenditure and 10% of gross domestic product. A significant number of these are payments where the risk of fraud is slight (e.g. retirement pensions, child benefit, sickness and invalidity benefits etc.). Supplementary benefit and unemployment benefit are the most vulnerable points.

4

The number of cases of fraud reaching the Courts is dependent very largely on the policy of the welfare department concerned at any particular time. The department have, and properly have, a wide discretion as to which cases should be dealt with by way of warning and/or deduction from future benefits of the amount fraudulently obtained, although conviction is not regarded as automatically expunging the debt.

5

We may add that so far as the cases in today's list are concerned, none of those files are closed so far as the appellants or applicants are concerned. Each of them may be pursued in the future for the amounts by which they have been overpaid.

6

Policy with regard to prosecuting has undergone a marked change during the 1980s. Social security cases, for example, prosecuted in 1980/81 totalled 30,116. In 1983/84 the corresponding figure was 13,084. The sharp drop was due to a change of policy. Nowadays the policy is for cases involving small amounts not to be prosecuted, except where there are special features, such as repeated fraud or the necessity to provide a deterrent to a particular type of fraud prevalent in a particular locality.

7

It follows that the most common method of enforcement is warning and recovery. Unlike the situation between fraudster and victim in other spheres, here the fraudster is in a very vulnerable position vis-a-vis his victim - the department. A warning as to the consequences of any future offending coupled with recovery of the sum overpaid may often be enough, so it seems, to prevent any re-offending by that individual.

8

If it is decided to prosecute, section 15 of the Theft Act 1968 is not by any means the most usual form of charge. By section 146(3)(c) of the Social Security Act 1975, as amended by the Social Security Act 1981, Schedule 1, paragraph 3, it is an offence punishable by a fine of not more than level 5 on the standard scale or to imprisonment for not more than three months, or both, if a person "for the purpose of obtaining any benefit or other payment under this Act, whether for himself or some other person, or for any other purpose connected with this Act —

  • (i)knowingly makes any false statement or false representation, or

  • (ii)produces or furnishes, or causes or knowingly allows to be produced or furnished, any document or information which he knows to be false in material particular". There are similar provisions in the Child Benefit Act and in the Supplementary Benefits and Family Income Supplements Acts.

9

Section 55 of the Social Security Act 1986 , which comes into force next month, and which replaces the above provisions, provides as follows:

  • "(1) If a person for the purpose of obtaining any benefit or other payment under any of the benefit Acts, whether for himself or some other person, or for any other purpose connected with any of those Acts - (a) makes a statement or representation which he knows to be false; or (b) produces or furnishes or knowingly causes or knowingly allows to be produced or furnished, any document or information which he knows to be false in a material particular, he shall be guilty of an offence.

  • "(2) A person guilty of an offence under subsection (1) above shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale, or to imprisonment for a term not exceeding three months, or to both."

10

We have ventured to go into these matters at some length to show that it is only a small proportion of offences of this nature which are dealt with in the Crown Court and to demonstrate that the deterrent effect of any Crown Court sentence is unlikely to be great. This is because any one minded to embark upon this sort of fraud, unless he has a large scale operation in mind, or the fraud is blatant, is unlikely to find himself in the Crown Court. If prosecuted at all, the run of the mill offence is almost certain to be before the Magistrates.

11

It is perhaps interesting to see the sentencing figures for Social Security Act offences in Magistrates' Courts in England and Wales in 1985. The total of those found guilty was 6,368, of whom 17 were committed for sentence. Of the remaining 6,351, 0.2% were absolutely discharged, 13% were conditionally discharged, 7% were made the subject of a probation order, 59% were fined, 10% were made the subject of community service orders, 6.5% were given fully suspended sentences of imprisonment, 2.5% were sentenced to unsuspended terms of imprisonment and the remainder were the subject of a variety of disposals.

12

Coming now to the Crown Court, unfortunately the statistics do not distinguish between welfare benefit frauds and other types of offence charged under section 15 of the Theft Act 1968. So it is not possible to give any figures as to the sort of numbers with which we are dealing. However it is clear from what we have already said that in order to qualify for prosecution at all, the offence must be something other than minor, and it seems to follow that it will only be the apparently more serious cases which will come before the Crown Court. These offences involve the dishonest abstraction of honest taxpayers' money, and are not to be treated lightly. They are easy to commit and difficult and expensive to track down. However it must be remembered that they are non-violent, non-sexual and non-frightening crimes.

13

In some cases immediate unsuspended imprisonment (or youth custody) is unavoidable. At the top of the range, requiring substantial sentences, perhaps of 2½ years' imprisonment and upwards, are the carefully organised frauds on a large scale in which considerable sums of money are obtained, often by means of frequent changes of name or address or of forged or stolen documents. Examples are Adams (1985) 7 Cr. App. R. (S) 411, to which we have been referred in the course of the appeals and applications today, and Dennehy which is a case in our list today.

14

These offenders are in effect professional fraudsmen, as is often apparent from their previous records. They have selected the welfare departments as an easy target for their depradations and have made a profitable business out of defrauding the public in this way. The length of the custodial sentence will depend in the first instance on the scope of the fraud. Of course, as in all fraud cases, there may be a variety of mitigating circumstances and in particular a proper discount for a plea of guilty should always be given. These cases bear little relation to the average offender in this area.

15

As to the remainder, who form the great majority of those appearing in the Crown Court, the sentence will depend on an almost infinite variety of factors, only some of which it is possible to forecast. It may well be advisable as a first precaution for the Court to enquire what steps the department proposes to take to recover their loss from the offender. Counsel for the Crown should be equipped to assist the Court on this aspect of the matter.

16

There are other aspects on which his help will often be required, as will emerge later.

17

Other considerations which may affect the decision of the Court are:

18

...

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