FRAUD BY FALSE REPRESENTATION – AN UPDATE

I have already written about the offence of fraud by false representation which is outlined in section 2 of the Fraud Act 2006 – see my previous blog post here. As this is such a commonly prosecuted offence under the Fraud Act, I thought I would explore in a bit more detail two key questions: what do the Prosecution have to prove to show that someone is guilty of fraud by false representation and what is the possible sentence if a Defendant is found guilty?

By way of a brief reminder of the legal definition of fraud by false representation. A person commits this offence if he or she:

• Dishonestly
• Makes a false representation, and
• Intends by making the representation to either
• Make a gain for themselves or another, or
• Cause a loss to another or expose another to a risk of loss

The prosecution must prove each of these 'elements' of the offence so that the jury are sure or 'beyond reasonable doubt', if they fail to do this then a defendant is entitled to a Not Guilty verdict. One of the most commonly used defences in fraud cases is that the defendant was not dishonest. I have had considerable success using such defences as the quesiton of dishonesty is often reliant almost entirely on the version of events put forward and the state of mind of the defendant. It is therefore wort looking at the legal test for dishonesty. 

An update on the legal test for dishonesty

So, what is the legal test for dishonesty? My previous blog post set out how the test for dishonesty is entirely objective since the Supreme Court ruling in the case of Ivey v Genting Casinos [2017] UKSC 67. This means that whether or not what the Defendant did was dishonest is not to be judged by whether the Defendant believed he had acted dishonestly, but rather, by applying the objective standards of “ordinary decent people.”

The legal test for dishonesty as set out by the Supreme Court in the Ivey case has been confirmed as correct by the Court of Appeal in Booth and another v R [2020] EWCA Crim 575. In that case, the defendant David Booth was accused of dishonestly exploiting his relationship with residents of the luxury care home he ran, in order to financially profit from them. He tried to argue that the guidance given by the Supreme Court on dishonesty should not be followed. The Court of Appeal disagreed with Mr Booth and confirmed that the correct approach to dishonesty is indeed that given by the Supreme Court in Ivey v Genting Casinos [2017] UKSC 67, which can be set out as follows:

(a) What was the defendant’s actual state of knowledge or belief as to the facts and
(b) Was his conduct dishonest by the standards of ordinary decent people

This means that the Prosecution no longer have to prove that the Defendant appreciated that what he or she had done was dishonest.

Can I go to prison for fraud by false representation?

The maximum sentence for fraud by false representation is 10 years’ imprisonment, and an unlimited fine, or both. This is for conviction on indictment, which means when the case has been heard in the Crown Court. If the case is heard in the Magistrates Court, a summary conviction may result in a maximum sentence of 6 months’ imprisonment and/or an unlimited fine.

Sentencing will take place according to the relevant Sentencing Guidelines for fraud, which can be found here and which takes into account a myriad factors to assess the Defendant’s culpability and the harm caused to the victim. In coming to an eventual sentence the court will also take into account aggravating and mitigating features, examples of which are found in the Guidelines, as well as the character of the defendant and the defendant’s plea. Assessing where a Defendant may fall within the Sentencing Guidelines and the effect of aggravating and mitigating features is a technical and skilled exercise. If you are concerned about where a case may fall within the guidelines and what the consequent sentence may be, you should seek specialist legal advice.

Although the Guidelines are indicative of what sentence may be given for fraud, negotiations can take place between the Prosecution and Defence as to where a case may fall within the guidelines. Also, submissions can be made to the Judge if the Prosecution and Defence disagree. I recently acted in a fraud case at Kingston Crown Court where the defendant was due to be sentenced. The Prosecution were asserting that the case fell within category 3A on the guidelines and that the appropriate sentence was 3 years on the guidelines as it fell within category 3A. Following my successful submissions to the Judge, the sentence was judged to be in category 3B and a suspended sentence of 15 months was handed down, which meant that the client avoided going to prison. Therefore, although the Guidelines are a good indication as to what a sentence may be, they are not the be all and end all of the sentencing process.

If you are accused of a Fraud offence you may wish to avail yourself of experienced representation who will fight for you every inch of the way. Quentin Hunt is a Criminal Barrister who has specialised in Fraud cases for over 24 years. Quentin accepts instructions both through solicitors and directly from members of the public. If you find yourself accused of fraud and wish to speak to Quentin about your case you may contact him for a no obligation conversation about how he may be able to assist in your case. Quentin does not accept instructions under the legal aid scheme.