Fraud and Criminal Damage

Fraud and Criminal Damage

Fraud is now governed by the Fraud Act 2006, which replaced the complex deception offences in the Theft Acts. Criminal damage is defined by the Criminal Damage Act 1971.

Fraud Act 2006

The Fraud Act 2006 created a single offence of fraud (s.1), which can be committed in three ways:

1. Fraud by False Representation (s.2)

The most common form. The defendant:

(a) Dishonestly makes a false representation

(b) Intending to make a gain or cause a loss (or expose another to a risk of loss)

"Representation" (s.2(3)) means any representation as to fact or law, including a representation as to a person's state of mind. It may be express or implied.

• A representation is false if it is untrue or misleading (s.2(2))
• It can be made to a machine (s.2(5)) — e.g. entering false details into a computer system, using someone else's credit card details online
• Implied representations — using a credit card impliedly represents that you are authorised to use it (R v Lambie [1982], decided under the old law but the principle applies)
• The representation must be made dishonestly (applying the Ivey v Genting Casinos [2017] test)
• The offence is committed when the false representation is made — there is no need for the victim to be deceived or for any actual gain or loss to occur. It is an inchoate-style offence focused on the defendant's conduct and intent

2. Fraud by Failing to Disclose Information (s.3)

The defendant:

(a) Dishonestly fails to disclose information

(b) Which they are under a legal duty to disclose

(c) Intending to make a gain or cause a loss

The legal duty may arise from statute, contract, custom, fiduciary relationship, or the relationship between the parties. Examples:

• An insurance applicant failing to disclose material facts (duty of utmost good faith — uberrimae fidei)
• A solicitor failing to disclose a conflict of interest
• A company director failing to disclose relevant information to shareholders

3. Fraud by Abuse of Position (s.4)

The defendant:

(a) Occupies a position in which they are expected to safeguard, or not to act against, the financial interests of another person

(b) Dishonestly abuses that position

(c) Intending to make a gain or cause a loss

The abuse may be an act or omission (s.4(2)). Examples:

• An employee diverting company funds to a personal account
• A carer using an elderly person's bank card for personal purchases
• A trustee using trust funds for their own benefit
• R v Valujevs [2014] — a care worker who used a vulnerable person's bank card

Gain and Loss (s.5)

• Gain and loss are limited to gain or loss in money or other property (real or personal, including things in action and other intangible property)
• Gain includes keeping what one has (not just acquiring more)
• Loss includes not getting what one might get (not just losing what one has)
• The gain or loss may be temporary or permanent

Maximum Sentence

Fraud under s.1 carries a maximum sentence of 10 years' imprisonment on indictment.

Other Fraud Act Offences

• s.6 — Possession of articles for use in fraud (e.g. card-cloning equipment, phishing software) — max 5 years
• s.7 — Making or supplying articles for use in fraud — max 10 years
• s.11 — Obtaining services dishonestly — where D obtains services by a dishonest act, intending not to pay (e.g. using a stolen Wi-Fi password, sneaking into a cinema)

Evaluation of the Fraud Act 2006

Advantages:

• Simpler than the old deception offences — one offence with three modes of commission
• No need to prove deception actually occurred — catches attempted fraud and fraud against machines
• Broader scope — covers modern fraud methods (e.g. phishing, identity theft, online fraud)
• Failure to disclose and abuse of position fill gaps that existed under the old law

Disadvantages:

• The offence is very wide — almost any dishonest conduct with intent to gain could be charged as fraud
• "Legal duty to disclose" (s.3) is not defined in the Act, creating uncertainty
• "Position of trust" (s.4) is broadly drafted — when is someone "expected" to safeguard another's interests?
• Heavy reliance on dishonesty as the key distinguishing element — is the Ivey test clear enough?
• Risk of over-criminalisation — the breadth of the offence gives prosecutors wide discretion

Criminal Damage — Criminal Damage Act 1971

Basic Offence (s.1(1))

"A person who without lawful excuse destroys or damages any property belonging to another intending to destroy or damage any such property or being reckless as to whether any such property would be destroyed or damaged shall be guilty of an offence."

Actus reus:

• Destroys or damages — interpreted broadly. In Roe v Kingerlee [1986], the court held that whether something is "damaged" is a matter of fact and degree. Mud smeared on a cell wall was damage because it cost money to clean. In Hardman v Chief Constable of Avon [1986], pavement chalk drawings that required cleaning were damage. Morphitis v Salmon [2005] — scratching a scaffolding bar was not damage as it did not impair its usefulness
• Property — tangible property (real or personal), excluding mushrooms, flowers, fruit, and foliage growing wild (s.10(1)). Note: unlike theft, land CAN be damaged
• Belonging to another — s.10(2): property belongs to anyone having custody or control, a proprietary right or interest, or a charge on it

Mens rea:

• Intention to destroy or damage property belonging to another, or
• Recklessness as to whether property belonging to another would be destroyed or damaged
• Recklessness is subjective (R v G [2003] — overruling MPC v Caldwell [1982])

Lawful Excuse (s.5)

Two statutory defences:

1. s.5(2)(a) — D believed the owner(s) would have consented to the damage (or would have consented had they known the circumstances). The belief must be honestly held but need not be reasonable — Jaggard v Dickinson [1981]: D was drunk and broke into what she believed was her friend's house (her friend had consented to her entering). Her drunken belief was a lawful excuse, even though intoxication does not normally provide a defence to a basic intent offence

• This does not apply to aggravated criminal damage (s.5(1))

2. s.5(2)(b) — D damaged the property in order to protect property they (or another) believed was in need of immediate protection, and the means adopted were reasonable in the circumstances as D believed them to be

• R v Hunt [1978] — D set fire to a bed in an old people's home to demonstrate that the fire alarm was not working. His purpose was not to protect property but to draw attention to the faulty alarm — he could not rely on s.5(2)(b)
• R v Hill and Hall [1989] — anti-nuclear protesters who cut a perimeter fence around a naval base could not rely on s.5(2)(b) — the danger to property was too remote
• Blake v DPP [1993] — a vicar who wrote a biblical quotation on a concrete pillar outside Parliament to protest the Gulf War could not rely on s.5(2)(b) — no property was in immediate need of protection

Aggravated Criminal Damage (s.1(2))

D destroys or damages property (whether belonging to themselves or another), intending to endanger life or being reckless as to whether life would be endangered by the damage.

• The danger to life must come from the damage, not from the act of damaging — R v Steer [1988]: D fired a rifle at a house. The House of Lords held that the danger to life came from the shooting (the act), not from the broken window (the damage). Not guilty under s.1(2).
• R v Wenton [2010] — arson creating smoke and structural danger: the danger to life arose from the damage (the fire), so s.1(2) was satisfied
• No need for life to actually be endangered — intention or recklessness suffices
• No lawful excuse defence applies to aggravated criminal damage

Maximum sentence: life imprisonment.

Arson (s.1(3))

Criminal damage committed by fire. Charged as arson. Maximum: life imprisonment (even for basic arson).

Key Exam Points

• For fraud, always identify which mode (s.2, s.3, or s.4) applies to the facts
• Remember that fraud is an inchoate-style offence — no need to prove actual gain, loss, or deception
• For criminal damage, apply the R v G subjective recklessness test
• Distinguish basic criminal damage (s.1(1)) from aggravated (s.1(2)) using Steer
• Evaluate whether the Fraud Act 2006 is too broad, giving prosecutors excessive discretion
• Discuss whether Jaggard v Dickinson on intoxicated belief is an anomaly in the law