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‘good practice and respect for the primacy of statute do in my judgment require that conduct falling within the terms of a specific statutory provision should be prosecuted under that provision unless there is a good reason for doing otherwise’.”—[ Official Report, House of Lords, 29 March 2006; Vol. 680, c. 779.]
In essence, what other hon. Members and I are asking for is that there should be clarity and certainty in the criminal law. The Solicitor-General and I are familiar with the expression “the certainty of indictment”, and that rubric should flow across into statute law, just as much as it does in the drafting of a criminal indictment. Although we are happy to give the Government that three-year extension while they consider the common law conspiracy offence, it is something that ought not just be let to run. Whether there is sunset clause or some other device, it is not something that the Government should allow just to roll off into the long grass.
What we are essentially talking about is dishonesty—a concept that is often easy to recognise and sometimes a lot more difficult to define. Definitions are important in all statutes, but particularly in criminal law statutes and certainly in the Bill. By and large, the definitions in the Bill are sufficiently clear and the sort of thing that a judge—I declare an interest as a Crown court recorder and as someone who practices as a barrister not at the criminal Bar but at the civil Bar—can easily explain to a jury at the end of a trial.
We must bear in mind the fact that some areas of definition will need to be teased out. My hon. Friend the Member for Beaconsfield ran through those relating to the expressions “loss” or “gain” in clauses 3 and 5. More importantly, that relating to the word “expected” in clause 4(1)(a) has far-reaching implications that require careful thought. Issues relating to duty flow from that. My hon. Friend and the Solicitor-General had a private debate earlier about fiduciary duty. Speaking as a defamation specialist, when one talks about qualified privilege, one often talks about the duty to pass on a defamatory allegation even though one might know that it is defamatory and might be damaging. That duty can be described as either legal, moral or social. Therefore the fiduciary duty about which my hon. Friend and the Solicitor-General were talking might not be the only sort of duty caught by an expression such as “expected”.
I therefore urge the Government to think carefully in Committee about what they mean, what they want the courts to mean, and what they think the police and prosecuting authorities ought to be doing when faced with a case that might fall under clause 4, entitled “Fraud by abuse of position”. As I said, there is a clear need for certainty in the criminal law, and as long as that is provided by the time the Bill leaves this House, either to go back to the other place or to get Royal Assent, none of us should complain.
I want to say one or two more things about clause 4, as that, in conjunction with the problems described in relation to clauses 6 and 7 on criminal intent, is where most of the difficulty with the Bill will lie. The hon.
Member for Meirionnydd Nant Conwy had great fun with his Liberty briefing on A, M and—
Mr. Llwyd: For the record, it was a Justice briefing.
Mr. Garnier: Well, that is J rather than L. They are different letters of the alphabet, and we are making progress. In short, there is a foreseeable potential problem with relationships that can be the subject of abuse, which could then lead to fraud. We must bear in mind the distinction between straightforward dishonest criminal behaviour, which this Bill is designed to catch, and sharp practice, immorality or bad manners, which might be utterly reprehensible as matters of social conduct but which might not fall within the definition of fraud intended by the Government in introducing the Bill. I urge Members who serve on the Committee to invite the Government to think carefully about that.
There have been seven contributors to the debate, the last of whom, my hon. Friend the Member for Broxbourne, not only clearly enjoyed speaking in the debate but was good enough to tell us that he enjoyed speaking in it, which is a matter of some congratulation. He said that fraud affects not just Members of Parliament or lawyers but our constituents. It is a real issue. As he correctly said, it is not just dealt with on the Enron scale but can affect people with very little by way of assets or money, for whom the consequences can be disproportionately hard. Those with small savings and little wealth can be hard hit by some very nasty people. Now is not the appropriate time to debate the philosophy of sentencing policy. I have some interesting views, at least to me, about the appropriate sentence for all sorts of crimes, but the Bill makes it clear, depending on the clause that one is looking at, that sentences will be 10 or five years. I am sure that Members who serve on the Committee will have ample opportunity to exercise their minds on that.
My hon. Friend makes the perfectly good point that there is a great deal of self-help that can prevent fraud. Those who throw their bank account details, cheque books or other sensitive information into a bin without shredding them have, to some extent, only themselves to blame, even though those who misuse the confidential information contained in those documents in a criminal way can have no excuse simply because they found it in the bin.
The hon. Member for Tamworth (Mr. Jenkins) kindly undertook a gentle canter through the explanatory notes to the Bill, which many of us had perhaps not had the chance to read before he read them out to us. That was a valiant service, and I am sure that those on the Treasury Bench have noted that he was able to provide it, for which I thank him very much. He made some other, independent points in relation to the international nature of fraud. Those need to be grasped, especially, as he correctly pointed out, as so much fraud is conducted over the internet. The internet knows no national boundaries, even though the jurisdiction of our criminal courts is to a large extent confined within the boundaries of England and Wales, which I am sure is a point that the Under-Secretary, the hon. Member for Gedling (Mr. Coaker), will want to take back to the Home Office with him, along with the explanatory notes.
The hon. Member for Somerton and Frome gave a cautious but none the less thoughtful welcome to the Bill. He made some points about the need for a coherent prosecuting and investigatory policy. He invited us to try to manufacture a system with one coherent prosecuting and investigative authority, but he did not go so far as saying that he wanted one amalgamated national police force—
Mr. Garnier: The hon. Gentleman says, “Certainly not”, from a sedentary position, in case anyone did not hear him. He also made sensible points about case management, and gave his support for the jury system. From my experience of summing up to juries, and of addressing juries as an advocate, they have a collective common sense, by and large, and are exceptionally good at discerning honesty and dishonesty. When considering cases of criminal fraud, one is essentially talking about dishonest behaviour. There is no better way of unravelling all the complicated inter-weavings of a scam and asking whether what was going on was a deliberate piece of dishonesty than to ask a group of 2 people to apply their collective common sense.
I will not detain the House now with a dissertation on fraudulent preference, on which the hon. Member for Somerton and Frome touched briefly, but there is a story to be told in that regard, as there is with regard to carousel fraud, which has lately hit the headlines. I am sure that the Government have both those matters fully in mind, and I am sure that he can raise them again in Committee.
One point on which the hon. Member for Somerton and Frome lighted, which others did not, and which is worth highlighting now, is that of evidence on self-incrimination in relation to clause 13. I will have to read clause 13 a few more times before I get my head around it completely, but as I understand it, the self-incrimination concerned relates to questions asked in civil proceedings, which might prevent a prosecutor from using the answers to those questions to mount a criminal prosecution. The Solicitor-General, or my hon. Friend the shadow Attorney-General, will no doubt take me into a cooler room and explain things to me gently.
I would be interested to hear from the Government, now or subsequently, either orally or in writing, how that clause impacts on what is loosely called the right to silence, or the denial of the right to silence. As the Solicitor-General will know, prosecutors are entitled in certain circumstances, under the Police and Criminal Evidence Act 1984, to comment on a refusal to answer questions or to explain a particular course of conduct, at the roadside, on arrest or later while being interviewed by the police—or, indeed, on a refusal to give evidence in a trial. I should like to know for my own purposes what impact clause 13 will have on that aspect of criminal procedure. As I have said, the Minister need not trouble himself to give me an answer this evening, but I should be grateful if a simple written answer could be prepared.
My hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) described himself, rather diffidently, as a non-practising barrister, as though he
had very little experience of the intricacies of criminal law. On the contrary, he is a highly experienced senior junior at the criminal bar. It is a pity that he has had to give that up for his parliamentary duties from the point of view of the courts in England and Wales, but it is a great benefit to the House. He too expressed support for the jury system. He too sensibly advised us that the Government should not just consider legislation on fraud, but consider ways of making things less complicated. He rightly said that the more complicated the system—he cited the tax credits system—the easier it would be for bad people to cheat. He too raised the issue of the maximum sentence in clause 11, which I think it is sensible to deal with in Committee.
The hon. Member for Rhondda (Chris Bryant) took a zoological canter through the Bill—if it is possible to take a zoological canter; perhaps not. He talked of phishing, Trojan horses and money mules. Essentially, his point was that fraud is an international crime which can be perpetrated by three separate people from three separate jurisdictions, and which can have an impact on a victim in this jurisdiction. It may well be that international co-operation of one kind or another outside the confines of the Bill is necessary to help reduce fraud. The hon. Gentleman was sceptical about the need to retain the common law conspiracy offence, although I think he properly recognised that it might be necessary to retain it in order to establish the most appropriate way of dealing with phishing, Trojan horses and money mules. No doubt the Government will consider that over the next three years.
The hon. Member for Meirionnydd Nant Conwy applied his legal experience to the Bill. He seemed less sure than Conservative Members about the need to abolish the common law conspiracy offence—not necessarily for the same reasons as the hon. Member for Rhondda—but I am happy to say that he was wholly with us on jury trial, on the need for tighter definitions, on the need for clarity in relation to mens rea or criminal intent in clauses 6 and 7, and on the wider and more general plea for clarity and certainty in the criminal law.
Let me say something about clauses 6 and 7. I understand the concern expressed by my hon. Friend the Member for Beaconsfield, and understand and support the simple solution that he proposed in relation to clause 7. I may be able to assist the Government in that regard, although no doubt my hon. Friend will explain his ideas better in Committee. Simply removing the word “or” from clause 7(1)(a) and substituting the word “and” would do away with all the problems that we may face.
The Government may ask what constitutes fraud within the confines of the Bill. Fraud is described in clauses 1, 2, 3 and 4. It requires criminal intent. The fraud referred to in clause 7(1)(a) is the fraud described in those earlier clauses. When we combine that with the word “knowing” in the same paragraph, we end up with criminal intent. My hon. Friend’s solution is so much neater, simpler and clearer. A stroke of a pen could remove one little word and insert another: end of problem.
There is a disjunction between the drafting of clause 7 and the drafting of clause 6, but as my hon. Friend said, what works in clause 7 ought to work in clause 6. If the Committee is to do itself any good—which
I am sure it will, given a relatively benign and much welcomed Bill—it should concentrate on those two clauses, while obviously dealing with the difficulties presented by the word “expected” and the relationships issue raised in clause 4.
That is quite enough from me. I told the Government Whip that I would speak until about 9.30 pm, because I knew that the House was keen to hear from me. I also wanted to ensure that my hon. Friend the Member for Tewkesbury (Mr. Robertson) was given the shortest possible time in which to explain the issues that affected his constituents. Joking apart, however, it is time for me to sit down and shut up—or possibly shut up and sit down.
6.46 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. Vernon Coaker): This is the first occasion on which I have spoken as a Minister in a Second Reading debate. As I am not a lawyer, I rise with a slight degree of apprehension, which is why I was grateful to the hon. and learned Member for Harborough (Mr. Garnier) for saying that I could write to him about clause 13.
I welcome the broad support that has been expressed for the Bill. I thank the hon. Member for Beaconsfield (Mr. Grieve), the hon. and learned Member for Harborough, the hon. Members for Somerton and Frome (Mr. Heath) and for Meirionnydd Nant Conwy (Mr. Llwyd), and others on both sides of the House for responding constructively, while committing themselves to scrutiny in Committee to produce the better Bill that is our common goal.
The hon. Member for Beaconsfield outlined three tests that he considered important. It was crucial, he said, to overcome complexity, to help prosecutors to prosecute those who committed the crime of fraud, and to adapt to the changing face of criminality—for example, in the context of new technology. I assure him that the Government agree with him about all those tests and aims. As for repeal of the common law offence of conspiracy to defraud, I repeat that, having listened to Lord Justice Rose and following various consultations, we decided not to repeal it but to review it after three years.
Let me point out to the hon. Member for Beaconsfield that the views expressed in the other place changed during debates on the Bill. The hon. Gentleman said that Lord Lloyd saw no case for retention of the common law conspiracy offence. That may have been his initial view, but on 14 March he said that after speaking to Lord Justice Rose he was “wobbling down in favour” of retaining the offence. Even Lord Lloyd, having listened to some of the arguments, decided to change his view. He wobbled, which is enough for me.
As has been said, non-jury trials will feature in another Bill and do not form part of this debate, but the points made today have been taken into account. As for clauses 6 and 7 and the mens rea issue, we believe that the requirement for an intention to use the articles in people’s possession will provide a safeguard against idiotic prosecutions. As my right hon. and
learned Friend the Solicitor-General made clear, those are not strict-liability offences. Case law has established that the phrase
“for use in the course of...any fraud”
means that the prosecution must prove at least a general intention of committing a fraud. Anyone who has no such intention has nothing to fear from these provisions. Whether they are conjurors or innocent members of the public, safeguards are provided by case law.
I thank my hon. Friend the Member for Tamworth (Mr. Jenkins) for what I thought was an important and worthwhile contribution to the debate. He made the point that the Bill is only part of the solution. That is absolutely right. He suggested the need, for example, for specialist fraud judges and perhaps for specialist fraud courts. Those are useful proposals and I assure him that we will put them into the fraud review, which will report shortly.
My hon. Friend raised a number of issues to do with receiving digital television and no doubt he can argue his points in Committee; I am sure that he looks forward to serving on that. He made the important point, which the hon. Member for Broxbourne (Mr. Walker) also made, that fraud is not a victimless crime.
My hon. Friend said that there is no definition of dishonesty. Although there is no definition of dishonesty, the established test results from the case of Ghosh. Although that is case law, it is approved by the House of Lords and it has been in use for almost 25 years.
The hon. Member for Somerton and Frome raised many of the issues that we will need to look at in more detail in Committee. With that assurance, I will not mention all the points that he made. For example, we can discuss in Committee the issue of nationality jurisdiction. We do not think that the same justification for extra-territorial jurisdiction exists as it does for corruption. The corruption of officials overseas is dealt with in several international conventions. That stems from concern about corruption in developing countries and its effect on their stability. In contrast, fraud is a huge issue across the world—domestically as much as internationally. Corruption is also far less common than fraud. The resource implications for “policing” UK nationals worldwide for fraud are therefore much larger. The cost would need to be carefully examined before any party committed itself to it. If a UK national commits a fraud in Hong Kong that has no effect in the UK and no part of the fraud was committed in the UK, do we want the SFO to pay to send a team to Hong Kong? A degree of caution is needed with respect to that matter, but, as I say, it is an issue that we can debate in Committee.
The hon. Member for Rugby and Kenilworth (Jeremy Wright) was right to draw attention to the need for an appropriate penalty for obtaining services dishonestly. In response to his question about the maximum sentence, I draw his attention to the fact that the existing offence of obtaining services by deception carries a maximum sentence of five years’ imprisonment. The Law Commission examined that issue and saw no reason why the maximum for the new offence should not be the same. The Government’s consultation likewise did not elicit any
demand for the creation of a higher maximum sentence. Therefore, the Government concluded on the basis of the Law Commission and the consultations that we undertook that the maximum sentence of five years was appropriate.
My hon. Friend the Member for Rhondda (Chris Bryant) reminded us, as always, of the importance of people. As others have made clear, it is important continually to make that point. Although some people find the issue of fraud dry and not very interesting, it impacts on thousands of people across the country. Therefore, today’s debate is particularly important.
My hon. Friend made an important point when he talked about the issue of training for the police. I assure him that the police, particularly the ACPO national fraud working group, are playing a full role in developing the policy in the Bill. They have publicly welcomed the Bill and look forward to its early enactment. The City of London police are using their experience to look at how they can train police forces throughout the country in ensuring that it is as effective as possible. Indeed—this will be of interest to the barristers here—the Crown Prosecution Service is also looking forward to issuing advice to prosecutors to ensure that it is as effective as possible.
Mr. Heath: As the Minister happens to be mentioning advice that will be given, I wonder whether the Solicitor-General could provide me and perhaps other members of the Committee with the guidance on the use of the conspiracy to defraud offence. It was mentioned in the debate in another place but so far we have not had sight of the draft guidelines.
Mr. Coaker: The Solicitor-General informs me that he is happy to do that in due course.
Chris Bryant: I referred to the issue of the suborning of a police officer. Everyone in the Chamber seemed to be nodding their heads. I recognise that the Minister may not be able to respond directly to that today but it is an issue that has been lying around for quite a while and I wonder whether he would like to make some reference to it.
Mr. Coaker: That is an interesting and important point but it is not one for the law on fraud.
The hon. Member for Meirionnydd Nant Conwy emphasised the need to ensure that the law is as simple as possible. The Bill will do that—it will help to simplify a range of deception offences. It will help juries and magistrates to deal with what, as he and I know, can be extremely complex matters.
On the issue of why “knowing or intending” is not included in clause 6, we should bear it in mind that we are building on existing offences and that the “going equipped” offence in the Theft Act 1968 applies not only to burglars but to those who have equipment to commit a fraud, which it describes as a cheat. The only problem with that Act is that it does not apply to fraudsters who operate from home. We already have nearly 40 years’ experience of the operation of that provision and we are not aware of any problems of innocent persons being troubled by it.
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