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Lord Clinton-Davis: My Lords, my noble and learned friend has not yet mentioned the length of
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fraud trials, and I hope he will. Does anything in the Bill touch on this very important point, because jurors currently find the position insufferable?
Lord Goldsmith: My Lords, we touched on this issue in yesterday's debate on the Statement, to which my noble friend contributed. The Government intend to implement Section 43 of the Criminal Justice Act 2003, which deals with the mode of trial. I touched also on other methods of seeking to constrain the length of trials. We hope that this Bill will help too, as it simplifies the law. But my noble friend is absolutely right that the length of fraud trials is a very serious issue which we must tackle. While simplifying the law will help, the Bill will not, of itself, deal significantly with that problem. The complexity of the facts, not of the law, creates the length of trials to which my noble friend rightly refers.
Lord Ackner: My Lords, I wonder whether the noble and learned Lord could assist me. The Government's policy on the reform of criminal law on fraud is largely based on the Law Commission's report; I think he would agree with that. The commission says on page 2 of the report that the proposals,
"should make the law more comprehensible to juries, especially in serious fraud trials. The charges which are currently employed in such trials are numerous and none of them adequately describe or encapsulate the meaning of 'fraud'. The statutory offences are too specific to offer a general description of fraud; while the common law offence of conspiracy to defraud is so wide that it offers little guidance on the difference between fraudulent and lawful conduct. Thus, at present, juries are not given a straightforward definition of fraud. If they were, and if that were the key to the indictment, it should enable them to focus more closely on whether the facts of the case fit the crime as charged".
I take it that the noble and learned Lord agrees with those sentiments. Does not that provide, in addition to other matters raised yesterday, yet another example of the wisdom of a "wait and see" policy, rather than taking the robust measure he proposes and, without waiting to see how this works out in practice, allowing trial by judge alone in the cases to which he referred?
"anomaly represented by the continuing survival of conspiracy to defraud, under which it may be a crime for two people to agree to do something which, in the absence of an agreement, either of them could lawfully do".
Lord Goldsmith: My Lords, the answers to those questions are yes and no, and for the reasons I gave in opening this debate. Yes, it is important to simplify the law of fraud. No, it is not enough, for the reason I gave to my noble friend Lord Clinton-Davis. The facts and the evidence are complicated; the law is complicated, but that is not what causes trials to run into months and months. As to conspiracy to defraud, I have explained that as the majority of responses to the consultation were against removal of the offence of conspiracy to defraud, the Government took the view they did. I see that the noble Lord, Lord Kingsland,
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disagrees with me. I look forward to hearing what he has to say about it; he will put me right, as he always does.
I have referred to the other measures that we have taken, such as the multiple offender provisions in the Domestic Violence, Crime and Victims Act 2004. Additional resources have also been provided for the Serious Fraud Office and the City of London police to tackle fraud. The creation of the Serious Organised Crime Agency will introduce a new force in tackling and defeating serious and organised crime. That will include proposals to ensure effective incentives for criminals who give evidence against their associates. That will help in fraud cases.
As I announced yesterdayI have referred to it again todaythe Government plan to invite both Houses to bring into effect Section 43 of the Criminal Justice Act 2003, allowing prosecutors to apply for trials to be conducted without a jury in very long, complex, serious fraud trials.
The Government believe that these measures, along with the overall modernisation of the law, will help to streamline our capacity to tackle fraud and hence make an important contribution to tackling fraud and the crimes facilitated by it. I commend this Bill to the House.
Baroness Anelay of St Johns: My Lords, we support the principle behind the Bill. It will be useful in simplifying and thereby, one hopes, strengthening the law on fraud. We have always made that position clear throughout our debates on the Criminal Justice Act 2003 and subsequently.
Much can be done to improve the conviction rate of those who commit fraud, without removing the right of the citizen to jury trial in serious cases. The Attorney-General referred to the Statement that he made yesterday. We have already been reminded of that in some of the main points raised in interventions today. That is a matter of detailed debate for another day.
In opening for the Opposition on this Bill, I should say that we have faith in the jury system, where citizens play their role in our criminal justice system in such an exemplary manner. The public, of course, have confidence in decisions made by juries.
It is important to see the proposals in this Bill as one building block in the wall of improvements that can be made. The noble and learned Lord referred to some of the steps that the Government have already been trying to take towards improving the way in which cases may be brought effectively to a conclusion. One can look at better conditions for juries overall. The noble and learned Lord referred yesterday to practice directions. That will mean that, very shortly, if the Lord Chief Justice's directions are followed, fraud trials should not last for three months. There should be further training for judges. There should perhaps be more appropriate allocation of cases. I am aware that
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it is sometimes the case that a judge may have very appropriately and successfully handled a fraud case, but that he may never have had another case allocated to him in the whole of his career. Perhaps some expertise is being left to wither on the vine.
We need research into the way in which juries function. I know that the Government have been looking at that as well. Above all, far more effective, pre-trial management of the case is needed. The issues should be sorted out more clearly. Very few cases, I understand, require people to look at balance sheets and statements; it is more a matter of issues being sorted out. It is a case of "Who did what when?" and "Was it illegal?" The noble and learned Lord shakes his head, but I am told by those who have experience in these matters that cases need to be managed and presented more clearly.
As I have been made aware by submissions from the police and by their response to the Government, there is a need for sufficient police resources to investigate the offences in the first place. I have much sympathy with the police forces which are tasked with investigating those cases that are not referred to or taken up by the Serious Fraud Office. Police resources for fraud cases have to compete with those needed for violent crime. The Government's introduction of the Violent Crime Reduction Bill this week signals that they accept that violent crime has increased.
I was grateful to the Norwich Union for its helpful briefing this week. In 2004, it identified and prevented 15,000 insurance frauds. Of those, it estimates that 4,000 would have met the criminal level of burden of proof, but it has to be very selective about what it refers on to the police because of police resources. So it submitted 41 fraud complaints to the police. Generally, those involved organised crime or links to other serious crime, where it believed that the evidence that it could submit to the police was overwhelmingly persuasive. Of those 41 cases, 27 were subsequently investigated by the police. Eighteen came to court and all of them resulted in convictions. Those statistics offer an interesting guide to the level of crime in the fraud field. The noble and learned Lord has very properly referred to the importance of having the resources properly to filter and get the cases to court for resolution.
"is taking measures in partnership with local government and the private sector to bring new resources into play. We were very grateful for the offer from one respondent to provide some additional resources for the police and discussions are under way to see if a suitable project can be found".
Will the noble and learned Lord explain what the Government are planning and what progress has been made since last November on this project? It sounds like the privatisation of some kind of investigation into selected fraud cases. How practical are those plans and what level of development have they reached?
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In the debate on the Criminal Justice Act, we gave our commitment that we would work constructively with the Government to find ways in which we could make the jury system in fraud trials work even better than it already does. We are going to support sensible reform of the law on fraud, but we will study carefully this Bill throughout all its stages to ensure that the Government's proposals reduce the opportunity for injustice being done.
As the noble and learned Lord mentioned, fraud in the UK is indeed seriously damaging to the country, to companies and individuals alike. We are all vulnerable to the devious fraudster. Fighting fraud effectively matters. The Fraud Advisory Panel estimated in 2004 that the annual cost of fraud in the UK equated to the value of £240 for every man, woman and child. I notice that the noble and learned Lord referred to £230. I think we can forgive £10 between friends, or perhaps friends on occasions. It is a lot of money. The National Criminal Intelligence Service estimates that fraud contributes as much to UK organised crime as drug-related offences. It is a horrifying figure.
The main focus of this Bill is the creation of a single offence of fraud, which we support and believe should make the law more comprehensible. At present, juries cannot be given a single, straightforward definition of fraud. The current statutory offences are too specific to offer a comprehensive definition, while the common law offence of conspiracy to defraud is so wide that it offers little guidance on the difference between fraudulent and lawful conduct. That observation, to which the noble and learned Lord, Lord Ackner, has referred, was made by the Law Commission.
At present, serious fraud indictments may need to employ a number of different offences before the alleged fraudulent behaviour is fully covered, thus leading to long and potentially confusing trials. So the fraud offence in this Bill, which follows the Law Commission's recommendation, seems to be the right approach. It offers a single, comprehensive definition of criminal fraud, which can be used to make fraud indictments simpler and more self-explanatory. This should enable juries to focus on whether the facts of the case have been proved beyond reasonable doubt and to apply them to a simple, readily understandable definition of the offence.
The second advantage that should flow from a general offence of fraud is that it would be a useful tool for the prosecution of fraud from investigation through to trial. The present clutch of specific offences can result in the wrong one being employed, either at the police station or at court, when the facts of the case actually fit a different offence. A single offence which gives a clear definition of fraudulent behaviour should help to focus investigations and ensure that the right charge is put to the right defendant.
The third major advantage of the single offence is that it should make the law more able to adapt to the changing face of fraud as technology opens up new avenues to fraudsters to practise their crimes across cyberspace. The first limb of the single offence has the
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advantage of tackling the IT-borne offence of phishing, while also covering the old and detestable crime of the knocker on the doorstep, tricking peoplemostly the elderlyout of their valuable possessions for a pittance.
I look forward to examining the drafting of the new offence in Committee and to probing further the objectives and consequences of the new offences in the Bill, which seem at first blush to have much merit. The noble and learned Lord has referred to them, so I shall not cover them in detail. They comprise: the possession of articles for use in frauds or being involved in their manufacture or supply; extending to sole traders the offence of participation in fraudulent trading; and the Clause 11 offence of obtaining services dishonestly.
One of the key recommendations of the Law Commission's report was that the Clause 11 offence of obtaining services dishonestly should sit alongside the new, general crime of fraud. A key advantage of that would be that it would circumvent the existing problem that arises under the offence of obtaining by deception in respect of automated services provision. This is perhaps a gift to Mr Rupert Murdoch, who will no doubt welcome this measure as a weapon against those who try to get access to his digital channels by using illegal decoders to avoid paying a subscription to him. I pay two subscriptions to him. I certainly would never dream of avoiding paying as a customer. I wonder, however, how heavily the investigation of such offences will fall upon police resources.
In the light of the creation of the new single offence of fraud, it is astonishing that the Government have decided to retain the old and flawed offence of conspiracy to defraud. The Law Commission very clearly and firmly called for its repeal. The Government's own report last October noted that:
My noble friend Lord Kingsland, who is leading for us on this Bill, will address the issue of conspiracy to defraud in detail further on. If the Government are determined to retain the conspiracy offence, surely we should at least bring it up to date to ensure that it is fit for purpose in the modern day.
There is one line of inquiry that I would like to examine in Committee, and in a helpful spirit I give notice of it very briefly now. I refer to the exemption given to married and civil partners in Section 2(2)(a) of the Criminal Law Act 1977. The consequence of that section is that if the husband and wife, or civil partners, are the only persons who conspire together to commit a fraud, they cannot be convictedthey get away with itbecause the activity is not in itself an offence. They have to conspire with somebody else before it becomes an offence.
The rule causes real problems. If a jury is not satisfied that there was another party to the conspiracy, it has to be directed to acquit the husband and wifeor in future, of course, the civil partners. Can that really be right in the 21st century? It harks back to the days when a wife was
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considered the chattel of her husband, unable to exercise her own will. As I approach my own 35th wedding anniversary, I can say that I am no chattel.
In conclusion, we shall support the proposals in this Bill if they make the law of fraud clearer and more straightforward. We believe that if we can achieve that improvement, everybody concerned in the process, whether they are jurors, police, victims, defendants or lawyers, will be better placed to understand who has committed a crime and who has not. That can only be of benefit to us all.
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