Fraud

Fraud is a dishonestly-made false pretence, in order to bring about a practical result.

Fraud can be quite straightforward…

fraud1

…or extremely complicated:

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Actus Reus – false pretence

A pretence can be express or implied.

Examples of an express false pretence are:

  • telling someone that you will pay for the goods they are selling you upon delivery, knowing that you plan to run off with the goods without paying;
  • a “dine and dash” in a restaurant (or, using my favourite example from my time as a criminal defence solicitor, a “full body wax and dash”);
  • pretending to be somebody else in order to piggy-back on their title / reputation;
  • telling someone that you have carried out a certain amount of work on their home/car in order to be paid for it, when in actual fact you have not done so;
  • making insurance claims that you know do not reflect the true value of your property / extent of the damage;
  • making up qualifications on your CV or website to solicit ko-fi donations from people under the impression that you’re a qualified solicitor*

Examples of an implied false pretence are:

  • not revealing, when recommending a company for a contract that your organisation has put out to tender, that you have taken a bribe from said company;
  • not correcting someone when you know that they have mistaken you for someone else, and are giving you things that you would be entitled to otherwise;
  • the “Bulls On Parade” case (click below for a transcript):

James Paton (1858  3 Irv. 208)

  • The accused had entered bulls into a livestock competition
  • The accused had injected air under the skin of the bulls, and artificially lengthened their horns, in order to make them look better(?).
  • It was held that this was fraudulent, on the basis of an implied false pretence.

Whether something is false or not is generally a straightforward matter of fact. After all, if the pretence is true, no crime is committed. The criminal law is not there to protect someone who loses out in an honestly-made bad bargain. There may be civil law remedies based on contract law for that sort of thing, but the test for criminal liability on the basis of fraud is a high bar.

Actus Reus – a practical result

There has to be a causal link between the pretence and the result. In other words, if the purported victim was not actually deceived, then there is no complete fraud (there may, of course, be an attempted fraud, which is criminal in itself).

As soon as the victim acts differently to how they would have otherwise, then that ought to be enough to show a practical result of the fraud, and therefore the crime is completed.

Just as there are a million and one examples of false pretences, there are a million and one examples of what might constitute a practical result. It is important to note, though, that there does not have to be any actual gain on the part of the accused, and any actual loss on the part of the victim.

Adcock v Archibald (1925 JC 58)

  • The accused was a miner. He had attached a tag to a colleague’s pile of coal, which falsely identified him as having mined it. 
  • The only practical result was that his employer recorded that the accused had dug the coal. He was not paid anything extra.
  • It was held that this was a “practical result”, and therefore fraudulent.
  • Lord Justice-General Clyde: “It is … a mistake to suppose that to the commission of fraud it is necessary to prove an actual gain by the accused, or an actual loss on the part of the person alleged to be defrauded.  Any definite practical result achieved by the fraud is enough.

This principle in Adcock was recently challenged by Craig Whyte (of Rangers infamy), but it was held to still be “good law”:

adcock

So, in other words, as long as there is a causal link (see the section on the legal concept of causation), almost anything could be construed as a practical result of fraud.

Mens Rea – dishonesty

The accused must know that their pretence is false, and intend to bring about a practical result. Carelessness or recklessness as to the truth of their pretence is unlikely to be enough to constitute the crime of fraud.

On dishonesty in general: there is a relatively recent UK Supreme Court case – Ivey v Genting Casinos UK Ltd (t/a Crockfords) – that considers dishonesty in detail. It deals with the concept of dishonesty as it relates to civil disputes, but touches upon how it relates to the criminal law (albeit, English and Welsh criminal law, not Scottish). It’s worth a read if you’re a fan of The Real Hustle. At the time of writing, I’m not aware of any Scottish criminal cases being affected by the “new” test for dishonesty in Ivey, but will update this site if that changes.

*I’m legit, I swear (but then again, I would say that if I were trying to defraud you).