Conspiracy to defraud
Encyclopedia
Conspiracy to defraud is an offence under the common law
of England and Wales
and Northern Ireland
.
in Scott v Metropolitan Police Commissioner, when he said that Conspiracy to defraud therefore contains two key elements; that the conspiracy involved dishonesty
, and that if the conspiracy was undertaken, the victim's property rights would be harmed. This does not require the defendants' actions to directly result in the fraud; in R v Hollinshead, the House of Lords held that producing devices designed to alter electricity meter readings constituted conspiracy to defraud, even though the actual fraud would be carried out by members of the public rather than the conspirators. In two situations, it will not even be necessary for the actions to directly lead to any kind of financial loss for the victim; these are when the conspirators plan to deceive a person holding public office into acting counter to their duties, and when the conspirators know that their actions put the victim's property at risk, even if the risk never materialises.
The following cases are also relevant to this offence:
Although most fraud
s are crimes, it is irrelevant for these purposes whether the agreement would amount to a crime if carried out. If the victim has suffered of any financial or other prejudice there of, there is no need to establish that the defendant deceived him or her. But, following Scott v Metropolitan Police Commissioner (1974) 3 All ER 1032, it is necessary to prove that the victim was dishonestly
deceived by one or more of the parties to the agreement into running an economic risk that he or she would not otherwise have run, if the victim has not suffered any loss. For the mens rea
, it is necessary to prove that "the purpose of the conspirators (was) to cause the victim economic loss" (per Lord Diplock in Scott). For the test of dishonesty, see R v Ghosh (1982) 2 All ER 689.
did not, by abolishing the common law offence of cheating
, thereby abolish the common law offence of conspiracy to defraud.
Section 5(1) of the Criminal Law Act 1977
does not affect the common law offence of conspiracy so far as it relates to conspiracy to defraud.
Section 12(1) of the Criminal Justice Act 1987 provides that:
Paragraphs (a) and (b) are derived from section 1(1) of the Criminal Law Act 1977
and refer to the offence that that section creates.
As to section 12, see R v Rimmington, R v Goldstein [2005] UKHL 63.
History
Before 20 July 1987, section 1 of the Criminal Law Act 1977 did not apply in any case where the agreement in question amounted to a conspiracy to defraud at common law.
History
The following specimen count was formerly contained in paragraph 13 of the Second Schedule to the Indictments Act 1915
before it was repealed.
to imprisonment for any term not exceeding ten years, or to a fine, or to both.
.
See the following cases:
See article 11 of the Criminal Justice (Serious Fraud) (Northern Ireland) Order 1988 (S.I. 1988/1846 (N.I. 16))
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
of England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...
and Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
.
England and Wales
The standard definition of a conspiracy to defraud was provided by Lord DilhorneReginald Manningham-Buller, 1st Viscount Dilhorne
Reginald Edward Manningham-Buller, 1st Viscount Dilhorne PC, QC , known as Sir Reginald Manningham-Buller, Bt, from 1954 to 1962 and as The Lord Dilhorne from 1962 to 1964, was an English lawyer and Conservative politician...
in Scott v Metropolitan Police Commissioner, when he said that Conspiracy to defraud therefore contains two key elements; that the conspiracy involved dishonesty
Dishonesty
Dishonesty is a word which, in common usage, may be defined as the act or to act without honesty. It is used to describe a lack of probity, cheating, lying or being deliberately deceptive or a lack in integrity, knavishness, perfidiosity, corruption or treacherousness...
, and that if the conspiracy was undertaken, the victim's property rights would be harmed. This does not require the defendants' actions to directly result in the fraud; in R v Hollinshead, the House of Lords held that producing devices designed to alter electricity meter readings constituted conspiracy to defraud, even though the actual fraud would be carried out by members of the public rather than the conspirators. In two situations, it will not even be necessary for the actions to directly lead to any kind of financial loss for the victim; these are when the conspirators plan to deceive a person holding public office into acting counter to their duties, and when the conspirators know that their actions put the victim's property at risk, even if the risk never materialises.
The following cases are also relevant to this offence:
- R v Orbell (1703) 6 Mod Rep 42, (1703) 12 Mod Rep 499
- R v Button (1848) 11 QB 929, (1848) 18 LJMC 19, (1848) 12 LT (OS) 309, (1848) 13 JP 20, (1848) 12 Jur 1017, (1848) 3 Cox 229
- R v Yates (1853) 6 Cox 441
- R v De Kromme (1892) 66 LT 301, (1892) 56 JP 683, (1892) 8 TLR 325, (1892) 17 Cox 492
- R v Quinn (1898) 19 Cox 78
- R v Boyle and Mears, 94 Cr App R 158, CACourt of Appeal of England and WalesThe Court of Appeal of England and Wales is the second most senior court in the English legal system, with only the Supreme Court of the United Kingdom above it...
Although most fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
s are crimes, it is irrelevant for these purposes whether the agreement would amount to a crime if carried out. If the victim has suffered of any financial or other prejudice there of, there is no need to establish that the defendant deceived him or her. But, following Scott v Metropolitan Police Commissioner (1974) 3 All ER 1032, it is necessary to prove that the victim was dishonestly
Dishonesty
Dishonesty is a word which, in common usage, may be defined as the act or to act without honesty. It is used to describe a lack of probity, cheating, lying or being deliberately deceptive or a lack in integrity, knavishness, perfidiosity, corruption or treacherousness...
deceived by one or more of the parties to the agreement into running an economic risk that he or she would not otherwise have run, if the victim has not suffered any loss. For the mens rea
Mens rea
Mens rea is Latin for "guilty mind". In criminal law, it is viewed as one of the necessary elements of a crime. The standard common law test of criminal liability is usually expressed in the Latin phrase, actus non facit reum nisi mens sit rea, which means "the act does not make a person guilty...
, it is necessary to prove that "the purpose of the conspirators (was) to cause the victim economic loss" (per Lord Diplock in Scott). For the test of dishonesty, see R v Ghosh (1982) 2 All ER 689.
Relationship to statutory conspiracy etc
Section 32(1)(a) of the Theft Act 1968Theft Act 1968
The Theft Act 1968 is an Act of the Parliament of the United Kingdom. It creates a number of offences against property in England and Wales.On 15 January 2007 the Fraud Act 2006 came into force, redefining most of the offences of deception.-History:...
did not, by abolishing the common law offence of cheating
Cheating (law)
At law, cheating is a specific criminal offence relating to property.Historically, to cheat was to commit a misdemeanour at common law. However, in most jurisdictions, the offence has now been codified into statute....
, thereby abolish the common law offence of conspiracy to defraud.
Section 5(1) of the Criminal Law Act 1977
Criminal Law Act 1977
The Criminal Law Act 1977 is an Act of the Parliament of the United Kingdom. Most of it only applies to England and Wales. It is mainly significant because it defines the offence of conspiracy in English law...
does not affect the common law offence of conspiracy so far as it relates to conspiracy to defraud.
Section 12(1) of the Criminal Justice Act 1987 provides that:
Paragraphs (a) and (b) are derived from section 1(1) of the Criminal Law Act 1977
Criminal Law Act 1977
The Criminal Law Act 1977 is an Act of the Parliament of the United Kingdom. Most of it only applies to England and Wales. It is mainly significant because it defines the offence of conspiracy in English law...
and refer to the offence that that section creates.
As to section 12, see R v Rimmington, R v Goldstein [2005] UKHL 63.
History
Before 20 July 1987, section 1 of the Criminal Law Act 1977 did not apply in any case where the agreement in question amounted to a conspiracy to defraud at common law.
Indictment
See the following cases:- R v Landy and others, [1981] 1 WLR 355, 72 Cr App R 237, [1981] 1 All ER 1172, [1981] Crim LR 326, CA
- R v Cohen and others, The Independent, 29 July 1992, CA
History
The following specimen count was formerly contained in paragraph 13 of the Second Schedule to the Indictments Act 1915
Indictments Act 1915
The Indictments Act 1915 was an Act of the Parliament of the United Kingdom that made significant changes to the law relating to indictments. The law relating to indictments evolved during the seventeenth and eighteenth centuries and became lengthy, confusing and highly technical to the point...
before it was repealed.
Mode of trial and sentence
A person guilty of conspiracy to defraud is liable on conviction on indictmentIndictment
An indictment , in the common-law legal system, is a formal accusation that a person has committed a crime. In jurisdictions that maintain the concept of felonies, the serious criminal offence is a felony; jurisdictions that lack the concept of felonies often use that of an indictable offence—an...
to imprisonment for any term not exceeding ten years, or to a fine, or to both.
Jurisdiction
Conspiracy to defraud is a Group B offence for the purposes of Part I of the Criminal Justice Act 1993Criminal Justice Act 1993
The Criminal Justice Act 1993 is a United Kingdom Act of Parliament that set out new rules regarding drug trafficking, proceeds and profit of crime, financing of terrorism and insider dealing.-External links:**...
.
See the following cases:
- Attorney General's Reference (No 1 of 1982) [1983] QB 751, [1983] 3 WLR 72, [1983] 2 All ER 721, [1983] Crim LR 534
- DPP v Doot and others [1973] AC 807, [1973] 2 WLR 532, [1973] 1 All ER 940, 57 Cr App R 600, [1973] Crim LR 292, HL
- Board of Trade v Owen [1957] AC 602, [1957] 2 WLR 351, [1957] 1 All ER 411, 41 Cr App R 11, affirming R v Owen [1957] 1 QB 174
Northern Ireland
Article 13(1) of the Criminal Attempts and Conspiracy (Northern Ireland) Order 1983 (S.I. 1983/1120 (N.I. 13)) does not affect the common law offence of conspiracy so far as it relates to conspiracy to defraud.See article 11 of the Criminal Justice (Serious Fraud) (Northern Ireland) Order 1988 (S.I. 1988/1846 (N.I. 16))