Following the government’s announcement to consolidate fraud law in a new bill, Stephen Ward asks specialists to assess the implications
Alleged fraudsters are different from the average clients faced by a criminal lawyer, according to Brian Spiro, a partner at London firm BCL Burton Copeland, who earlier in his career worked in more routine crime.
‘They make different demands – they are used to having professionals working for them, so they are very demanding, and rightly so, [whereas] somebody who has put a brick through a window will put his trust in the lawyer to handle the case.’ People accused of fraud will tend to test everything the solicitor suggests, and ask difficult questions.
‘They will understand a lot about the workings of the law, but they will be more familiar with civil litigation.’ Sometimes it is hard for businessmen to realise they will not have the choice of settling out of court with the Serious Fraud Office, he says.
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Fraud specialist solicitors themselves are facing a period of some uncertainty, with the announcement in October that fraud law is to be rewritten, or to be more accurate, written for the first time in a fraud Bill in the next Parliament (see [2004] Gazette, 28 October, 5).
Home Office minister Baroness Scotland, following a consultation earlier this year, said the intention was that a general offence of fraud could be committed by false representation, wrongfully failing to disclose information, or by abuse of position.
She said the focus would be on a defendant’s intention rather than the result.
Opinions differ among fraud specialists on how much this consolidation of the existing piecemeal law would affect actual practice.
Louise Delahunty, a partner at London fraud specialist law firm Peters & Peters, chaired the working group of the Law Society’s criminal law committee that responded to the consultation. She maintains that the Bill, if and when it comes, will not drastically affect fraud practice.
Says Ms Delahunty: ‘What we were saying in our response was that if there are shortcomings in the present system, have they studied it enough? We were warning to be careful if they changed anything. They’ve gone ahead, but they have retained the old law of conspiracy to defraud.’
Among those expecting a wider impact in the short term are Scott Ingram, head of the criminal and investigations department in the London office of Russell Jones & Walker. He says: ‘There is no doubt this will give scope for solicitors and defendants to say that they didn’t realise what they were doing was a crime.’
He says good lawyers do not like uncertainty; they like to be able to give good advice on what is a crime or what might be prosecuted.
Mr Spiro, who chaired the London Criminal Court Solicitors Association’s sub-committee on fraud law reform, is worried about the complicating effects of the proposed change, generating more work for the police and prosecuting authorities.
Mr Spiro anticipates a process of test cases and judicial reviews to follow the introduction of a new Act. ‘It is our job to test any new legislation,’ he says.
He also anticipates there may be an increase in the volume of cases, although that will depend on the prosecuting authorities’ decision on where to put their thresholds.
Most of the work generated will be at the level dealt with by the high street rather than the specialist firms, he expects.
But to put the changes into perspective, he says the impact on fraud practice will be less dramatic than wider-ranging new laws that have affected all crime including fraud, such as the Police and Criminal Evidence Act 20 years ago, the Human Rights Act 1998 and adjusting the right to silence.
Kevin Robinson, head of the regulation and investigations group at the London office of Irwin Mitchell, does not anticipate a great change in practice, because the essential defence will continue to be the absence of dishonesty. ‘The way people behave won’t change, and the evidence won’t change,’ he says. There would only be a major change in deciding who was guilty if the new law created an offence of fraud through negligence, without intent, he believes.
Firms fit criminal fraud into different boxes of general crime, regulation and civil fraud business, as the different names for the department within the various firms suggest. The business for all of the specialist firms goes beyond the traditional defence of prosecutions brought by the Serious Fraud Office, the Customs and Excise or the Inland Revenue (the latter two are now being brought together in a new prosecuting authority).
Peters & Peters, for example, sees the various civil and criminal fraud solicitors as virtually seamless.
Ms Delahunty says the landscape of white-collar crime and criminal fraud has changed with the increasing regulatory architecture. She says: ‘Increasingly with Financial Service Authority and other investigations, you don’t know, at the point when the investigation starts, if it’s going to be dealt with by a civil penalty or end up with a criminal prosecution. That’s where you have practitioners like us who can deal with both.’
Mr Robinson says Irwin Mitchell has separate civil and criminal fraud departments, but the client would not necessarily be aware of that. A solicitor from each department has just visited a man in prison at the same time. ‘To the client it is just a visit from his lawyers,’ he says.
BCL Burton Copeland has a general crime practice as well, while Russell Jones & Walker has a wider practice, and comes to its fraud expertise through its position as adviser to many associations such as the Police Federation.
Beyond the ‘premier league’ cases, there is fraud work too for many other law firms that have a smaller department. Sometimes, this will be regulatory, sometimes more straightforward criminal defence. Mr Spiro says: ‘Local firms will always find work out there.’ If they need expert advice, they may use the bar, he points out.
All the expert London firms represent defendants around the country, recognising that fraud is by no means restricted to the City. This is the case whether, like Irwin Mitchell, they have offices in the north, or like Kingsley Napley, they are all based in London. The regulators are in London, and so is the gossip.
Mr Robinson says: ‘I moved [the office] down to London four or five years ago because I realised it was the only place to do it properly.’ However, he stresses that he did not move all the firm’s expertise with him, and that the London and Sheffield offices frequently work together on cases.
And although the London specialist firms are relatively few, fraud is far from a closed shop. There is a strong camaraderie between lawyers in different firms, which colleagues in different specialisms envy, according to Mr Robinson. ‘I was welcomed with open arms when I came down, not seen as a threat,’ he says. ‘We meet often and share cases,’ he adds. Several fraud practitioners mention how successful London firm Corker Binning has been since its founders left Peters & Peters four years ago as evidence of the openness of the market – the smaller specialist firms have also benefited from linking up with large City practices that do not have the expertise in-house.
This relationship between firms stems partly from the nature of serious investigations and then trials, which last many years and have several defendants.
Fraud trials’ notorious length and complexity has traditionally brought with it pantechnicons of files and bundles. Now they are moving to paperless trials, but apart from the saving on wood pulp, Mr Robinson is unsure how much of an advance it is in practice.
He worked on a nine-month paperless trial at the Old Bailey recently, with no fewer than three computer monitors on his desk there. In one trial, he had a pile of CDs. In another, there was such a volume of evidence that it arrived on the higher capacity DVD storage medium. ‘I’m afraid there probably is a tendency to include more documentation because it is easier to reproduce and transmit now,’ he says.
‘The new technology has been grafted on the old process. People are still struck by how much time is spent doing nothing. The court still only sits for five hours a day.’
Stephen Ward is a freelance journalist
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