This is the third of four articles focusing on benefit fraud prompted by the case of Coventry City Council v Vassel 2011 EWHC 1542 Admin. In particular, it highlights the additional checks solicitors make when reviewing the evidence and alternative penalties.
Checking: the elements of the offence including date, time and place (include system and date of claim form)
The date and place will not normally be an issue, particularly if the prosecution has laid the information by reference to, on or about a given date. There are, however, some situations where the date is important and the finer details are worth checking. A recent prosecution concerned an alleged false statement on a claim form which failed to mention a co-habitee. There was also information on failure to notify a change in circumstances. The date of the information on the alleged false claim was 20 December 2010. This date was chosen because it was the date on which the claim form arrived at the local authority offices, It was duly stamped as such. At first blush this seemed correct because the employer’s records showed that the co-habitee moved into the property on 16 December 2010. As it turned out, the allegation had to be withdrawn because the form was signed on 14 December 2010.
The above situation gives rise to three points of interest. Firstly, there is the issue of the additional information for failing to notify. If it can be proved that there has been a false statement, it would be wrong and unnecessary to lay information for failing to notify employment details that should have been included in the claim form. If authority is needed HB/CTB circular F8/2002 advises that the failure to notify legislation should not be used where there is a false statement. There will, of course, be exceptions to that rule, but not in the circumstances described above.
The second point is that a large number of claims are made in respect of property that the claimant is about to move into. Whilst this issue has yet to be raised in my experience, it seems to me that there is some force behind the argument that the statement was not false at the time it was made if all the ingredients of the offence are not made out. The missing ingredients here being the living arrangements, which do not accord with the claim at the time it was made.
Whilst it is difficult to predict how an appellate court might view this situation, the prosecutor is advised to word the information on the basis that a false document has been produced when it reaches the local authority as opposed to alleging that it was false at the time it was made. Failure to do so could lead to the matter being challenged.
The third point is that if the original claim was false and there was no entitlement to benefit in the first instance there has been no material change in circumstances to report.
Fraudulent from the start claims
This paragraph demonstrates the third point above in more detail. It is not uncommon for false claims to date back a number of years. I understand that at least one Department for Work and Pensions office does not retain forms beyond five years. The absence of a claim form for 2001 or thereabouts prompted the prosecutor in one case to lay charges for failing to notify a change of circumstances instead of alleging a false statement. The circumstances were that the claimant had owned undeclared property since 1998.
The file was complex and took over 30 hearings to conclude. This may explain why the file passed through numerous firms of solicitors before it became apparent that these allegations had no hope of success: the reason being that there can be no material change of circumstances if the claimant was not entitled to benefit in the first instance. The recent case of R v Nsangu Laku CA  EWHC Crim 2053 also demonstrates this point.
The first part of this article should prompt lawyers to look for the prescribed information on or with the claim form. There should also be similar questions asked regarding review forms which are treated as claims forms for reasons mentioned earlier. The wording of the review form may also be an issue for reasons other than the prescribed information.
I am aware of a case where a false statement was alleged in connection with a review form which asked for no other information than changes in circumstances over the last four weeks. There was in fact a failure to notify a change in circumstances, but those circumstances arose long before the review form was signed. The summons was withdrawn. In the event that an allegation is based on a review form, practitioners should look specifically at the forms to see whether there has truly been a failure to notify in accordance with the wording of that particular form.
In more general terms, the lack of precision on the claims forms can give rise to difficulties for the prosecution. In one prosecution, where it was alleged that a second home was not declared, there was not a specific section dealing with property on the form. The defendant was caught out by an explanatory note which was located under an investment property heading.
Claims forms drafted in this way certainly raise issues as to the dishonesty element of an offence. Furthermore, claim forms are sometimes far from clear in some respects and are usually about 36 pages long. The wording of the forms has not escaped judicial criticism. Lady Justice Smith had the following to say about one particular claim form: 'I would add also that, in my view, the drafting of the declaration on this form could be greatly improved. The position of a partner is less clear than it should be. The signature of the partner is not required; it is only optional. There is no requirement that the partner should assert that he or she has read the form.
'The declaration is that the contents are accurate and complete, which implies that the signatory, as partner, is aware of the contents. But the terms of the declaration are not prominent, nor do they obviously relate to the partner's signature as opposed to that of the claimant. The warning that a failure to provide accurate information might result in legal action is not as clear, or as prominent, as it could be.' [Flintshire County Council v Reynolds  EWHC 195].
Alternative remedy (admin penalty)
A number of prosecutions could more appropriately be disposed of by way of an administrative penalty. Any overpayment of £2,000 or less should fall into that category. In the vast majority of cases these matters are put in court because the offender fails to attend the local authority offices for a formal interview. In the absence of a formal interview followed by the issue of administrative penalty, the investigation department usually press for the offender to be prosecuted.
During the normal course of events, information is laid. Surprisingly, there appear to be very few requests if any, from defence lawyers to dispose of the matter by way of administrative penalty. It is also worth knowing that the £2,000 yardstick is not set in stone. There have to be some circumstances where other amounts qualify for an administrative penalty at the discretion of the local authority.
A reduction in the amount of overpayment is unlikely to result in the summons being withdrawn unless there are substantial mitigating circumstances or the amount falls with the remit of an administrative penalty. Nevertheless, it is clear that the sentencing tariff is closely linked to the amount of overpayment. According to Neil Bateman of Garden Court Chambers, 67% of benefit overpayments were incorrect in 1997. Reference is made to his erudite article entitled Benefit of the doubt.
More recently there has been a concern that the figure could be even higher. In fact the figures are often based on information supplied by investigators without question or verification. Figures are also based on property valuations which do not appear to be linked to house price data. Whilst this author has little experience of this important issue, solicitors who prosecute or defend benefit fraud are directed to Neil Bateman’s article or better still to his current training course with CLT.
The article continues next time by looking at different forms of notification.
Jack Henriques, solicitor and trainer, and co-author of Local Authority Investigations and Prosecutions