Fraud Bill [HL]

The noble Lord started by indicating that each of the proposed new subsections follows the same formula. He is also right to point out that the common, practical situation in any fraud case is that the intention is for the fraudster to make a gain for himself, or sometimes for another. We are entirely agreed that that has been properly put forward. But there will be other cases, ones that are less usual, in which for example fraudulent representation is made not with the intent to make a gain—or at least a gain of property, because such a gain is the only one that would count for the purposes of the clauses—but in order to cause loss to another. The noble Lord’s amendment would redraft that limb of each of the provisions. The noble Lord makes a good point in saying that frequently it is open to a jury to infer intention from the fact that the defendant knew that what he was about to do would, in the ordinary course of events, have that consequence. That is a matter of everyday experience and is often how we judge that someone intended a particular consequence. We would conclude that he knew very well that the consequence was what was going to happen and, in the absence of anything else, we can assume and find that he intended to do it. But one is still looking to find the intention, not to establish whether there is knowledge. Knowledge is a way of getting at the intention, but it is not the fundamental issue. The reasons for my problem with the noble Lord’s amendments are threefold. First, while in many cases there may be little difference in practical effect between his formulation and the way the Bill is drafted for the reasons I have just given, that would not necessarily be so in all of them. I can envisage circumstances in which his formula would both lower the hurdle for a prosecution and, in another respect, raise it. I shall explain that. If the effect of the amendment is that it can be said that the offender’s knowledge is such that in the normal course of events his behaviour would lead to loss by another, but that is certainly not what he intended—he may intend something other than that—is it right to make him criminally liable in those circumstances? I suggest that it is better to keep the hurdle at a height which puts the intention as the relevant state of mind. Further, it may imply a higher hurdle because of the ““ordinary course of events”” requirement. Again, I shall explain that. It would mean that the offence would not be made out if, in the ordinary course of events, the false representation will not cause a loss or expose anyone to a risk of loss even though that was absolutely what the offender intended. That may be due to unusual circumstances: he intended the loss, but in the ordinary course of events one would not expect it to take place. Perhaps it does but perhaps it does not. That leads me to the second objection, which is really a point of principle. The Bill has been drafted on the basis that it focuses on the conduct of the defendant rather than on the consequences of the defendant’s acts. In that respect it is different from the Theft Acts, which depended very much on the consequences of the conduct. The approach of looking at the conduct is that taken by the Law Commission and how the Government look at it. Fundamentally, an individual who dishonestly intends to cause loss, and in this case makes a false representation, is no less morally culpable because he fails to cause loss than the person who intends it and does in fact cause loss. It may affect the sentence, but in terms of whether there is or is not a criminal responsibility, we suggest that there is no difference between them. But. As I have just suggested, the test of the ““ordinary course of events”” may draw a distinction between the two. Thirdly, I can foresee practical problems. The test as proposed by the noble Lord would require the prosecution to prove knowledge that, in the ordinary course of events, loss would be caused to another. That would require at least some attention to be given to what one would expect to happen in the ordinary course of events, although I accept that in some cases that may be precisely how one proves the intention. But it would not necessarily be the way of establishing proof of intention, and if it were clear that the defendant had intended to cause the loss, why should he be any less responsible because the prosecution cannot prove—because it may not be the fact—that, in the ordinary course of events, loss had been intended? Let me summarise by saying that the approach taken in the clause as the Law Commission would have it and with which the Government agree, is to focus on conduct and on the intention of the defendant. While I recognise that looking at knowledge may well be a way of proving intention, it is only a way to that end. It is better to leave the test with a statement of the intention of the defendant, as the Government propose. I await to see how satisfied the noble Lord is with my response.