Fraud Bill [HL]

I attempted to explain this at Second Reading. Clause 3 makes it an offence to fail to disclose information where there is a legal duty to do so. It also makes clear that the offence of failing to   disclose information must be done dishonestly. Both the amendments appear to create the possibility that a person could be prosecuted for behaviour that would not be described as dishonest. Perhaps I may interpolate one word on the noble Lord’s observation about the emphasis being placed on dishonesty. I am placing emphasis on dishonesty, as the Government do and as the Law Commission also did, and applying the test which arose from the case of Ghosh. The noble and learned Lord, Lord Lloyd of Berwick, referred to it at Second Reading, and it is supported strongly and applied throughout the courts in the country. We are entirely content that that test is workable in practice and can be determined by juries and other fact-finders. When the noble Lord studies Hansard, he will find that I have used both ““juries”” and ““fact-finders”” when I have been talking about this. The noble Lord is of course right that it is our stated intention that, in a very limited category of case, the Government propose to implement Section 43 of the Criminal Justice Act 2003. That is for debate on a later amendment, which I do not suspect we will reach today. While I admire the noble Lord for picking up my words in the way that he did, I am afraid that he will get no comfort from that. I turn to Amendment No. 9. The Government agreed with the Law Commission that dishonesty should be an underlying requirement for all three limbs of the general offence of fraud. The commission, after very careful consideration, concluded in paragraph 7.9 of its report that,"““we are persuaded  . . . that the element of dishonesty should be essential to (though not sufficient for) criminal liability for fraud””." That conclusion was widely supported by stakeholders in response to the Government’s consultation paper. It is an underlying safeguard for the innocent, and we do not see any justification for changing it now, for any limb of the general offence. As I have said, there is a shared understanding of what ““dishonesty”” means, thanks to the case of Ghosh. I remind noble Lords that the Ghosh test requires some subjective awareness by the offender that what he did was not in accord with the standards of ordinary people. This is an essential test for criminal liability for fraud. To remove the requirement for dishonesty would result in a criminal offence that is too widely drawn. The same would apply, if perhaps to a lesser extent, if we were to accept Amendment No. 10 and introduce the possibility of prosecutions for actions that were carried out not dishonestly but merely ““wrongfully””. We have no common understanding of what is meant by the term ““wrongfully””. We have a common understanding of what is meant by ““dishonestly”” because the case of Ghosh and our common experience tells us what it is. The Law Commission used the term ““wrongfully”” in its draft Bill, but that was because, at that stage, it wanted to find a drafting device, a label, to cover two different sets of circumstances which it believed ought to be covered in this clause. If I may paraphrase, those were a legal duty and a moral duty. We will come to those in later amendments. We did not agree, following the consultation, with part of its definition; that is, where there is no legal duty to disclose the information. Once we had made that policy decision not to include the non-legal duty, there was no point in retaining the label which the commission had come up with to describe the two sets of circumstances, so ““wrongful”” disappeared. In short, we agreed with the commission that dishonesty ought to be not a sufficient but an essential part of the offence. Therefore, we would resist any amendment, such as Amendment No. 9 or even Amendment No. 10, which would remove that from this offence.