Fraud Bill [HL]

Of course I anticipated that this would be the lively debate of the evening. In my long   letter to the noble Lords, Lord Kingsland and Lord Thomas, and copied to other noble Lords who participated in the earlier debate, I set out a detailed explanation of some of the considerations which have influenced the Government. The noble and learned Lord, Lord Lloyd of Berwick, was also kind enough to refer to the open meeting I held at which prosecutors were present precisely so that some of the points raised by noble Lords could be put and responded to directly by those who do have frontline experience. Of course I make no complaint that many noble Lords were unable to attend the meeting, but it was an opportunity to test the real concerns about abolition. In the event, I am sorry that noble Lords did not take it up. Let me emphasise the two strands of my response. First, although the Law Commission did include proposals to repeal the common law offence of conspiracy to defraud, during last year’s consultations it became quite clear that many respondents—indeed, the weight of the responses—were against its abolition on the grounds that the common law provides the flexibility to cope with a wide range of offences that cannot be replicated by the new offences. Experience has shown that conspiracy to defraud is particularly useful in managing the largest and most complex cases of fraud. Such cases can often involve several offences, multiple offenders and a series of activities spanning a number of years. In such instances, the charge of conspiracy to defraud can provide the court with the full story of the case and the criminality involved in a way that no other available offence can do. I want to return to that, and to the weight of respondents, particularly in the light of what has been said about those who do not support repeal. Secondly, I want to recognise two aspects of the effect of maintaining conspiracy to defraud. As was pointed out by the noble Lord, Lord Kingsland, the Law Commission noted that the new offences cannot replace conspiracy to defraud in every case. There will be forms of behaviour that merit prosecution—that was stated by the Law Commission in the passage to which the noble Lord drew attention—but which would not be considered criminal, other than under conspiracy to defraud. I remind noble Lords that the commission stated that it accepted that there may be a good case for imposing criminal liability in the case of some of these activities. It did not believe that the new offences being created cover the whole ground. The second aspect is the particular difficulty with the offence of statutory conspiracy as it stands because of limitations in that area of the law that I mentioned at Second Reading. The noble Lord, Lord Goodhart, made reference to that. I shall illustrate by giving an example. The law of statutory conspiracy requires a degree of knowledge of the substantive offence that is to be committed. That means that it is difficult to use against persons who are ignorant of the details of the fraud. They may be well aware that they are part of a fraudulent conspiracy, but if they do not know the conspiracy that is to be perpetrated, they may not be guilty of statutory conspiracy. Statutory conspiracy also requires that the parties to the conspiracy intend that the substantive offence be perpetrated by one or more of the conspirators to that conspiracy. That creates obvious difficulties in cases where the final offence is committed by someone outside the conspiracy. In order to illustrate this, I draw attention to the example set out in the annex to my letter of 15 July. I wanted it to be set out in writing, because it is difficult to grasp orally. The essence is this. A standard, large-scale credit card scam will involve a number of people and a number of steps. Credit card numbers are dishonestly obtained. Somebody dishonestly gains access to legitimate credit card balance checking services and selects individual cardholders with sufficient credit available. Somebody conducts biographical research to get information about the cardholders, sufficient to be able to impersonate them. Somebody takes over the accounts, impersonating the account holders, changing the billing address and obtaining duplicate cards. Somebody produces counterfeit identity documents that are then used to rent accommodation addresses and Internet ““office space””, and to open bank accounts. Then someone uses the accounts to purchase expensive goods that are delivered to the accommodation addresses. If every person involved in each stage had agreed to perpetrate the whole of the fraud, then it may well be possible to charge them all with a statutory conspiracy. But if in reality—it is, I am told, not uncommon—some of them are involved only in some stages, people conspiring together to get the card numbers from abroad could not be charged with the statutory conspiracy which extends beyond the limited part in which they have been involved because of the limitations on the law of statutory conspiracy. As a consequence, the court might then be faced with a series of smaller cases just dealing with a part of the overall conspiracy so that it would not see the full extent of the criminality or the fraud involved. It would risk not having a complete picture of the fraud and accepting answers of innocent behaviour which, when one saw the entire conduct, were not justified. The second part of this, illustrated by the same example, are the practical difficulties which can arise unless conspiracy to defraud can be used. Using that same example, it may be possible to charge the individuals—six, seven, eight, 10, or whatever—with their individual participation in the overall fraud. But if they are charged with different offences, the court is likely to order that they should be tried separately and the cases separated out. As a consequence, the court will not see the full criminality involved and will not see the full picture. On the other hand, to be able to prosecute as a conspiracy to defraud, the indictment could consist of one precise, clear, short count. To some extent I answer the noble Lord, Lord Thomas, by quoting what such an indictment could say, which is clear and precise and tells the defendants exactly what it is alleged they have done. It would allege that the defendants,"““conspired together and with others to defraud banks, credit card providers and their customers by . . .  obtaining personal banking details  . . . dishonestly using such information to effect changes of billing addresses  . . . dishonestly obtaining goods and services . . .  exposing banks to a liability to compensate account holders in the sums withdrawn””." The indictment can reflect the full extent of the criminal conduct in a way that prosecuting only the underlying statutory offences would not. Against that background, I turn to where the support for retaining the common law offence of conspiracy to defraud comes from. I cannot tell the Committee who responded in what way to the Law Commission because I do not have that information. The Law Commission, as the noble and learned Lord, Lord Lloyd, indicates rightly, set out at the end of its report those who had responded to the consultation. However, we do not know, with those few exceptions where the comments are referred to in the body of the report, who said what about this.