Fraud Bill [HL]

moved Amendment No. 18: After Clause 5, insert the following new clause— "ABOLITION OF OFFENCE OF CONSPIRACY TO DEFRAUD The common law offence of conspiracy to defraud is abolished." The noble Lord said: In speaking to Amendment No. 18, I will speak to the other amendments in this group: Amendments Nos. 32 to 34, 37 to 40, 43 and 44, all of which are purely consequential on this amendment. Amendment No. 18 raises probably the most controversial single issue in this Bill. It is a simple amendment, which abolishes the common-law offence of conspiracy to defraud, and does so more or less in those words. The Law Commission strongly recommended the abolition of this offence. Conspiracy to defraud is an offence which, among other things, makes it criminal for two people to agree to do something that it would not be unlawful for one person to do on their own. That seems to be not just an anomaly but an absurdity. The Law Commission's report says, at paragraph 3.5: "Either conspiracy to defraud is too wide in its scope (in that it captures agreements that are rightly not criminal) or the statutory offences are too narrow (in that they fail to catch certain conduct which should be criminal)—or, which is our view, that the problem is a combination of the two. On any view, the present system is anomalous and has no place in a coherent criminal law". In paragraph 9.4 of its report, the Law Commission comes back to the issue, and points out that there is a wide range of dishonesty, potentially criminal in common law as conspiracy to defraud, but not within the new offences it recommends. It continues: "We accept that there may be a good case for imposing criminal liability in the case of some of these activities where, apart from conspiracy to defraud, no such liability currently exists. As far as we know, however, conspiracy to defraud is very rarely used in this kind of case. If it is thought that certain torts, breaches of contract or equitable wrong should be criminal, legislation can be framed with reference to the particular kinds of conduct involved. To retain conspiracy to defraud on the ground that it might occasionally prove useful in such a case would in our view be an excess of caution. Since it is not practicable to identify all such cases in advance, it would mean that we could never be in a position to abolish conspiracy to defraud—unless we were willing to replace it with a general dishonesty offence, an option that we rejected in part V above. The advantages of abolishing, in our view, greatly outweigh any possible advantage that might accrue from retaining it alongside the new offences we recommend. We believe that those offences cover enough of the ground presently covered by conspiracy to defraud to make it unnecessary to retain that offence any longer". I have received a helpful letter from the noble and learned Lord the Attorney-General setting out the Government's reasons for retaining conspiracy to defraud. It refers to the views of the Fraud Advisory Panel, which takes the view that abolition would make it difficult to prosecute the largest and most serious cases of fraud. As I said on Second Reading, that is making the tail of procedure wag the dog of substantive law. I recognise that a number of submissions were made in response to the Government consultation that argued in favour of retention of the common law offence, but it is fair to say that they mostly came from groups such as the Fraud Advisory Panel, to which one might respond, "Well, they would say that, wouldn't they?". A considerable number of submissions leant the other way. The new fraud offences are wider and less technical than the old ones and should make the process of trying fraud cases considerably simpler. The noble and learned Lord's letter refers to some technical difficulty with the law of statutory conspiracy—for example, conspiracy to commit a statutory offence—that will not be abolished by the amendment. That should be solved by the further report on which the Law Commission is working. The Government have stated that their aim is to abolish the common law offence in the long term. They want to wait to see how the simplified fraud offences work in practice. Although I agree with the Law Commission that it would be best to abolish them, I see some force in the Government's argument. However, if, as I hope, the new offences are found to work well, I want the Government to be able to abolish common law conspiracy, not to have to wait for a new legislative slot. The best way to do that may well be to write the amendments into the Bill. The Government will then have the power to decide when the new clause and consequential amendments come into force. The Government could defer that date until it is apparent that there is no longer need for the catch-all offence. In response to the consultation, the Government did not like that idea, but it seems sensible because, among other things, it removes the need for new primary legislation. The Attorney-General's letter sets out an example of a case where it would be appropriate to charge people with conspiracy to defraud rather than with statutory fraud. The example given is plainly fraudulent and would be a crime if carried out by an individual. That shows the defects in criminal procedure that make it impossible to link different elements of that one fraud into a single charge. Even if it is too soon to abolish the common law offence altogether, it should at least be possible to remove the worst anomaly by providing that conspiracy to defraud should not extend to activities that, if carried out by one person, would not constitute a criminal offence. I beg to move.