June 2006

The Fraud Bill has serious implications for company directors and other similar officers

Recent estimates suggest that fraud costs the UK economy in the region of 16 billion a year and is growing rapidly. At present there is no specific offence of "fraud" in English criminal law. In recent years a number of high-profile and costly fraud prosecutions have collapsed and concern has been expressed about whether the current criminal offences and prosecution arrangements are adequate to deal with the many and varied types of fraud that are currently being perpetrated.

The Theft Acts of 1968 and 1978 created the statutory offences of theft and deception. There is also the common law offence of conspiracy to defraud. It has long been considered that this existing law fails in respect of fraud on a number of counts and in particular:

  • it is not readily comprehensible to juries;

  • it is inadequate for effective prosecution;

  • it is unfair to defendants; and

  • it does not cater for complex frauds which utilise modern technology.

The Law Commission in its 2002 report recommended the abolition of the eight offences of deception and the offence of conspiracy to defraud, replacing them with two new offences; one of fraud and one of obtaining services dishonestly. The Fraud Bill, which was introduced last year, has embraced these recommendations and also applies the new offences to bodies corporate. If a company is found guilty of one of the new offences and it is proven that the offence was committed with the consent or connivance of its directors or senior officers then the individuals will also be prosecuted.

New seminar

It is important that directors, managers, company secretaries and other similar officers understand the law relating to fraud. To help you develop this understanding we are introducing a new seminar. The first presentation will be on 18th July, for more details please click here.

Business Briefing Contributions

If you have a particular area of expertise and knowledge that you would like to share with key people in the business community then please go to Business Briefing Contributions and submit your idea.

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