Fraud Act 2006
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| Fraud Act 2006 | |
|---|---|
 Sodacan · CC BY-SA 3.0 · source | |
| Title | Fraud Act 2006 |
| Enacted by | Parliament of the United Kingdom |
| Year | 2006 |
| Citation | 2006 c. 35 |
| Territorial extent | England and Wales, Scotland, Northern Ireland |
| Royal assent | 8 November 2006 |
| Status | Current |
Fraud Act 2006 The Fraud Act 2006 is a statute enacted by the Parliament of the United Kingdom to consolidate and modernise criminal law on deception and dishonest conduct, replacing elements of earlier statutes such as the Theft Act 1968 and provisions formerly prosecuted under the common law of conspiracy. The Act creates a general offence of fraud and new modes of liability intended to address emerging threats exemplified by scandals involving institutions like Barclays PLC, Royal Bank of Scotland, and cases reminiscent of the Enron scandal. It has been applied in prosecutions involving individuals linked to corporate entities such as Lloyds Banking Group, public bodies like the Serious Fraud Office, and investigations akin to those in the Leveson Inquiry.
Background and Legislative History
The legislative origins trace to reviews by the Law Commission and consultations influenced by incidents comparable to the WorldCom scandal and the collapse of Maxwell Communications. Parliamentary debates in the House of Commons and the House of Lords referenced precedents from the Companies Act 1985 and the Companies Act 2006, as well as enforcement practice by the Crown Prosecution Service and investigatory powers used by the Financial Conduct Authority. Drafting navigated tensions between directives from the European Convention on Human Rights and domestic jurisprudence shaped by rulings in the Supreme Court of the United Kingdom and the European Court of Human Rights. Key sponsors and participants in the legislative process included MPs active on committees such as the Justice Committee and legal figures from the Attorney General's Office.
Key Provisions and Offences
The Act establishes three principal modes of committing fraud: by false representation, by failing to disclose information, and by abuse of position. These provisions draw doctrinal contrast with older offences prosecuted under instruments like the Forgery and Counterfeiting Act 1981 and align with prosecutorial approaches seen in investigations at the Serious Fraud Office and prosecutions pursued by the Director of Public Prosecutions. The statute defines dishonesty with reference to case law including decisions from the House of Lords and the Supreme Court of the United Kingdom, and creates ancillary offences such as obtaining services dishonestly and possession of articles for use in fraud. Law enforcement agencies such as the City of London Police and agencies modelled on the Federal Bureau of Investigation have cited the Act in cross-border cases involving entities like HSBC Holdings and Standard Chartered.
Defences and Liability
Defences under the Act engage contested issues of mens rea and subjective belief, interacting with standards articulated in rulings by courts such as the Court of Appeal of England and Wales and the High Court of Justice. The Act allows for consideration of a defendant’s genuine belief in a representation, connecting to legal doctrines canvassed in cases from the Privy Council and comparative examples in jurisdictions influenced by the Commonwealth of Nations. Liability extends to conspirators, accessories and corporate bodies, invoking corporate criminal liability debates addressed in the Companies Act 2006 and in inquiries like the Scott Inquiry. Prosecutors from the Crown Prosecution Service often assess defences alongside regulatory remedies applied by bodies such as the Financial Reporting Council.
Sentencing and Enforcement
Sentencing under the Act reflects statutory maxima and guidelines issued by the Sentencing Council for England and Wales, with custodial sentences imposed in high-profile prosecutions comparable to those following the Miles v. R style complex fraud trials. Enforcement is conducted by agencies including the Serious Fraud Office, City of London Police, and regional forces collaborating with international partners like Europol and the International Criminal Police Organization (INTERPOL). Confiscation and restraint orders under the Act interact with proceedings under the Proceeds of Crime Act 2002 and enforcement by agencies such as the National Crime Agency.
Impact and Reception
The Act has been subject to commentary from legal academics at institutions such as Oxford University, Cambridge University, and University College London, with critiques focusing on the breadth of the dishonesty test and prosecutorial discretion exercised by offices like the Director of Public Prosecutions. Financial institutions including Barclays PLC and HSBC Holdings have adjusted compliance frameworks in response, while advocacy groups such as Liberty and professional bodies like the Law Society of England and Wales have lobbied for clarifications. Comparative commentators have contrasted the Act with statutory regimes in the United States and Australia following corporate scandals like Enron and WorldCom.
Amendments and Related Legislation
Subsequent legislative and regulatory developments have interacted with the Act, including measures in the Proceeds of Crime Act 2002, reforms under the Companies Act 2006, and procedural rules used by the Crown Court. Notable policy reviews and amendments arose from recommendations by the Law Commission and inquiries referencing the Act in light of cases involving financial institutions such as Royal Bank of Scotland and Northern Rock. International cooperation frameworks, including treaties negotiated by the Foreign, Commonwealth and Development Office, and regulatory regimes enforced by the Financial Conduct Authority and the Serious Fraud Office continue to shape the Act’s operation.