New anti-fraud strategy released

Last month the Home Office presented a new “cross-sector strategy and activity programme” entitled “Fighting Fraud Together – the strategic plan to reduce fraud.” The report, signed by 38 organisations including MPs, charities and businesses, sets out a new plan to reenergise the fight against fraud.

The report starts with a collective statement of intent signed by a representative of each organisation to give “fresh impetus” to fighting criminals “who attack us”. The figures are startling: the 2011 National Fraud Authority Annual Fraud Indicator estimates a loss of £38.4bn, of which £12.2bn is lost from the public sector (thereby impacting on already constrained budgets), £12bn from the private sector, £1.3bn from charitable organisations and £4bn from individuals.

What can be done to stem these startling losses? The report proposes a process of information sharing between organisations, including the collation of a compendium of information showing what individual organisations are doing to fight fraud. Most concerning to any defendant is the continued push to “detect, disrupt and punish fraudsters”, noting that “for some it is the loss of assets gained through their crimes that they fear most.”

The specific terms of the increased drive to disrupt “fraudsters” are largely undefined in the report. In section 2, the “Strategic Direction” is set out. Again there is an emphasis on sharing information but the main steer seems to be towards increasing the disruption and punishment of fraudsters, including increasing the use of civil litigation to “deny access to their criminal assets”, stating that they will make other sectors aware of the options available to them in the civil courts to increase their use.  This raises questions about what parliament’s intention was when they introduced civil recovery as an asset tool. There has already been much controversy about shopping centres using civil recovery threats to make shoplifters pay. Although this extension is within the remits of fraud, any extension in civil recovery – where guilt only needs to be proved to the civil standard – should be monitored closely.

The report also states that there should be “zero-tolerance” of public sector fraud, suggesting that we may see more prosecutions of this ilk in the future. There are policy issues with taking such a stance where clearly the public interest test as to whether to prosecute should apply on a case-by-case basis.

In its summary, the report sets out its clear intention: “more effective civil and criminal processes, as well as greater early restraint of criminal assets.” Clients should be warned that whilst the draconian process of asset restraint and recovery has perhaps felt unreasonable and restrictive to date, things may be about to get much worse.

This blog is based on an article published in the YFLA Newsletter, Volume 1, Issue 1 (23 November 2011).

Corker Binning is a law firm specialising in fraud, regulatory litigation and general criminal work of all types. For more information, call us on 0207 353 6000.