Fraud solicitors: Civil and Criminal Fraud
Fraud comes in many different forms, and often the lines can be blurred between civil and criminal fraud.
It’s now easier than ever to challenge someone in your business you think is guilty of internal fraud. The Companies Act 2006 has made it possible for shareholders, even minority shareholders, to bring a case for directors to be held responsible for any wrongdoings performed by the company. Meanwhile, the Fraud Act 2006 has made it much harder for fraud defendants to withhold any documents from you that might help your case.
What is fraud?
Fraud is a legal term used to describe dishonest and deceitful conduct with the intent to deceive and to obtain a benefit or cause a loss.
The Fraud Act 2006 is the primary legislation governing fraud in England and Wales, and it defines fraud as an act committed by an individual with the intent to make a gain for themselves or someone else, or to cause a loss to another person or entity.
The act defines three types of fraud:
- Fraud by false representation: when an individual makes a false representation, whether by words or conduct, with the intent to deceive someone else and to gain a benefit or cause a loss.
- Fraud by failing to disclose information: when an individual fails to disclose information that they have a legal duty to disclose, with the intent to gain a benefit or cause a loss.
- Fraud by abuse of position: when an individual occupies a position in which they are expected to safeguard the interests of another person or entity, but instead, they abuse that position with the intent to gain a benefit or cause a loss.
If an individual is found guilty of fraud under English law, they can face severe penalties, including imprisonment, fines, and confiscation of assets obtained through the fraudulent activity.
Examples of fraud
- Investment fraud: Investment fraud occurs when a person or company makes false statements or misrepresents information to convince others to invest money in a scheme or product that does not exist or is not legitimate.
- Identity theft: Identity theft is a type of criminal offence that involves a person using someone else’s personal information, such as their name, social security number, or credit card details, to commit fraud or theft.
- Insurance fraud: Insurance fraud arises when a person submits false or exaggerated insurance claims, such as claiming for damage that did not occur or claiming for lost or stolen items that were never owned.
- Bank or mortgage fraud: This type of fraud occurs when a person intentionally deceives a bank or financial institution to obtain money, such as by creating fake bank accounts, forging documents, or stealing credit card details.
- Employment fraud: This type of fraud arises when person lies on their job application or CV to obtain a job.
- Charity fraud: A person or organisation may falsely represent themselves as a charity to solicit donations or funds from individuals or corporations; this is known as charity fraud.
- Cyber fraud: Cyber fraud is when a person uses the internet, email, or other digital means to commit fraud, such as phishing scams or malware attacks.
- Money laundering: Money laundering is a type of fraud and financial crime that involves concealing the true source, ownership, or destination of money or assets that have been obtained through illegal means. In other words, it is the process of making dirty money appear to be legitimate by passing it through a series of transactions.
- False accounting: False accounting is a type of financial fraud that involves deliberately falsifying or manipulating accounting records, such as financial statements, balance sheets, or income statements, with the intent to deceive others.
What is the role of fraud solicitors?
Fraud solicitors are legal professionals who specialise in handling cases related to fraud, financial crime, and other related offenses, providing expert advice and representation. Fraud solicitors can provide a range of legal services, including:
- Legal advice: Fraud solicitors can advise individuals or companies on the legal implications of fraud and financial crime, including the potential consequences and penalties of committing fraud. They also advise on strategies for defending against fraud allegations and the chances of a successful outcome.
- Fraud investigation: Fraud solicitors can investigate allegations of fraud or financial crime, including reviewing financial records, interviewing witnesses, and gathering evidence to build a case.
- Representation: Fraud solicitors can represent individuals or companies in court proceedings, including criminal trials, civil litigation, or regulatory investigations.
- Negotiation: Fraud solicitors can assist in investigations and prosecutions by negotiating with prosecutors, regulators, or other parties involved in a fraud case to secure the best possible outcome for their clients.
- Compliance: Fraud solicitors can help individuals or companies to ensure compliance with relevant laws and regulations related to fraud and financial crime, including developing compliance programs and conducting risk assessments.
Overall, fraud solicitors play a critical role in helping individuals and companies navigate the complex legal landscape of fraud and financial crime, and in defending against allegations of wrongdoing.
Funding a fraud case
Whether you are pursuing or defending a fraud case, legal costs can escalate quickly, so it is important that you are aware of your funding options. Funding a fraud case can be a complex process and will depend on the individual circumstances of the case. Listed below are some of the options for funding a fraud case, where some options will only be available in civil disputes and not private criminal prosecutions:
- Private funding: Individuals or companies may choose to pay for legal fees themselves, either by using their own resources or by borrowing money. This option can be expensive, and the costs can quickly mount up, particularly in complex fraud cases.
- Conditional fee agreements: Conditional fee agreements (CFAs), also known as “no win, no fee” agreements, are a type of funding arrangement that allows individuals or companies to pursue a fraud case without paying legal fees upfront. Under a CFA, the law firm agrees to take on the case and only charges a fee if the case is successful. If the case is unsuccessful, the client does not have to pay any legal fees.
- Contingency fee agreements: Some fraud solicitors may offer to take on a fraud case on a contingency fee basis, which means that they will only charge a fee if they are successful in securing a financial settlement or damages. The fee payable to the solicitor is usually a percentage of the amount recovered, and if the case is unsuccessful, the law firm will not charge a fee.
- Third-party litigation funding: In some cases, third-party litigation funders may be willing to provide funding for a fraud case in exchange for a percentage of any financial settlement or damages awarded. This option can be attractive for individuals or companies who cannot afford to pay for legal fees themselves but have a strong case.
- After the event insurance: After the event (ATE) insurance is a type of insurance that can provide cover for legal costs in the event that a case is unsuccessful. This option can be particularly useful in cases where the outcome is uncertain, and the costs of losing the case could be significant. ATE insurance is often used with contingency fee agreements and conditional fee agreements.
How can Annecto Legal assist?
Annecto Legal helps clients realise the value of their fraud cases. We work closely with litigation funders, insurers and fraud solicitors that seek alternatives to the traditional hourly rate funding model.
Unfortunately, because of the high costs of legal actions in the UK, we only assist in disputes which are valued at over £250,000, at the absolute minimum. We would like to be able to help on other claims, but we just don’t have access to any products that can assist on smaller matters I’m afraid.
Annecto Legal Ltd, 106 Kennedy Building, Murray Street, Manchester , M4 6HS
0800 612 6587