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Home , Delict (Scots law), Prescribed sum, Uttering

in AN INTRODUCTION TO UK LEGISLATION | JULY 2020 | FOURTH EDITION The way in which criminal fraud is defined, investigated and prosecuted differs across the UK. This guide explains how fraud is usually dealt with under the criminal law in Scotland.

OVERVIEW OF THE LAW Uttering • Food Safety Act 1990 (labelling and substandard food); In Scotland criminal fraud is mainly The of ‘uttering’ occurs when dealt with under the and someone tenders ‘as genuine’ a forged • and Counterfeiting Act 1981 a number of statutory offences. The document to the prejudice of another (counterfeiting of bank notes and main offences are: person. Forging a document only coins); becomes a crime if it is shown to have • Insolvency Act 1986; and • common law fraud; been tendered (to an individual or the • uttering; public at large) with an to • Weights and Measures Act 1985. defraud/cause someone prejudice. • embezzlement; and If you are ever in doubt about whether In many cases, uttering and fraud conduct falls within the scope of the • statutory . are interchangeable offences that legislation, always seek appropriate It is important to note that the Fraud can equally apply to the same legal advice. Act 2006 does not apply in Scotland. circumstances, but prosecutors tend to proceed with an uttering charge if a WHEN IS AN OFFENCE forged document is used. CIVIL FRAUD COMMITTED? Embezzlement Fraud can also feature in a civil Common law fraud Embezzlement is the dishonest context as a (the appropriation of property without equivalent of ) allowing recovery Common law fraud is the common the of the owner where the of loss, for example where a party ‘catch all’ for most fraud prosecutions appropriation is by a person who has is induced to enter into a in Scotland. received a limited ownership of the through fraudulent misrepresentation. As with criminal fraud, the false Fraud is committed when someone property, subject to restoration at a future time, or of property statement must be made with the achieves a practical result by the relevant intention; however, unlike means of an intentional false pretence subject to liability to account for it to the owner. for the crime of fraud, or dishonest misrepresentation. In or can be sufficient for other words, where a deliberate There is an element of breach of trust civil fraud if the person making the is used to cause someone in embezzlement, making it more representation does not positively to do something they would not serious than simple . In most know the statement to be true. otherwise have done. There must cases embezzlement involves the be a causal connection between the appropriation of money. deception and the practical result. Statutory frauds The range of false pretences observed REPORTING CONCERNS in Scottish courts is incredibly In addition there is a wide range of Allegations of fraud can be reported wide, from outright lies to implied statutory offences which are closely to Police Scotland by calling 101. For representations or suggestions of related to the . UK-wide frauds, a report can be made something which was untrue, including The main examples can be found in the to Police Scotland or to Action Fraud silence as to the truth in certain following statutes: (the UK’s national reporting centre for circumstances. An omission can be • Bankruptcy (Scotland) Act 2016; fraud and ). sufficient if the accused is under a duty to make a representation. • Business Protection from Misleading Generally there is no obligation on Marketing Regulations 2008; anyone to report a suspected crime The false pretence must have a in Scotland. However, the Criminal ‘practical result’. Any practical result • ; Justice and Licensing (Scotland) will suffice. There is no minimum Act 2010 requires a person (or a • Computer Misuse Act 1990; requirement of loss for the offence, nor company) who knows or suspects is there any need for the perpetrator to • Consumer Protection from Unfair (where that knowledge or suspicion have gained as a consequence. Trading Regulations 2008; originates from information obtained in If the practical result is not achieved the course of employment or business, • Criminal Justice and Licensing or from a close personal relationship) there may be a prosecution for (Scotland) Act 2010 (articles for use attempted fraud. that another person is involved in in frauds); serious organised crime to report this • Financial Services and Markets Act to Police Scotland. Failure to do so is 2000 (to protect investors); an offence. Serious organised crime is defined as MAIN FEATURES a crime involving two or more persons acting together for the principal purpose Criminal offences Common law fraud of committing or conspiring to commit Uttering one or more serious offences. Certain Embezzlement acts of fraud may meet this definition. Other statutory frauds If you are the victim of fraud in the Reporting fraud Police Scotland course of business or receive or acquire information in the course of business Investigating authorities Police Scotland that leads you to know or suspect that (main) another person is or has been involved Prosecuting authorities Crown Office and Service in fraud, you should seek professional (main) legal advice to assist you in determining whether you are required to make a Sentencing report to the police. Summary conviction Up to 12 months imprisonment or a fine up to the prescribed sum or both

INVESTIGATING FRAUD Conviction on indictment Up to life imprisonment or unlimited fine or both Frauds committed in Scotland are usually investigated by Police Scotland, which has regional specialist units within of investigating a serious or complex benefit obtained from their criminal its Specialist Crime Division to deal with fraud which is prosecutable in England, conduct. Sums recovered are then paid complex economic crime cases. Wales or Northern Ireland. It also works into the Scottish Consolidated Fund. with Scottish authorities in relation to Serious and complex fraud and other It is important to note that where UK-wide fraud. economic are investigated under insufficient exists to the direction of the Economic Crime PENALTIES AND COMPENSATION commence a criminal prosecution, a Unit, part of the Serious Organised case may be referred to the Scottish Crime Division of the Crown Office and Cases are heard by a , a Sheriff Government’s Civil Recovery Unit for Procurator Fiscal Service (COPFS), and jury, or in the High Court. legal action to be taken to recover the which is Scotland’s prosecution service. proceeds of crime through civil recovery. In these cases the Lord (the • A summary complaint is used for less- ministerial head of the COPFS) may serious crime and is heard by a Sheriff PRACTICAL DIFFERENCES TO exercise powers under ss27 and 28 sitting without a jury. The maximum of the Criminal Law (Consolidation) penalty on conviction is imprisonment OTHER PARTS OF THE UK (Scotland) Act 1995 to authorise a for up to 12 months and/or a fine One important difference in criminal law nominated investigator to compel the up to the ‘prescribed sum’, which is between England and Scotland is that production of documents and to require currently £10,000. Scottish courts require ‘corroboration’ a person to answer questions and to • An indictment is used for more of evidence (that is, two independent provide information. These powers are serious crimes. The case will proceed sources of evidence pointing to the similar to the Serious Fraud Office’s s2 either with a Sheriff (lower-level crime having been committed). In powers. judge) and jury or in the High Court. most fraud cases this is unlikely to make a practical difference, and in For UK-wide frauds, both the If a prosecution is successful, the both jurisdictions businesses should English, Scottish and/or Northern maximum penalty at Sheriff and seek to identify and retain as much Irish authorities will have concurrent jury level is an unlimited fine and/ information as they can in order to assist jurisdiction and it will very much depend or imprisonment of up to five years a successful prosecution. on the nature of the crime and the level subject to any wider power granted of local involvement as to who leads the by statute for particular offences. investigation. In addition, following conviction in FURTHER INFORMATION the Sheriff Court, the Sheriff may See the resources section of PROSECUTING FRAUD remit the case to the High Court for our website. sentencing should the Sheriff consider The sole prosecuting authority is the their powers of sentencing to be COPFS. Most fraud prosecutions are inadequate for the crime committed. This helpsheet was kindly reviewed dealt with by the local Procurator Fiscal The maximum penalty at the High and updated by Tom Stocker and who has a duty to consider the evidence Court is an unlimited fine and/or Alistair Wood at Pinsent Masons LLP. available to them and make further life imprisonment subject to any enquiries as necessary. They may choose restrictions imposed by statute. to pass any crimes considered serious enough onto the Economic Crime Unit, The Court can order the convicted which has primary responsibility for the person to pay compensation to the investigation and prosecution of serious victim under the fraud and economic crimes. (Scotland) Act 1995. The SFO does not have jurisdiction The Court can also use its powers under to prosecute in Scotland, although its the Proceeds of Crime Act 2002 to powers under s2 of the Criminal Justice confiscate from the convicted person Act 1987 may be used for the purpose a fixed sum of money relating to the

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