Are We There Yet? The Fraud Strategy and the Independent Review of Disclosure and Fraud Offences

The Independent Review into disclosure and fraud offences promised as part of the government’s May 2023 Fraud Strategy has now published its preliminary findings in the disclosure aspect of the investigation.

The independent review is due to examine the disclosure regime in the context of the ‘digital age’ and challenges in the investigation and prosecution of modern fraud.

The Fraud Strategy

The review proposed by the government’s published fraud strategy promises a “full evaluation of the entire lifecycle of a fraud case” and to “conduct a new independent review into the challenges of investigating and prosecuting fraud, considering:

• Modernising the disclosure regime for cases with large volumes of digital evidence.
• Whether fraud offences and the Fraud Act 2006 meet the challenges of modern fraud, including whether penalties still fit the crime.
• Creating civil orders and penalties to prevent fraudsters reoffending.
• Making it easier for individuals to inform on associates in criminal fraud networks.”

It is said that the independent review will also consider if the Fraud Act 2006 can be updated to increase the number of fraud cases that are heard by Magistrates’ Courts, with a particular focus on improving the disclosure regime.

A great deal of the published strategy is dedicated to emphasising the government’s commitment to focusing upon fraud, and in particular the increased resources that will be provided to enforcement agencies alongside a “new state-of-the-art national fraud and cyber crime reporting service”. However, it appears that the promised boost of resources is aimed largely at law enforcement agencies as opposed to courts, prisons and the wider criminal justice system.

Whilst the paper stresses extensively the impact of fraud and the need for action, little airtime is given to the inevitable accompanying need for a significant and sustained increase in funding to courts and the criminal justice system. A comparatively brief acknowledgment of the present backlog in the latter part of the strategy is followed by a pledge to recruit more judges and the construction of City of London Law Courts scheduled to open in 2026.

In particular, claims that the strategy will “put more fraudsters behind bars” and that justice will be “[brought] more often and quicker” seem particularly shaky as chaos in courts and prisons reached new heights earlier this month with the commencement of “Operation Early Dawn”, a response to the prison capacity crisis which saw further delays and confusion caused in courts across the country as a result of Defendants being ‘triaged’ before transfer to court, with those not deemed high priority to be released on police bail. Practitioners and others involved in criminal cases are meanwhile left in the dark as to whether Defendants will be brought to court.

The Independent Review of Disclosure and Fraud Offences: Preliminary Findings

The independent review – the first of its kind since 1986 – began in October 2023. The review intends to provide recommendations to expedite fraud investigations and prosecutions, with a focus on disclosure.

The review is to be in two parts. Part one, disclosure, covers all types of crime including fraud, with a focus on cases with large amounts of digital material, as is common in fraud cases. Part 2 seeks to examine the issues involved in investigating and prosecuting fraud offences, including consideration of current penalties and powers to “meet the challenges of modern fraud, including whether penalties fit the crime, and investigate the scope of existing civil powers”.

The review’s ‘Preliminary Findings and Direction of Travel’ document in respect of part one, disclosure, was published last month. Some of the key topics addressed are as follows.

The paper begins with an acknowledgement that “timely disclosure of relevant unused material by the prosecution to the defence is integral to a Defendant’s right to a fair trial”, referencing the part played by non-disclosure in the recently overturned conviction of Andy Malkinson, as well as potentially in the miscarriages of justice in the Post Office scandal, currently subject to the ongoing public inquiry.

The review notes the “exponential rise in digital material” in criminal cases and the importance of a disclosure regime able to handle such large quantities of material, noting that the average SFO case contains around 5 million documents – the largest having 48 million documents. 

“The proliferation of digital material and the progressively complex nature of offending in both volume and serious crime means that disclosure is an increasingly time and resource intensive process for all parties, which has had the impact of slowing down case progression in the criminal courts. This is acutely felt in the prosecution of ‘dislcosure heavy’ crime types such as fraud and also rape and serious sexual offences cases (RASSO) where digital evidence is frequently found.”

It notes that there are clearly problems arising in the practical application of the disclosure regime and raises concerns as to a lack of consistency.

The report outlines a number of topics to be considered within the final report, including: consideration of whether defence should be provided access to material in bulk format and consideration of the limitations on publicly funded firms to review these, consideration of how artificial intelligence might be to support disclosure processes – such as assistance with scheduling, and consideration of proposals as to timetabling and dedicated disclosure hearings, sanctions, and a greater focus upon disclosure issues at the PTPH

In respect of Magistrates’ courts, the report states:

“failings are cited on all sides including investigators, prosecutors and the defence. I am considering if there needs to be a different approach and perhaps a bespoke solution for managing disclosure in the magistrates’ courts and I will deal with this matter in my final report… one approach might be to populate the template form in the annex to the code of practice with a list of prescribed items which would be required to be disclosed in all cases.”

It is worth noting that a major barrier to effective progress in the Magistrates’ courts not yet touched upon by the review is the Common Platform system. The system is far too often down and accessing case material, if it has been uploaded at all, is far more difficult than in the better equipped Crown Court Digital Case System. Unused material is not uploaded to the Common Platform as it is with the Digital Case System, nor is there a parallel system whereby advocates can provide contact details such that effective discussions as to disclosure and any other outstanding issues can take place.

The report is, however, highly conscious that it operates within a context of limited public funds and the limited resources of those acting within the system.

Final recommendations in respect of the disclosure aspect of the review are expected to be published later this summer, with recommendations in respect of fraud offences expected to be published in spring 2025.

Links
Fraud Strategy
Independent Review of Disclosure and Fraud Offences: preliminary findings