Week after week, a well-known Sunday newspaper published articles that said three men were responsible for illegal copycat ‘government’ websites. The men in question ran a series of websites offering ‘check and send’ services or ‘nested’ technology to help people complete government forms – for example, tax returns, European Health Insurance Card applications, Driver and Vehicle Licensing Agency documents, and applications for passports.
On the first page of their websites were very prominent comparison tables, which showed the different levels of service offered by their sites, compared with the equivalent government portal. The newspaper reported that they were acting illegally, so people began to believe this – and consumers who had, ostensibly, been happy with the service they had originally received began to complain.
The number of complaints was significant, although paled into insignificance alongside the number of people who had used the services without any dissatisfaction. Ironically, the same newspaper had also published an article extolling the virtues of one of the websites run by the trio, on the basis that it was far simpler to use than the government’s.
The three men had had their websites approved by trading standards authorities, the Advertising Standards Agency, HM Revenue and Customs, government officials and search-engine operators, such as Google, through which they advertised. In the course of dealing with these agencies, they cooperated to the letter.
However, because of the attritional quality of the complaints generated by the press coverage, the perception of a valid complaint emerged – which developed into the flagship National Trading Standards investigation Operation Cleo 2. As part of this operation, material was collated from all of the sites operated by the men, amounting to tens of thousands of pages of evidence. Almost all of this ended up being served as part of a prosecution. The investigation and the prosecution subsequently raised significant didactic points about forensic judgement.
Charges
It is crucial to assess what charges should be levelled against defendants to reflect the alleged criminality. In this case, the defendants were charged with conspiracy to defraud in circumstances where, on one level, there was insufficient reason to depart from statutory fraud or a statutory conspiracy.
The Attorney General’s guidelines prescribe when it is appropriate to charge conspiracy to defraud. In essence, it is rarely appropriate to do so. As has been recognised by the Law Commission, and cases such as R v Rimmington and R v Goldstein [2005] UKHL 63, conspiracy to defraud is a vestigial common law charge that should be reserved for cases where statutory fraud does not work, or where there are a number of ‘species’ of statutory fraud.
The practical importance is that it is more difficult to prove conspiracy to defraud. It is a more nebulous concept, and harder for a jury to understand. It allows focus on the issues in the case to be lost. When considering charges in a consumer case, thought should be given to charging offences under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).
In this case, the second charge was a conspiracy to defraud, referable to a breach of the Distance Selling Regulations. This meant there was a hybrid charge, infused with unnecessary complication and additional hurdles in terms of the mental element of the offence.
The preparation by the prosecution evolved in such a way that they said there would be a second trial, where the defendants would face CPR allegations after the fraud trial. However, that would have been unnecessary and a waste of public resources. Had there been any merit in the allegation, the case cried out for a straightforward statutory fraud charge for each website before the jury, with an alternative CPR allegation.
Evidence
In a case involving hundreds of consumers – hundreds of thousands if you count those who did not complain – it is inevitable that the investigation will generate a significant volume of material. When preparing a case, it is crucial to ensure that the evidence is stripped down so only material needed to prove the case – that is, material pertaining to the facts – is served. The remainder should be retained as unused material and disclosed only in accordance with the Criminal Procedure and Investigations Act (CPIA).
Whittling down the evidence to make the case manageable happened only after around 70,000 pages of evidence had been served. The case could probably have been presented by serving 5,000 – 10,000 pages. This had profound implications for the length and cost of the case. To manage the volume of evidence served, the prosecution instructed three junior barristers. Had the case been reduced to 10,000 pages, this would have been a two junior case.
Witnesses
In a case where a fraud is said to be demonstrable on the face of a document – in this case, a website – a consumer will simply add gloss to the facts, to explain how they were defrauded. This is only of secondary relevance to whether or not the alleged fraudster intended to act fraudulently.
Where tens of people have been defrauded through oral misrepresentations, different considerations apply. However, in cases allegedly involving fraud on the face of documents, it will almost invariably be possible to schedule the complainants’ evidence on the basis that – even if it is not accepted that they were defrauded – they might think they were. That subtle distinction will almost always avoid the need for calling many witnesses who say the same thing. In that way, it should be possible to call no more than about 15 witnesses to explain how they were defrauded.
The prosecution initially sought to call more than 100 consumers. They then resolved to only call a handful. By the time that decision had been made, the only way for those changes to be put into effect in a meaningful way was to adjourn the case, so that all parties could be ready for trial. The case had to be adjourned for a year.
Jury bundle
In any fraud, the jury bundle is a very important tool. The index itself is a critical document, as it can be agreed as an admission that will prove many of the essential components of the underlying evidence. It is important that the index is structured to include: the witness producing the document; where the witness works (for professional witnesses); the provenance of the document its date; and where it appears in the bundle.
The bundle should, in almost all cases, not exceed one lever arch file – that is, 400 pages. In an exceptional case, it might extend to two lever arch files. However, in this case, documents were uploaded onto iPads. Other evidential tools Some complex frauds warrant electronic presentation of evidence. The jury can be given important – but nonessential – documents electronically, so the paper jury bundle is kept small and focused.
Money movements can be illustrated graphically, so the jury can easily digest an overview of how the fraud operated. In a case involving website fraud, it will almost invariably be necessary and helpful for a jury to see a graphic representation of the way in which the site operated, both in terms of how it was coded and how it worked in practice for a consumer.
However, there has to be a good forensic reason for uploading documents onto an iPad. Often, the quality of the document, and how it appeared to the consumer, is lost. If evidence is being presented electronically, it is far better that the jury sees the same thing at the same time.
Trial management
Good trial management will be informed by getting the matters set out above correct from as early a stage as possible. In this case, there was no opening note, admissions or jury bundle at the start of the first trial listing, including after a jury had been sworn.
It is necessary to timetable prosecution and defence deadlines for dealing with issues that will impact on trial management, including: legal argument; admissions and schedules; objections to admissions and schedules; the opening note; witness requirements; and batting order.
Assisted by those directions and early identification of issues, it is always possible to streamline the presentation of a consumer fraud through cooperation between prosecution and defence. The parties are obliged to cooperate by virtue of the interplay of the directions timetabled, and the general obligation of cooperation imposed on all parties by Part 3 of the Criminal Procedure Rules.
If a draft jury bundle index, draft admissions, and a draft batting order are before the court, that will enable a proactive court to put its stamp on trial management in a way that will help both parties. Where the court is not proactive, it will enable the prosecution and defence to ensure the case includes only the necessary evidence and proceeds smoothly.
Conclusion
It is a common misconception that consumer frauds are complex and complicated. They are usually straightforward, albeit possibly substantial. If early thought is given to these cases in a methodical and considered way, forensic judgement can be used effectively to keep cases short and factually simple.
They can be presented with a minimum of evidence, without the fairness of proceedings being affected, and costs can be kept vastly lower than a case such as this, where tens of thousands of pages were served as evidence. In this instance, with adequate case management, they might have been retained as unused material.
