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What is conspiracy to commit Insurance Fraud?

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Insurance fraud is a common offence that, surprisingly, many people do not take altogether seriously. All types of fraud are, however, a serious criminal offence. If you are convicted of fraud, you could face jail time. Conspiracy offences tend to be more serious due to the level of planning and premeditation involved, which differentiates them from opportunistic offences. Therefore, if you have been charged with conspiracy to commit insurance fraud, make sure you are well prepared for the trial against you. Understanding more about the legal elements of your case will help you to understand the prosecution’s case, and whether there are any defences available to you. Read on for an explanation of insurance fraud, and the law behind the charge of conspiracy.

What is insurance fraud?

The Fraud Act 2006 sets out different offences of fraud. The most common offences which relate to insurance fraud are:

Fraud by false representation involves dishonestly making a verbal or written statement that you know to be untrue and misleading. For example, say you make a claim to an insurance company in relation to a break in at your house. You claim that your laptop was stolen whereas in fact it was not, and you are aware of this. Your assertion that the laptop was taken would amount to a false representation.

Insurance fraud can also be committed by failing to disclose information that you are legally required to give to your insurer. Say your insurer asks you if there is any pre-existing damage to your car. You say that the car is in perfect working order however in fact you are aware of a problem with the brakes. This would be a false representation.

It would also be a case of failing to disclose information that you are obliged to disclose. A similar example could relate to health insurance; you could be asked if you have any existing health conditions. If you are aware of terminal illness that you dishonestly fail to disclose, you are probably committing insurance fraud.

What is a conspiracy in law?

Conspiracy to commit insurance fraud will usually involve something more than a one-off false statement, or the failure to disclose a singular piece of information. A conspiracy is a plan or agreement to commit a criminal offence, or offences. Where an insurance fraud is planned by two or more persons, it could be charged either under the law of statutory conspiracy or under common law conspiracy.

Statutory conspiracy

Statutory conspiracy is established by Section 1 of the Criminal Law Act 1977 (CLA). Where two or more persons plan to commit a statutory criminal offence, even where the offence itself is not actually committed, the individuals involved can be prosecuted for the act of planning under this provision. If you and another or others have planned to commit an insurance related offence under the Fraud Act 2006, such as fraud by false representation, or fraud by failure to disclose legally required information, you could be charged with conspiracy pursuant to the CLA.

In order to successfully bring a charge of conspiracy, the prosecution will need to prove beyond reasonable doubt that:

  1. You made a plan with at least one other person to pursue a criminal course of conduct or to pursue a course of conduct that would have amounted to the commission of a criminal offence, but for the existence of facts that would have made it impossible for the offence to have actually been committed.
  2. Where the conspiracy involved you and only one other person, the person that you made the plan with was not your spouse, a child under the age of 10, or the intended victim of your criminal offence.
  3. If you made the conspiracy with two or more persons, this must include persons other than a child under 10, your spouse or the victim. For example, you cannot be charged with conspiracy concerning a plan made with your spouse and two young children under 10. However, you could be charged with conspiracy for a plan made with your adult brother, and your nephew, even if your nephew was 9 years old.

The use of the common law offence conspiracy to defraud in insurance fraud cases

If you have planned to commit insurance fraud with others, you might also be prosecuted under the common law offence of conspiracy to defraud.

A common law offence is one that is not written out in statute. Instead, it has been developed over the years by the courts. When the Fraud Act 2006 was introduced, many people expected the old common law offence of conspiracy to defraud to be abolished. Instead, it was retained to capture situations that fall outside of the remit of the legislation.

Government guidance suggests that the use of the conspiracy to defraud charge will be reserved for complex frauds involving a variety of different types of offences. This is likely to refer to cases of organised crime, rather than a one-off offence. Cases that involve a combination of crimes against corporate entities such as insurance companies as well as individuals are more likely to attract the charge of conspiracy to defraud.

Also, insurance fraud may be prosecuted under this common law offence where the persons involved in the conspiracy are different individuals to the person who actually commits the fraud offence or where the person accused of the conspiracy only had partial knowledge of the fraud offence which was to be perpetrated.

What happens if you commit insurance fraud?

Insurance fraud could be investigated by the police. In more serious cases, it could also be investigated by the Serious Fraud Office or by the National Crime Agency. These law enforcement organisations work closely with the fraud departments in banks and insurance companies in cases of suspected fraud. You could become aware that there is a potential case against you at the time that you are arrested. Alternatively, you may be asked to attend a voluntary interview. If you are invited to a voluntary interview, whilst you are not legally required to attend, you should not ignore the letter.  At this stage, it would be advisable to obtain legal advice. Depending on the circumstances, there are pros and cons to cooperating and providing information at a voluntary interview.

Once law enforcement has completed their investigation, a charging decision will be made in your case. If you are charged, you will have to appear at the Magistrates’ Court for your first appearance. From there your case may remain in the Magistrates’ Court. Alternatively, it could be transferred to the Crown Court in more serious cases where the Magistrates’ Court’s sentencing powers are inadequate, or where the case is complex.

Where the District Judge in the Magistrates’ Court determines that s/he can hear the case, it will then be up to you to decide whether you would like your case to continue in the Magistrates’ Court or if it should be moved to the Crown Court, where it will be heard before a jury. This is a decision that you should discuss with your criminal defence solicitor.

What is the sentence for conspiracy to commit insurance fraud?

The maximum sentence for conspiracy to commit insurance fraud is a 10-year custodial sentence. That said, only the most serious cases will result in a decade of imprisonment.  Less serious cases could result in a fine or community level order.

When deciding the appropriate sentence, the court will consider the defendant’s culpability and the harm caused by the offence. For conspiracy charges, your level of culpability will depend on whether you adopted a leading role in making the plan, or whether you were forced, pressured or persuaded to become involved by others.

The level of harm will be principally determined by the value of the fraud, or what the cost would be if the fraud had actually been carried out. However, if you targeted vulnerable victims, this will also be taken to increase the level of harm caused by the offence or intended offence. These factors will produce your sentence starting point. From there, the court will increase or reduce your sentence to accord with aggravating or mitigating factors relevant to your personal circumstances.

For example, if you are a first-time offender, and you have three young children relying upon your financial support this would be important information to include in your plea in mitigation. On the other hand, if you have previously committed similar offences, the court is required by law to consider this as an aggravating factor which would increase the severity of your sentence.

Where to get further help?

If you have been accused of insurance fraud, instruct a criminal defence solicitor who is willing to put in the time to help you get the best possible outcome. At Stuart Miller Solicitors, our skilled team of solicitors are experts in white collar crime. Whether you are facing a fine or a hefty prison sentence, we understand how stressful the experience can be and we are here to help. Contact us today.

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