The simple answer is, it depends! Fraud can be considered both a criminal offense and a civil tort in New South Wales and Australia more broadly. In a criminal fraud case, the state’s attorney is responsible for prosecuting the case, aiming to hold the accused accountable. On the other hand, in a civil fraud case the defrauded individual brings forth a tort claim seeking legal remedies.
What is Fraud?
According to the Attorney General and his office, Fraud can be defined as the ‘dishonestly obtaining a benefit, or causing a loss, by deception or other means.’ Further specifics on the language can be seen in paragraph viii of the Fraud Control Policy
In New South Wales specifically, section 192E of the Crimes Act 1900 makes it an offence to dishonestly:
Obtain property belonging to another;
Obtain a financial advantage or cause a financial disadvantage.
Fraud as we know it can embody many forms. Some examples can be seen below :
False representation: Making false statements or misrepresenting material facts, such as property condition or financial information.
Forgery: Creating or altering documents, signatures, or records with the intent to deceive.
White collar crime: An example of which can be a Ponzi Scheme, which is an operating investment scheme that uses new investors’ funds to pay earlier investors, leading to collapse.
Insider Trading: Illegally trading securities based on non-public information, which could also be seen as an individual guilty of committing tax fraud.
Identity Theft: Assuming another person’s identity without consent as part of wider fraudulent activities
Bank Fraud: Deceptive practices to unlawfully obtain funds or assets from financial institutions.
Tax Fraud: Intentional evasion or falsification of information to avoid paying rightful taxes.
False Accounting: Misrepresenting financial records to unlawfully acquire property or assets.
Criminal Fraud
In a criminal case, alleged criminal fraud charges are addressed differently from those of civil fraud. The criminal justice system in Australia treats fraud as a serious offence, as it undermines the integrity of financial transactions and can have significant economic implications. As such, criminal proceedings are taken extremely seriously. Law enforcement agencies, such as state police forces and federal investigative bodies like the Australian Federal Police (AFP), actively investigate and prosecute cases of criminal fraud.
To establish criminal fraud, the burden of proof rests with the prosecution. They must demonstrate beyond a reasonable doubt that the accused intentionally engaged in deceptive conduct, with the knowledge of its fraudulent nature and the intention to deceive or defraud another person or entity. Convictions for criminal fraud can result in substantial penalties, including fines, imprisonment, or a combination of both. As noted by the Commonwealth Director of Public Prosecutions, violation can result in 10 years imprisonment.
However, several legal elements must also be proven by the prosecution. These include the accused’s dishonest conduct with the intention to gain a financial advantage or cause financial loss, engaging in deceptive behaviour, demonstrating specific intent to deceive or defraud, involvement in obtaining a financial advantage or causing financial loss, and establishing a causal connection between the accused’s actions and the resulting financial consequences. These elements collectively form the basis for establishing the offence of criminal fraud.
Civil Fraud
Civil fraud law in Australia encompasses legal principles and regulations that address fraudulent conduct in civil matters. It provides a framework for individuals or businesses who have been defrauded to seek remedies and recover their losses through civil litigation. Under civil fraud law, fraudulent conduct refers to intentional misrepresentation, deceit, or other dishonest acts that cause harm or financial loss to another party.
Establishing a Civil Claim
To establish a claim of civil fraud in Australia, the plaintiff (the defrauded party) typically needs to prove several elements. It is important to note that a civil claim is brought by a private party and not the public prosecution service. These elements include demonstrating that the defendant made false statements or engaged in deceptive conduct, that the false statements were material and relied upon by the plaintiff, and that the plaintiff suffered harm or financial loss as a direct result of the fraudulent conduct.
Once a claim of civil fraud is established, the court may provide various remedies to the defrauded party. These remedies may include compensatory damages, which aim to restore the plaintiff to the position they would have been in had the fraud not occurred. The damages awarded may cover direct losses, consequential damages, and potentially punitive damages in cases of particularly egregious conduct.
Civil Jurisdiction
Civil cases in Australia are typically pursued in magistrates court or a crown court state or federal courts, depending on the jurisdiction and the nature of the fraud. The legal proceedings involve presenting evidence, witness testimonies, and legal arguments to support the plaintiff’s claim of fraud. It is essential for the plaintiff to be able to demonstrate, on the balance of probabilities, that the defendant committed the fraudulent act.
The civil fraud law in Australia serves to protect the rights of individuals and businesses, deter fraudulent activities, and provide a mechanism for redress when fraud occurs. It ensures that those who engage in fraudulent conduct are held accountable for their actions and that victims of fraud have a legal avenue to seek justice and compensation.
Burden of Proof in Civil and Criminal Fraud
Burden and Standard of Proof in Criminal Law System
In the realm of criminal law, the standard of proof revolves around the concept of “reasonable doubt.” The prosecution bears the burden of proving the guilt of the accused beyond a reasonable doubt, leaving no reasonable uncertainty in the mind of an impartial person. This standard of proof is intentionally set high, considering that criminal cases often entail severe penalties.
Failure to meet this high threshold results in the acquittal of the accused. However, the notion of “reasonable doubt” itself can be subjective, varying with the circumstances at hand. The jury, in each specific case, determines what doubts are reasonable within the context. Hence, seeking guidance from a legal professional is crucial, as they can provide insights tailored to your particular circumstances. Reach out to one of our experienced criminal lawyers at Jameson Law for a complimentary consultation.
Burden and Standard of Proof in Civil Law System
In the civil law system of Australia, the burden of proof lies with the plaintiff or claimant. However, the standard of proof differs from that in criminal cases. In civil law, the plaintiff must establish their case on the balance of probabilities, meaning it is more likely than not that their claim is true. This standard is lower compared to the “beyond a reasonable doubt” standard required in criminal proceedings. The burden of proof rests on the party making the claim in civil cases, who must present evidence supporting their case. Failure to meet this burden may result in the dismissal of their claim.
