Calling time on benefit fraud

Money iStock 000008683901XSmall 146x219Ian de Prez analyses a particular problem that can arise in some of the benefit fraud cases which inevitably form part of the caseload of a prosecuting lawyer working for a District or Unitary Council.

The Problem

Benefit frauds can easily lie undetected for some considerable time without any negligence on the part of the authorities. Once an investigation has started –perhaps as a result of anonymous information or a data matching reference from another public body –it may not be straightforward, nor will it be immune from the resource issues currently affecting local authorities. Information from financial institutions, employers or utility companies may be needed. Surveillance might have to be carried out. After the evidence has been gathered, a prospective defendant will be invited to an interview under caution, which may be postponed or interrupted by the need to obtain legal advice, or explanations may be offered which require more investigation and another interview.

For these reasons, early or strictly interpreted time limits can be problematic for a prosecutor.

Time limits and Policy

Recognising that the straightforward time limit of 6 months which usually applies to summary offences would not be in the interests of justice, Section 116 of the Social Securtity Administration Act 1992 provides a longer and more flexible time frame. As the case law discussed in this article shows, this concession is not unique to social security law; there are similar provisions relating to road traffic, computer misuse and animal welfare.

A prosecution for a summary offence may be commenced within the period of 3 months from the date on which evidence sufficient in the opinion of the appropriate authority to justify a prosecution for the offence comes to the authority’s knowledge or within a period of 12 months from the commission of the offence whichever period last expires. Sub-section (3) adds that a certificate of the appropriate authority as to the date on which such evidence ……came to the authority’s knowledge shall be conclusive evidence of that date.

There is no time limit restricting the use of the either way offences created by this act ( which differ from the summary offences in having the word dishonesty added) although of course serious delay might lead to a case being stayed as an abuse of process

In March 2011, the Department of Work and Pensions (DWP) with whom local authority prosecutors often work in partnership, issued Housing and Council Tax Benefit Circular F1 /2011 setting out its policy, driven by the need to secure financial efficiency, of only making use of the summary offences, unless the overpayment exceeds £20,000 or exceptional circumstances exist. This resulted in an increased number of requests to prosecuting lawyers and other authorised officers for certificates under Section 116(3) to be signed. Now, following the Attorney General’s recent announcement, the CPS is in the process of taking over DWP prosecutions. It remains to be seen whether this will result in any further change of policy, or in the mode of co-operation between benefit paying bodies.

Whatever changes follow, it will often be advisable to use the summary offences if they are available. The correct application of Section 116 is therefore crucial- and unfortunately not always easy. (The Theft Act 1968, Fraud Act 2006 or the Forgery and Counterfeiting Act 1981 can provide other options for a prosecutor, but the tailor-made offences created by Sections 111A and 112 of the Social Security Administration Act 1992 are usually the most obvious and appropriate to pursue.)

Case Law

Circular F1/2011 helpfully incorporates the transcript of Azzam v Epping Forest District Council [ 2009] EWHC 3177 (Admin) in which Cranston J analysed a “quartet ” of earlier cases; R v Haringey Magistrates Court ex parte Amvrosiou (1996) EWHC 14( Admin), Morgans v DPP (1999) 1 WLR 968, Eyeson v Milton Keynes Council [2005] EWHC 1160 and Burwell v DPP [2009] 173 J.P.L. 351; 2009 Crim. L.R. 897. RSPCA v Johnson [2009] EWHC 2702 which is not mentioned in the Circular, was decided only two days after Azzam. The Court of Appeal in Johnson was aware of Azzam but only had access to a Lawtel summary.

These cases show the courts struggling to reconcile conflicting principles and not always giving a consistent line of guidance. In Amvrosiou the court referred to the need to achieve “certainty both for the prosecutor and the defendant and to prevent what would otherwise be an exercise in discovery of the prosecution process” which it was judged would create “an intolerable burden to the prosecution and a cog in the wheels of justice’’, but in Morgans it is asserted that the extended period of time, being an exception to the normal rule, must be strictly construed to avoid unfairness to a defendant.

Apparent inconsistencies can sometimes be explained by the fact that there have been two distinct if overlapping questions to be answered, depending of the facts of each case;

  1. To what extent are prosecutors’ certificates conclusive or how far should the court investigate the soundness of a prosecutor’s decision to issue the certificate?
  2. More broadly, how is a decision to be made as to the date on which sufficient evidence came to the attention prosecuting authority?

Are Certificates conclusive?

In both of the most recent cases, Azzam and Johnson, the court, following Amvrosiou, came down on the side of finality, holding that a certificate will be conclusive unless it is ‘’ inaccurate on its face or shown to be fraudulent ‘’. The word “inaccurate’” in this context means “plainly even if honestly wrong” or “patently misleading”. The certificate can still be challenged by means of judicial review or attacked as an abuse of process during the criminal proceedings themselves. In the latter case, the court will look for some kind of trickery or manipulation of the process before being minded to give relief to a defendant.

In these three cases where there was a valid certificate, the court was reluctant to impugn the prosecutor’s decision to issue it, given the high threshold that a claimant alleging irrationality or abuse of process has to overcome. However in cases like Eyeson, where no certificate was before the court, or Burwell where it was defective, the court will analyse the chain of facts more rigorously and make its own determination as to the date when it can fairly be said that sufficient evidence had come to the attention of the prosecutor. So, the delay counted against the prosecutor in Eyeson, despite it being understandable, but in Johnston the defendant who argued abuse of process was not allowed to rely on the prosecutor’s delay because he had caused it by evading enquiries.

A prosecutor’s decision

We may be reassured by the fact that a certificate once issued is unlikely to be quashed by the court, but that does not give us all of the assistance we need in deciding whether to issue one in the first place.

Eyeson establishes the principle that section 116 only encompasses the evidential test. Additional time spent gathering information relevant only to determining whether it is in the public interest to prosecute must be discounted. This case also illustrates a more difficult hurdle for prosecutors. The information in Eyeson was laid in September 2003, but documentary evidence sufficient to justify a prosecution had been available to the Council by the previous February. The magistrates allowed the case to proceed under the three-month rule because the delay between February and September was understandable given the Council’s attempts to interview the defendant before deciding to prosecute her. As the Divisional Court said, this was an error of law because that is not the correct statutory test. The magistrates’ error was prompted by a sound instinct, since a fair-minded person would expect that once a hidden fraud has come to light, a prosecutor should have a reasonable time to investigate it thoroughly and assess the evidence. The problem is that Section 116 does not refer to the reasonable length of an investigation but rather to the moment in time when the prosecutor judges that evidence sufficient to prosecute exists. A conscientious investigator will explore all relevant avenues and check facts before passing the file to a lawyer. What if some lines of enquiry turn out to be fruitless? If this occurs towards the end of the investigation, the prosecution may be based on evidence that came to light more than three months before its commencement.

The lawfulness of counting extra time to assess evidence or bring the matter to the attention of a decision maker has also been contentious. In Morgans it was held that the reference to evidence in section 116 is merely descriptive; the prosecutor does not have to form an opinion before time begins to run. This would have meant that time started to run on the working day that the last essential item of evidence entered the Council offices, or came to the attention of an employee.

If these principles had become the settled view of the law, prosecutors would have found themselves complying with a decision-making framework which was restrictive, but had the merit of simplicity. An advocate of defendant’s rights might say that this interpretation still leaves the prosecutor with three months in which to undertake possibly unproductive lines of enquiry and assess the evidence and the requirements of the public interest. However would that always be in the public interest and was it what Parliament intended? The interpretation of Section 116 that we are left with after an examination of all of the authorities is in fact more flexible.

Eyeson is not as clear-cut in the guidance that it provides as first appears. Moses LJ said that the prosecutor might have avoided its difficulty by placing a certificate before the court adding: “I am prepared to accept that the Council might have taken the view, it being dependent upon their opinion, that despite documentary evidence sufficient to justify the prosecution, they needed more in order to establish or prove the knowledge of the appellant for the purposes of section (1A) (c).”

This statement seems illogical at first sight. No doubt the prosecutor would have liked to have further evidence in the form of admissions, but it was not forthcoming. I suggest that this conundrum can be resolved in the following way. It would be wrong, even in the simplest of benefit fraud cases, not to seek an interview under caution. Moses LJ's comments about the importance of a defendant’s knowledge are now even more apposite following Coventry City Council v Vassell [2011] EWHC 1542 (Admin). On the date when the prosecutor in Eyeson gave up attempting to interview the defendant, it had at least established that she refused to be interviewed, or to supply an explanation by any other means. It would not be unreasonable to weigh this fact in assessing the probable response of a court to the case as a whole. I suggest that this argument does not conflict with a proper understanding of a defendant’s right to silence and its evidential consequences.  

The court in Azzam stated that the prosecutor is entitled to a ‘’margin of judgment’’. In that case that margin was sufficient to deal with a short but crucial delay.

Furthermore, in Johnson, Pill LJ moderates the strictness of Morgans: “There is no principle of law that knowledge in a prosecutor begins immediately any employee of that prosecutor has the relevant knowledge….It is right that prosecutors are not entitled to shuffle papers between officers or sit on information so as to extend the time-limit. There is, however, a degree of judgment involved in bringing a prosecution and knowledge in my judgment involves an opportunity for those with appropriate skills to consider whether there is sufficient information to justify a prosecution.”

With all of this in mind how is a fair-minded prosecutor to approach the task?

Suggested approach

  1. Is a certificate necessary or can we use the 12-month rule? A false statement offence is committed on the date that the statement is made, usually the date when the relevant document was completed. Where a series of incorrect forms have been submitted at intervals over a number of years, some of the earlier offences may be outside the summary time limit unless the certificate provision can be utilized. However, if the mischief is an undeclared change of circumstance Smith v North Somerset Council (2007) 171 J.P. 509 establishes that this is a continuing offence; section 112 refers to a failure to give prompt notification to the benefit paying body, but, when no notification is given, promptness is irrelevant. Time will not usually start to run until irregular benefit payments stop.
  2. What are the essential elements of the offence? Following R v Passmore [2007] EWCA Crim 2053, [2008]1 Cr. App R 12 we know that in a change of circumstances case no offence is committed unless the change actually affected the claimant’s entitlement to benefits. The precise calculation of an overpayment, which is often done at a late stage in investigations, is in those cases a necessary piece of evidence and so, if the three month time limit must be relied upon, the date in the certificate can properly take this into account.
  3. Given Pill LJ’s comments, the way in which a council’s Scheme of Delegation provides for prosecuting decisions to be made is crucial. Many schemes require that a final decision to prosecute must be made by or with the agreement of a legal officer. Every case will be fact specific and we should take care not to exploit either the margin of judgment or Pill LJ’s reference to realistic decision-making processes. But it will often be fair and lawful for the date in a certificate to allow for a short but realistic timeframe after the conclusion of an efficient investigation, even if that investigation has included some evidential dead ends. However, it is suggested that prosecutors look out for cases where an earlier date is called as well as being alert to any unfairness caused by long delays in either the investigative process or in the referral of files for legal advice.

Ian de Prez is a Solicitor Advocate at Suffolk Coastal District Council. He may be contacted on 01394 44692 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..