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Fraud Defence in Financial Crime - What is the right approach?

4 January 2022
General Fraud

What characterises a good fraud defence approach?

There is no single answer to the question of good preparation in fraud cases. The set of different resources and skills required is closer to the workings of a combination lock than a single key. Some of the fundamentals that a client might expect of his or her financial crime solicitor are set out below:

Knowing and explaining the law and procedure

The law of fraud and financial crime has seen significant developments in recent years. A client should expect that his team is at ease with the detail of the Fraud Act, the definitive fraud sentencing guidelines, and of course previous legal decisions affecting both. However, the client in a fraud case must have specialist financial crime solicitors who know how to take the legal jargon and explain it in plain English. Most fraud clients are capable of understanding the procedural and legal aspects of what they are going through if they have lawyers who can communicate clearly. Lawyers need to keep things simple and trust in the intelligence of the client.

Understanding the basics of business

A frequent criticism of lawyers by business clients is that they can be obsessed with strict legal interpretations, without even considering the business context. Many lawyers, of course, have no real experience of commercial life outside the law.

Some of the business basics that good financial crime solicitors will have at least an understanding of include:

  • Company law/structures including the structures of companies, shareholders, directorships etc.

  • Management roles differentiating management roles, including executive, financial, and operational roles.

  • Tax the basic rules on VAT, CIS, capital gains, income tax.

  • Cash flow, wealth, capital, outgoings, and revenue.

  • Banking - understanding how banks and other lenders behave, both in day to day practice, and in the operation of business financing.

  • Financial products/instruments and practices, e.g. derivatives, debentures, mortgages, bonds, share dealing procedures etc.

  • Regulation - the involvement of and responsibilities to agencies such as the FSA in regulation parallel to criminal proceedings.

Thinking like the prosecution

In financial crime cases, thinking like the prosecution does not mean accepting what the prosecution say. Far from it. By understanding what approach the prosecution are taking, the defence can better prepare a strategy designed to wrong-foot that approach.

If the investigators and prosecutors are inappropriately aggressive and negative in the interviews and pre-trial exchanges, that might present an opportunity to present a more attractive and positive case in the trial. The interviews often also point to areas that come up later in cross-examination, and provide clues as to what questions the client will face in court. The prosecution may be outflanked if the defence strategy takes advance warning of the prosecution approach and takes a different route.

Document management and a thorough grasp of the material

Fraud cases often contain thousands of pages of information which must be read, analysed, compared with other material, and summarised so that the most important aspects of a case are accessible in seconds if necessary. This could even prove necessary in real-time during an opposing barrister's cross-examination or during a legal argument in front of a judge. Specialist financial crime solicitors will understand how to work through these large volumes of material in an effective way and be able to direct the client to important documents which require their comment.

How much time should a lawyer spend with a client in a fraud case?

For a court to find a client not guilty, the barrister must know how to present the defendant to the jury, and this is easiest when enough time has been spent with the client. Specialist financial crime solicitors will always want time together for the lawyers to have the best idea of what kind of character they are presenting to the jury.

Knowing the relationships

Convincing the jury in a complex case is often not just about addressing the prosecution allegations. Knowing the culture, practices, and relationships in any organisation can be of real importance if the story is to hold together in court. A financial crime solicitor has to spend enough time not just dealing with the law, but also looking at the whole environment in which the fraud is alleged to have taken place if he or she is to have the advantage over the prosecution.

The right story and the right barrister to tell it

Any specialist financial crime solicitor worth their salt will tell you that winning cases is not just about proving that the prosecution allegations are false. It is often not even just telling what happened. It is about telling the most attractive version of what happened. This is where criminal defence can be at its best. In celebrated cases where the prosecution evidence seemed strong, such as famed US trial lawyer Johnnie Cochran's defence of OJ Simpson, and Thomas Mesereau's defence of Michael Jackson, it was the team who told the most attractive story which won.

Barrister choice is important. Some barristers are known as aggressive and powerful, some are sensitive and likeable to a jury, and others may have a tremendous ability to retain data. All are useful qualities in the right case. Once a strategy forms, and the client's personality and requirements of the case are considered, the financial crime solicitor's task of instructing a barrister should be approached with care and respect for the specific case. The right barrister is not just experienced in the type of case, but is right for the story to be told and compliments the client's personality.

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