Problem Question: Criminal Law, No.2

Problem Question:

Lizzie is staying overnight at a hotel. She has with her a very valuable diamond necklace. The hotel manager, who is aware of this, has advised her to put it in the hotel safe, and she has agreed that she will deposit it before going to bed. The manager goes off duty at 8 pm, assuming that the diamonds will be deposited later. In fact, when Lizzie goes to bed, she puts the necklace under her pillow instead. When the manager comes to work the next morning, he finds the hotel safe broken open and empty. He immediately calls the police and reports the diamonds stolen. When Lizzie is woken and told of the theft, she is too embarrassed to confess that the diamonds are still in her possession, and she goes home with them hidden in her pocket. She then tells her friend George what she has done. He advises her that, since the diamonds will now be impossible to sell, her best course of action would be to throw them into the sea from her yacht and to claim their value on insurance. Lizzie obtains a claim form from her insurance company, which she fills in and signs. Before she can post it, her cleaner comes across the diamonds in their temporary hiding place and alerts the police. Meanwhile, when George is interviewed by the police, he denies any knowledge of the whereabouts of the diamonds.

Discuss the criminal liability of Lizzie and George.

Lizzie's Criminal Liability

Fraud

Lizzie may be liable for fraud under the Fraud Act 2006. Fraud can occur through false representation or failure to disclose information when there is a legal duty to do so.

• Dishonesty: Lizzie was aware that the diamonds were not stolen, yet she intentionally allowed others to believe they were. This constitutes dishonest conduct.

• Failure to Disclose/False Representation: Lizzie failed to disclose to the hotel and the police that the diamonds were still in her possession. Furthermore, when she filled out the insurance claim form, she falsely represented that the diamonds were lost or stolen. This false representation was made with the intent to gain financially by claiming insurance money.

Attempted Theft

Lizzie could also be charged with attempted theft regarding the money from the insurance company.

• Appropriation of Property Belonging to Another: By attempting to submit a fraudulent insurance claim, Lizzie aimed to appropriate money belonging to the insurance company.

• Dishonesty and Intention to Permanently Deprive: Lizzie acted dishonestly with the intent to permanently deprive the insurance company of the money she would have received had the claim been processed.

• More Than Merely Preparatory Acts: Lizzie’s actions went beyond mere preparation, as she filled in and signed the insurance claim form, demonstrating a clear intention to complete the fraudulent act.

George's Criminal Liability

Conspiracy to Defraud

George may be liable for conspiracy to defraud if it can be proven that there was an agreement between him and Lizzie to commit fraud.

• Agreement: There is evidence of an agreement between Lizzie and George when George advised Lizzie to dispose of the diamonds and make an insurance claim, which would amount to fraud. This agreement itself constitutes a conspiracy to defraud.

• Encouragement and Assistance: Alternatively, George could be liable for encouraging or assisting Lizzie in the commission of fraud by advising her to commit the fraudulent act.

Fraud

George’s liability for fraud is less straightforward. For fraud to occur, there must be dishonest behaviour involving false representation, failure to disclose information, or abuse of position.

• Dishonestly Failed to Disclose Information: George did not disclose to the police that Lizzie had the diamonds, which could suggest an intention to assist in the fraud. However, fraud generally requires an intention to make a gain or cause a loss involving money or property.

• Application of Fraud Act 2006: Since George did not directly attempt to gain money or property, his actions might not fall directly under fraud, but his involvement in the conspiracy could still be criminally liable.

Conclusion

Lizzie is likely to be criminally liable for fraud through false representation and attempted theft, given her dishonest actions and intent to gain financially. George, while not directly involved in making a gain, could be liable for conspiracy to defraud due to his involvement in planning the fraudulent act and advising Lizzie on how to carry it out. His failure to disclose information to the police could also indicate criminal liability, although it might be more relevant under the conspiracy to defraud charge rather than fraud itself.