What is Civil
Civil fraud can generally be defined as a claim in
fraudulent misrepresentation or deceit such as bribery or breach of a contract.
It has also been described as a way of obtaining financial advantage or causing
financial loss through dishonesty. It has a wide meaning and can either entail
a duty of care or a cause of action which must be proven. A claim can be made
under the Misrepresentation Act 1967 or through the tort of deceit.
Requirements to prove
The defendant must have made a false
misrepresentation of facts – this may include misleading conduct and
concealment of a fact.
There must also be a dishonest state of mind
where the person making the statement/representations has no real belief in
what he is saying. This suggests that there is no honest belief in the representations
The claimant has to have relied on the statement
made showing that there was an intention to deceive the claimant.
Actual reliance on the statement made needs to
also be proven. This means that a certain level of influence would have been
exerted where the claimant would have acted differently if the false
representation had not been made.
There must have been some financial loss caused
to the claimant
In order to prove a civil fraud, the claim will fall on the
balance of probabilities meaning that stronger evidence needs to be provided
the more improbable the claim is.
A claim made for civil fraud can either be made through
arbitration of litigation where an arbitration agreement can be reached through
an arbitration tribunal.
Remedies for civil fraud include:
Damages as a remedy is a result of the actual loss suffered
by the claimant as a result of the false misrepresentation that they relied on.
This means putting the claimant back into the position they would have
originally been in.
This remedy assumes that the contract was not made at all
and anything transferred would go back to the transferor.
This is a remedy through equity where property is restored
to the claimant through tracing.
Advantages for civil fraud proceedings include:
The burden of proof not being as strict since it
is based on the balance of probabilities
The process is quicker than going through
criminal fraud proceedings where disclosure is made between the parties and a
judgement is made by the court.
There are numerous remedies specific to each
case such as damages and property can be easily recovered through the equitable
remedy of tracing.