Fraud law

We explain the key facts about this specialist area of litigation and hear from an associate at a leading law firm about her experiences.
Types of work

Big picture: the the key facts about working in fraud law

Fraud law is a type of litigation used to resolve disputes involving accusations of fraudulent activity - for example, forgery, breach of employee obligations, dishonesty, or making secret profits.

Why are lawyers needed?

Like commercial lawyers working in any area of litigation, fraud lawyers help their clients understand their position in law and, taking commercial considerations into account, advise them on the best course of action to take to resolve a dispute.

As fraud claims are sensitive, often acrimonious, and potentially very costly, the assistance of lawyers is likely to be sorely needed and very highly valued.

On the job

A fraud matter is likely to follow a similar pattern to a standard legal dispute, though with some important distinctive features.

Lawyers will start with an initial consultation with the client and then will move on to analysis and document-gathering.

Next, they'll establish whether they think there's a valid legal claim and, if so, of what type. At this stage, they might instruct a barrister to draft a claim or defence documents, following which both sides will exchange relevant documents and obtain witness statements.

Finally, there'll be a trial or an out-of-court settlement.

Fraud matters are more likely than regular litigation matters to include action against third parties, such as banks holding relevant accounts or a telecommunications company that can provide phone records, as perpetrators of fraud can be difficult to locate and bring into negotiations.

Fraud matters often also involve search orders and freezing injunctions - emergency court orders allowing a location to be searched or assets to be frozen on short notice, which can be crucial when a fraud has occurred or is suspected to have occurred.

Areas of law used include:

  • contract law
  • tort law
  • employment law

In practice: we spoke to an associate who works in fraud law at a large commercial law firm

What kind of work do you do?

I do a mixture of all kinds of contentious and investigative work in the fraud area. We often act on bankruptcy matters, sometimes very high-profile ones, and we also often do litigation relating to data theft and misuse of confidential information.

Within all of these areas we're very strong on injunctive work, particularly freezing injunctions and search orders.

What kind of clients do you act for?

We have quite a spread. My firm is a mid-sized firm and, typically for this type of firm, we tend to work for a lot of individuals and family businesses, where their business is their baby. So with these clients, by acting for their business, we have a really personal relationship with them.

On the other hand, we also act for institutions, particularly banks - in the past I've acted for a very well-known mid-sized bank when they suspected some of their employees of fraudulent activity.

Doing both really helps us do our job, because by doing so we get familiar with the steps that different kinds of client are likely to take at any stage and we can often thereby anticipate what our opponent is likely to do.

Can you describe one of your cases?

We recently defended two individuals who were accused of breaching employment covenants and misusing confidential information by their former employer. The claimant company brought injunctions against them to restrain them.

We were on the back foot when first instructed, but succeeded in completely turning the case around. We dealt with the injunctions, and then issued a counterclaim for a bonus that should have been paid to our clients by their former employer. We won this counterclaim, and got our clients' legal costs paid by the other side too.

What do you enjoy about your practice area?

I really like developing a strategy. Every case is different, but I like knowing we have this litigation ammunition, a toolbox of devices to use on our opponent's pressure points. Devising an argument is really exciting.

I also like helping clients extricate themselves from a difficult situation, whether that's putting an unjust accusation to bed quickly, or fighting a client's corner and making sure that justice is done properly.

What kind of person is suited to your practice area?

You need to be able to assimilate a large amount of information quickly - you've often got to piece together a story from documents from perhaps six or seven years ago, with a client who often won't remember what happened clearly.

You also need to be creative with devising strategy, thinking in a diagonal way - what I mean by that is not just going through the motions of litigation, but thinking of interesting and creative ways to put pressure on the other side.

You also need to have a very thick skin because clients in this area are under enormous amounts of pressure, so things can be very emotive. You need to be able to dispense honest advice confidently, but still have a degree of empathy so you can understand any frustration they're feeling.

What are the current big issues in your practice area?

Corruption and bribery are buzz words in fraud law at the moment - they're not the grease of commerce, but a bar to development. We've advised clients quite a lot recently on the new Bribery Act, still quite an untested area.

Recently there's been quite a lot of comment about law firms' use of investigators. At my firm we make sure that all of the investigators we use are retained on very strict terms - we have a zero tolerance policy for any illegal activity, such as going through someone's bins.

Another issue is that a lot of the documentation in our cases is not found in the classic manila folder under someone's bed. It's on WhatsApp, Facebook, Google Docs, email or in the cloud.

So getting a search order is not always as straightforward as saying you want permission to search someone's house. You might have to find out who hosts a website, who their servers are owned by and where their servers are before you can go to court for an order. Getting your hands on data is an increasingly fraught process.

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