Responsibility to report suspected benefit fraud to DWP or other bodies

This was the subject of some discussion in our office and although in practice the amount of deliberate fraud we come across is neglible I felt it was an interesting discussion which merited other people’s thoughts.

The debate is this;

As welfare rights advisers are we under any legal obligation to contact the DWP (or indeed the Police) if we have reasonable grounds for suspecting a client of ours is making or maintaining a fraudulent claim for benefit? If we do have that duty where does our duty of confidentiality to our clients fit in with this?

The discussion was about deliberate fraud, not the sort of inadvertent error that we all come across from time to time so I suppose we would have to have reasonable suspicion that someone had deliberately and knowingly done something that meant they were being paid benefits they were not entitled to.

Any observations,opinions, settled practices in other areas, legal references etc etc gratefully recieved.

Pete.

The CAB’s bureau management information service has a useful article on ‘Benefit fraud and advisers’, providing a legal opinion. It dates from 2002, so the department may have changed its stance somewhat since then? Anyway, a brief paraphrase:
in 1997 the DSS apparently wrote to CAB saying “Where a citizens advice bureau has given advice in good faith and there was no evidence of actively assisting someone in an attempt to defraud the Department, we would clearly not seek to bring a prosecution against them.” That said, a Section 112 charge would not require dishonesty on the part of the adviser. It is unlikely that an adviser would be held liable for having ‘allowed’ another person to fail to notify a change, but we should bear in mind that there is no case law supporting non-solicitors being able to use the recommended defence of ‘legal professional privilege’.

I think CABs generally make a clear record of having advised a client to report their circs to the DWP, and just refuse to give further advice if that isn’t followed. Where an adviser “suspects” fraud rather than “knows”, it gets a bit murkier.

Certainly we come acfross the odd case where a client proposees to do something fraudulent (like conceal capital) knowing that they ought to disclose it. We would tell them that that would be fraud and that if they go down that route we cannot help them again. But we wouldn’t report it, and would make damn sure that the case was written up in such a way as to make it perfectly clear that we told them they should not do it and would not help them.

Does “Tilley” move this on at all?  “Knowingly” by a 3rd party (partner) was considered in the context of s.112.

R v Tilley [2009] EWCA Crim 1426
http://www.bailii.org/ew/cases/EWCA/Crim/2009/1426.html

My “trigger” notes suggest a merely passive “do nothing” (by a third party) is not sufficient in itself for an offence to be committed.

In the context of a duty to notify changes in circs, the recent Vassell case demonstrated a clear distinction between the civil requirements of a duty to notify where the change is one a person “might” be expected to know “might” affect benefit and the criminal requirement (in order to establish an offence) of a duty to notify a change that WOULD affect benefit.  Obviously, that is only one arm of s.112 but it’s one of the more likely to be potentially engaged.

Coventry City Council v Vassell [2011] EWHC 1542 (Admin)
http://www.bailii.org/ew/cases/EWHC/Admin/2011/1542.html

Thanks to everyone for an interesting discussion,since posting the original query I have done some further research and found the Proceeds of Crime Act 2002 which seems to say that any money or property obtained by fraudulent means falls within the money laundering regulations (although this part was in the Wikipedia entry and may have to be treated with some caution) and as such there is a duty on many organizations or practitioners to report it , without telling the client that they are doing so.

At the risk of prolonging the discussion does anyone have any thoughts about this particular Act, especially as i don’t think welfs have legal priveledge.

I remember a long discussion on this issue before, but I think it might have been in the “old” discussion forum. I’ll have a poke about and see if I can find it anywhere.

Paul

Its here, if the link works.

http://www.rightsnet.org.uk/forum-archive/index0356.html

Thanks Paul, link works fine but that is a different thread to one I was thinking of. It was when a Welfare Reform Act seemed to introduce the likelihood that advisers could be prosecuted for the potential misdeeds of their clients, but I can’t find it anywhere.

oh dear - have had a look but can’t find - sorry, ros

Pete C - 25 August 2011 09:26 AM

Thanks to everyone for an interesting discussion,since posting the original query I have done some further research and found the Proceeds of Crime Act 2002 which seems to say that any money or property obtained by fraudulent means falls within the money laundering regulations (although this part was in the Wikipedia entry and may have to be treated with some caution) and as such there is a duty on many organizations or practitioners to report it , without telling the client that they are doing so.

At the risk of prolonging the discussion does anyone have any thoughts about this particular Act, especially as i don’t think welfs have legal priveledge.

I have noticed that a client care letter used by another organisation warns its clients, re money obtained from benefit fraud, “we have a duty to report any suspicions to the Serious Organised Crime Agency” and “our obligations under the Proceeds of Crime Act 2002 override our usual duty of confidentiality towards you”.
I’m not aware of any guidance from CAB on this.

AFAIK the duty to notify under the money laundering rules/Proceeds of Crime Act only applies to specified professionals including solicitors and accountants. It does not apply to advisers not employed by solicitors.

CPAG’s advice on what to do is useful and very clear - basically tell client you don’t condone fraud, they have a duty to inform DWP and make a good note of your advice.

The provisions relevant to money laundering are to be found at part 7 and schedule 9 of POCA 2002 and I cannot for the life of me see how welfare rights advisers (except, possibly for those who work for solicitors) can be caught by them. 

Please feel free to correct me if I’ve overlooked something but I will not be looking over my shoulder any time soon.

You are correct, the welfare rights organisation I was referring to is an LLP, regulated by the SRA.

There ought to be something on Cablink about it, or BMIS - get your manager to look it up.

Bmis only contains the item on fraud I mentioned in my first comment. I was wondering why there is no subsequent guidance on any duties imposed by POCA, but neilbateman and nevip have explained why it shouldn’t apply (to my great relief).

When I first volunteered as a generalist adviser for the CAB, without any real idea of what it involved, I recall that one of the interview questions was “What would you do if you knew a client was committing benefit fraud?”. I think I instinctively gave the right answer, but it’s not a straightforward point to justify. A while ago I had a meeting with some benefit fraud officers. I found it interesting that they seemed to have no concept that as a welfare rights worker my primary duty is to the client, and that our service really shouldn’t give even the appearance of having aims that conflict with that, eg they thought it appropriate to ask that I distribute leaflets advertising their fraud hotline.