It is often said that fraud cuts across everything and it certainly assists when advising a client who has an old claim which likely to be time barred if one can establish fraud.
Fraud is a very wide term and covers not simply criminal activity but also civil and equitable fraud, the latter being based upon express or implied trust or some form of unconscionable conduct).
Apart from negating time bars, a fraud allegation can also be used to lift the corporate veil to get to directors and even shareholders. Further, the measure of damages can be greater, the Court’s approach to damages assessment and loss being far more generous.
Sometimes one needs to plead a form of fraud (such as fraudulent or grossly negligent misrepresentation) to overcome a contractual clause seeking to limit or exclude a part’s liability or to overcome an entire contract clause.
All that may appear very exciting but a warning is necessary; there are further hurdles to be overcome.
First, fraud has to be pleaded in great detail and be very focused indeed. That inevitably takes time and costs money. There are specific rules of pleading in the Civil Procedure Rules.
Secondly, the Bar Council rules and the Solicitors Code of Conduct make it critical for the lawyers to evaluate the evidence very carefully indeed because lawyers must not plead fraud in the absence of strong evidence. Often a lot depends on inference. To plead the case without such evidence can lead to the legal team being exposed to risk of disciplinary action.
Thirdly, it is often said that a plea of fraud will escalate the temperature of the litigation and it should be borne in mind that these days copies of Court pleading can be obtained by third parties unless the Court imposes some restriction on access.
Fourthly, the burden of proof is considered to be higher in the case of a plea of fraud.
At GSC we do not shirk away from advising a client to plead fraud if we consider there is evidence of such conduct and the proposed defendant had the requisite knowledge whether actual knowledge or by showing such a disregard for making appropriate enquiries as to be reckless.
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Michael Shapiro is an experienced litigator who has a very calm and collected approach to his job. He is never phased by the other side, and has an excellent manner with even the most difficult clients.
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