Refreshing Law
Our latest video is available to view on the Refreshing Law YouTube channel – please click here to watch the video in which Anna discusses a change in the law that is happening in September 2025, for large companies, in relation to failure to prevent fraud.
This link takes you to the Economic Crime & Corporate Transparency Act 2023: Guidance to organisations on the offence of failure to prevent fraud.
Anna Denton-Jones
Refreshing Law
A Court decision caught my eye when I was reading the legal news. Firstly, the case is interesting because it went all the way to the highest court in the land, the Supreme Court. Secondly, the Supreme Court overturned the decision of the Court of Appeal. Thirdly, the former employee had been ordered to pay back £97,000 having falsely claimed, in a job application, that he held qualifications and relevant work experience that he did not in fact have.
The case involved somebody called Jon Andrewes who had worked as the Chief Executive of St Margaret’s Hospice in Taunton. He claimed he had a university degree, relevant work experience and even a PhD from Plymouth University, insisting on being called Dr.
There was nothing wrong with his performance in the job, indeed the fact that he worked from 2004 to 2015 and was regularly appraised as either a strong performer or outstanding performer shows that he had not aroused suspicion at an early stage. He had also used similar lies to be appointed to roles as a Director and then Chair of the Torbay NHS Care Trust and as Chair of the Royal Cornwall NHS Hospital Trust.
At some point he was obviously caught out and the whole deck of cards came crashing down.
In 2017 he pleaded guilty to obtaining pecuniary advance by deception and two counts of fraud and was sentenced to 2 years imprisonment. The Proceeds of Crime Act of 2002 sets out a confiscation regime whereby criminals are relieved of their ill-gotten gains. In this case, the Crown were seeking an order that his entire earnings during the period of employment under false pretences should be confiscated. This would have been £643,000 (net earnings).
The Court of Appeal had held that it would be disproportionate to expect him to pay something back.
The Supreme Court sought a middle way and ordered he pay £97,000. There was clearly a feeling that to deprive a person of their entire earnings when the employee had apparently done a good job, would be a step too far but they also declined to agree with the employee’s submission that a ‘take nothing’ approach was appropriate. Despite the fact that he had done a good job, the Hospice and two Trusts had sought a person of honesty and integrity and would have chosen another candidate if they had known about the deception.
In carving this middle route, the Supreme Court was clearly trying to represent the difference between the earnings made as a result of the CV fraud and a lower amount of earnings that the defendant would have made had they not committed the fraud.
The same principles will apply whatever the seniority of the employee.
One of the key issues arising in the case is what background checks were done to verify qualifications and information given on the CV. Just because somebody is in a very senior position, all the status doesn’t mean we should not subject them to checks that we might make for more lowly employees. I am not sure how the deception was identified in the end but it does seem that at least 3 HR Departments have some egg on their faces?
Anna Denton-Jones
Refreshing Law
With everyday headlines about a cost-of-living crisis and employers pay rise intentions or activities running at well below inflation, employers are potentially more vulnerable to staff deciding to take matters in their own hands. I remember doing training alongside some senior ex-Police Officers who advised me that for corporate theft or fraud to take place, there only needs to be an opportunity and motive. As staff are beginning to feel the pinch then the motive may be there so it then comes down to whether or not within the structure of that person’s job, the opportunity exists.
Opportunity might come in the form of handling cash, payroll, dealing with corporate credit cards or even recording sales on your system. During the last couple of years, I have seen fraud cases involving each of these activities as well as the well-worn example of an employee having private work done for personal gain on the employer’s own resources.
Because we trust our colleagues, we don’t like to think about the fact that somebody might do something that we wouldn’t do ourselves or think negative thoughts about others. However, I come across this scenario often enough to know how heart-breaking it is for colleagues who feel betrayed when it happens and is discovered in practice.
For that reason, it might be worth thinking about whether there are any weak points in your structures: look at them with a stance of ‘If I was going to try and take advantage here, what could I do and how could I do it?’ For example, if I process payroll, do I also process my own salary or does someone else have to see it? If I am setting up suppliers on the system what is to stop someone creating a fictitious entry or setting up one of their friends and then paying ‘fake’ invoices?
Anna Denton-Jones
Refreshing Law
We care about your privacy. To help us improve our service, we may collect data to understand how people use our site. By allowing all cookies, we can enhance your experience. This means helping you find information more quickly and tailoring content or marketing to your needs. Some cookies are necessary for the site to function correctly.