Fraud in Scots law
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This thesis seeks to provide a deeper understanding of the Scots law of fraud. Adopting a method that is both historical and doctrinal, it provides a critical analysis of the current understanding of fraud and argues for an approach that is more consistent with Scotland’s legal history which, in turn, was profoundly influenced by a much older tradition of European legal thought. It begins by exploring the historical scope of fraud in both a criminal and civil context with specific focus on questions of definition and the extent to which “fraud” was used in the broader sense of activities not involving deceit. A detailed analysis is given of the widespread concept of presumptive fraud by means of which Scots law was able to provide a remedy for unfair or unwarrantable behaviour without any requirement for a deceitful intention and for misstatements made unintentionally. The argument is made that presumptive fraud was a mechanism for delivering substantive justice and that its conceptual roots lie in an Aristotelian understanding of justice as equality. A comparison is made between the scholastic doctrine of restitution, which was developed by Thomas Aquinas as the outworking of the Aristotelian virtue of justice, and the scheme of Scots law created in the Institutions of the Law of Scotland by Viscount Stair (1619-1695), who is said to be the founding father of Scots law. It is suggested that the religious and philosophical conditions which existed in seventeenth century Scotland were particularly fertile soil for scholastic legal ideas which conceptualised law within a moral and religious framework. The second half of the thesis undertakes a doctrinal analysis of fraud in three parts. First, the complex relationship between fraud, error and misrepresentation is examined and the case is made that misrepresentation, whether intentional or unintentional, sits more comfortably in the law of fraud than in the law of error. Secondly, modern legal literature is critically assessed and the dominant modern narrative – that error induced by misrepresentation is a native concept in Scots law – is questioned. Thirdly, a new taxonomy of fraud is proposed which distinguishes between primary and secondary fraud. The operation of secondary fraud (which amounts to “participation” in the primary fraud of another and therefore involves three-party situations) is explored through the application of two familiar legal maxims: the “fraud” principle (that no one should be enriched through the fraud of another) and the good faith purchaser for value. In the context of secondary fraud, it is argued that the criteria for its operation - mala fides and a gratuitous transaction - are both core components of the older concept of presumptive fraud. The thesis comes full circle as it is suggested that while the broader equitable definition of fraud, rooted in equality, may have disappeared in the context of primary fraud, secondary fraud retains it.