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Investigating Housing Fraud:
Five ‘Top Tips’
Richard Hanstock
(Pupil Barrister)
Cornerstone Annual Housing Conference
25th November 2014
Introduction
1. Even though the same wrongdoing can give rise to both civil and criminal liability,
a criminal charge serves a different social purpose to a civil claim. A crime is an
offence against the whole of society, calling upon a defendant to account to the
public for behaviour that is said to have harmed more than just the authority that
brings the prosecution. It is an allegation that the defendant has breached a
minimum standard of behaviour, and that he or she deserves to be punished.
2. It goes without saying that the consequences faced by a criminal defendant can
be far weightier than in civil proceedings. A criminal conviction alone can have
serious ramifications – a conviction for an offence of dishonesty in particular can
hamper employment prospects, let alone the threat of immediate imprisonment in
serious cases. Given that a defendant’s liberty is at stake, it follows that criminal
courts are especially anxious to ensure accuracy in the assignment of guilt: as
Blackstone put it, ‘it is better that ten guilty men go free than one innocent suffer’.
3. These differences are reflected in the burden of proof. Whereas civil courts weigh
the evidence and decide which of two competing accounts is more likely than the
other to be true, a criminal charge must be proven beyond reasonable doubt, so
that the tribunal of fact is ‘sure’ that the defendant acted in the way alleged. There
must be guarantees of fairness that spare the defendant from the risk of
prejudice by the tribunal or impropriety by the investigating authority.
4. The practical effect of these different principles is that defendants have at their
disposal a far wider armoury with which to challenge the admissibility of evidence
against them. It follows that any investigation that may lead to a criminal
prosecution would be wise to follow stringent practical guidance, some of which
appears in this document.
5. This briefing paper outlines the basic principles of professional investigation,
before giving some practical advice on the following topics: disclosure, hearsay,
continuity, interviewing, and surveillance.
Principles of good investigation
6. Social housing fraud investigators have an important social function. They are
trusted to gather evidence to be presented to a court, and are expected to do so
professionally and impartially.
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7. In September 2014, the College of Policing published its Authorised Professional
Practice (‘APP’) manual on criminal investigation.1 It is available online and
compliments the Core Investigative Doctrine,2 a manual produced by the
Association of Chief Police Officers. Although aimed at police officers, it is
applicable to criminal investigations of all types, and all investigators should be
familiar with its principles.
8. One key message is the need to adopt an investigative mindset. The mindset is
summarised by Practice Guidance to Criminal Procedure and Investigations Act
1996 (‘CPIA’), at [3.5]:
“In conducting an investigation, the investigator should pursue all reasonable
lines of inquiry, whether these point towards or away from the suspect.”
9. Investigators are expected to gather and preserve potentially relevant material in
a non-adversarial manner. Material is anything that is potentially relevant to the
offence under investigation, to any person being investigated, or to the
surrounding circumstances of the case. Investigators have a duty to retain all
relevant material and assess whether it ought to be disclosed, even if it does not
form part of the case against the accused.
10. The APP gives a practical example of the application of the investigative mindset:
“If four out of five witnesses report that the suspect was in a red car and the
remaining witness’s report contradicts this, the investigator should not assume
that the majority are right and must investigate further to ascertain the exact
colour of the suspect’s car. Investigators should expect to be challenged by the
defence in relation to the enquiries that were made to ascertain any
discrepancies in statements.”
11. However, resources are not unlimited, and investigators must be able to make
and justify decisions about what lines of enquiry are reasonable or proportionate
in all the circumstances of the case. Maintaining an audit trail of these decisions
“will enable investigators to develop a disciplined approach which ensures that
the decisions they make are appropriate to the case, are reasonable and can be
explained to others” (see APP, above).
12. What follows is some practical advice to investigators who are keen to ensure that
an investigation is as fair as possible, in order to ensure the right result in court.
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2
Available at http://www.app.college.police.uk/
Available from the National Policing Improvement Agency, or at http://bit.ly/1yRP9Yv
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Tip 1: Retain, record, review, reveal
13. Application of the investigative mindset will generate and uncover a significant
volume of material, even in a relatively straightforward case. This could include
daybook notes, witness statements, photographs, real evidence, correspondence,
interview transcripts, and more. All this material must be retained and a short
descriptive record kept on schedules of used and unused material. These
schedules facilitate evidential review and revelation of material to the prosecutor,
enabling the proper observance of disclosure obligations under the CPIA.
14. The mantra ‘retain, record, review, reveal’ appears in the Attorney General’s
Guidelines on Disclosure, published in December 2013.3 All investigators
should be familiar with the Review, and its associated Judicial Protocol: it is often
referred to in court and can form the basis of cross-examination or argument by
the defence. If the defence are able to highlight failures in investigation, retention
or disclosure, they may create the impression that an investigation has not been
impartial or that there has been a failure to pursue a reasonable line of inquiry.
15. Many benefit fraud offences are dealt with summarily in the Magistrates’ Court,
particularly the summary offences under the Social Security Administration Act
1992 and the new either-way offences in the Prevention of Social Housing
Fraud Act 2013. Disclosure principles apply with equal force in the Magistrates’
Courts as in the Crown Court: see the Magistrates’ Court Disclosure Review
published in May 2014,4 making clear that robust case management decisions will
be taken where there has been a failure to comply with disclosure obligations. It
follows that any investigation that may lead to any criminal charge should take
account of this guidance.
16. Although it is very rare for failures to retain evidence to lead to a stay of
proceedings, this can create an avenue for the defence to cast reasonable doubt
upon the prosecution case, or to argue that there is no case to answer because
the evidence is inherently unreliable. Failures in disclosure, however, are much
more fundamental to the right to a fair trial, whether occasioned by a failure to
record, to review, or to reveal. In Sinclair v HM Advocate [2005] HRLR 26, a
failure to disclose witness statements made by a prosecution witness that were
inconsistent with live evidence given by that witness led to a stay of proceedings
as an abuse of process, even though the defence had not requested them. The
focus is not whether the oversight was innocent, but whether the defendant has
been prejudiced as a result.
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17. Service of an unused schedule can encourage a defendant to file an early
defence statement, equipping the prosecution better to meet the defence at trial.
It is important to remember that relevant information includes material held about
a suspect tenant prior to the start of an investigation: a thorough search should be
conducted at an early stage, which may require enquiries of neighbouring
authorities. Sensitive information can be withheld from the defence if necessary.
18. The CPIA Code of Practice5 offers further practical guidance on the approach to
disclosure, and recommends that each case has a dedicated disclosure officer
who should be fully conversant with CPIA obligations. This may be the same
person as the lead investigator and the officer in the case, but makes clear that
these three roles are distinct and will generally be carried out by separate
individuals in larger cases.
Tip 2: Hearsay
19. The treatment of hearsay is an area in which there are significant differences
between civil and criminal proceedings, and local authority investigators must
take considerable care to avoid hearsay when drafting witness statements.
20. Hearsay is any representation of fact or opinion made otherwise than by a person
giving oral evidence in court intending to cause another person to believe or act
upon the matter stated. If the assertion is relied upon for the truth of its contents,
as opposed to merely the fact that it was made, the general rule is that it is
inadmissible hearsay evidence. Multiple hearsay is especially unreliable.
21. Hearsay evidence is considered to be inherently fragile due to the possibility of
distortion or concoction (think ‘Chinese whispers’), and the inability to crossexamine the source. Given the anxiety to ensure that the benefit of any doubt in a
case goes to the defendant, the permission of the court is often required before
hearsay can be admitted, which will only be given in limited circumstances.
Hearsay is governed by the Criminal Justice Act 2003 (‘CJA03’), which also
prescribes some tightly defined exceptions to the general rule of inadmissibility.
22. It is important to distinguish between hearsay and real evidence. A fraudulent
benefit claim form is not relied upon for the truth of its contents, and is therefore
real evidence, not hearsay. Evidence that is ‘mechanically’ produced, such as a
photograph or CCTV footage, is not hearsay, but should be exhibited in a
witness statement as real evidence (see ‘continuity’ below). However, records of
human statements input into a computer system may be hearsay if they are relied
upon for the truth of their contents. Section 117 CJA03 allows for the
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admissibility of documentary hearsay created in the course of a trade, business or
profession, such as correspondence, payment records, hospital records and
notes of conversations. However, where a document is prepared in the
contemplation of criminal proceedings, such as investigators’ notes, it must be
shown that the maker cannot reasonably be expected to remember its contents.
Previous inconsistent statements can become admissible through section 120.
23. Housing fraud investigations are typically paper-heavy. Even where documents
are admissible under section 117, it is usually preferable to reduce their contents
to admissions under section 10 Criminal Justice Act 1967 in order to make the
case more accessible to the tribunal of fact.
24. If it is necessary to rely on hearsay as part of the prosecution case, and it cannot
be argued that one of the exceptions applies, the permission of the court must be
sought at an early stage of the proceedings. Notice for permission under the
CJA03 must be given in accordance with Part 34 of the Criminal Procedure
Rules, and should be drafted with legal advice. The jury may be warned to take
care before relying on the evidence, as the source cannot be cross-examined.
Tip 3: Continuity and contamination
Continuity
25. In order to go before a jury, real evidence must either be exhibited by a witness
or agreed with the defence. This is because every piece of real evidence must be
put in its proper context in order for the jury to interpret it. An exhibiting statement
should include information such as where and when the exhibit was found, who
seized it, how it was retrieved, what steps have been taken to preserve it, and
what has happened to it since it was seized. Similarly, photocopies and printouts
should be exhibited as true copies of the original in order to provide continuity.
26. The majority of exhibits in housing fraud cases will not be subjected to forensic
analysis, therefore best practice around packaging, refrigeration, transportation
etc. is unlikely to apply. However, the use of sealed evidence bags is still
advisable for documents such as original claim forms, in order to demonstrate that
nobody has tampered with the exhibit since it was seized. The seal can then be
broken in the courtroom, in front of the jury, so that the exhibit can be inspected. It
is good practice to seal master copies of CCTV, interview tapes and electronic
evidence for this reason, ideally in the presence of the suspect.
27. The need to break evidential seals in the course of an investigation can be
minimised by bagging the items in a way that permits inspection or photocopying.
Where an evidential seal is broken, the person responsible for the exhibit should
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note this on the exhibit bag, and produce a statement explaining why it was
necessary to break the seal, what happened to the exhibit whilst it was removed,
and what steps were taken to re-seal the exhibit.
Contamination
28. Real evidence is not the only type of evidence that is vulnerable to tampering or
contamination from other sources. Witnesses can be highly suggestible and may
not ‘come up to proof’ in the witness box: unlike civil proceedings, the tribunal of
fact will not read the witness statements during the hearing. It is important to take
steps to ensure that statements are faithful to witness’ own recollections and are
taken an environment that is free from suggestion and collusion. Statements
should be written in the witness’ own words to avoid contamination by
investigators. Separate questioning of partners and family members can often
reveal inconsistencies that damage credibility and are helpful to the prosecution.
29. Statements should be taken in private, and interviews should be conducted with
one suspect at a time. Significant statements made outside an interview should
contemporaneously be recorded, with the suspect given an opportunity to sign the
statement, and then confirm their comment at the beginning of a taped interview.6
Tip 4: Interviews
30. Interviews are a valuable and complex part of any investigative strategy. They
should be thoroughly planned and be more than merely speculative, taking place
only when the investigation has reached a stage at which there is enough
evidence with which to challenge an inconsistent account given by a suspect.
31. Interviews in social housing fraud investigations typically take place on a
voluntary basis. It may be possible to use a failure to attend for interview against
a suspect, in a similar way to an adverse inference from silence under section 34
Criminal Justice and Public Order Act 1994. Letters inviting suspects for interview
should be retained as evidence, and should explain to the suspect that their
failure to attend for interview may be used against them in court.
32. Suspects sometimes attend voluntary interviews hoping to negotiate about the
outcome of impending proceedings. Although the answers given in interview may
influence an enforcement decision, the interview itself is a formal evidencegathering exercise and is not a discussion about the case. Although it is important
to maintain rapport to retain co-operation in voluntary interviews, this formality
should be made clear to the suspect from the outset. The physical location of the
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PACE Code C § 11, PACE Code E § 4. For video interviews see PACE Code F. http://bit.ly/1p17X7y
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interview, together with the use of audio recording equipment and the
professionalism of the interviewers, are important tools in setting the tone.
33. Suspect interviews should ideally be conducted by those who have been trained
in the PEACE model of interviewing: see the College of Policing APP manual
‘Investigative interviewing’.7 The PEACE framework consists of the following:
P
E
A
C
E
lanning and preparation
ngage and explain
ccount clarification and challenge
losure
valuation
34. The lead interviewer should be supported by a silent second interviewer, whose
role it is to record the account given by the suspect and guide the lead interviewer
during breaks. Exceptionally, the roles may swap if there is a breakdown in
rapport during the interview. The lead interviewer should focus on maintaining the
engagement of the suspect throughout the interview process. Breaks should be
used for the interviewers to discuss any outstanding areas with one another and
agree a plan for the next stage of the interview.
35. Every interview should be preceded by a written plan that is not shared with the
suspect. It should cover all topics relevant to the investigation about which the
suspect should be invited to comment. The plan does not necessarily structure
the interview, but helps to ensure that all points have been covered.
36. Contrary to popular belief, there is no obligation to give pre-interview disclosure.
In R (Otobo) v Slough LBC [2011] EWHC 2154 (Admin), a defendant attended
for voluntary interview when investigators believed that he had made fraudulent
housing benefit and council tax claims. The Court of Appeal confirmed that there
was no right to pre-interview disclosure of the basis for the investigation.
37. Before the interview takes place, there should be an assessment of fitness for
interview. Any vulnerabilities that the suspect may have should be explored and
any reasonable adjustments made. This process should be recorded in writing in
order to rebut any later claim that the interview was conducted under unsafe
conditions. In particular, in the event of a confession that is later challenged by
the suspect, section 76 PACE places the prosecution under a duty to prove that
the confession was not obtained in conditions that might render it unreliable.
38. The interview itself should take place in accordance with PACE Code E. After the
various formalities have been followed, the PEACE framework suggests that the
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interviewer should use open and probing questions to extract a full and
uninterrupted account from the suspect, summarising as appropriate.
39. After this account has been obtained and clarified, closed questioning should be
used systematically to challenge the contradictions and inconsistencies
contained within in the account. This is a non-accusatorial process that gives the
suspect the opportunity to explain the differences between their account and the
evidence. In particular, any exhibits that tend to suggest guilt can be put to the
suspect at this stage. It is at this point that the strengths of the prosecution case
will become evident. Remember—
A ssume nothing
B elieve nothing
C hallenge everything
40. At the close of the interview, a summary of the interview should be given, and the
next steps should be explained. Although it is important to maintain rapport,
interviewers should take special care to avoid commenting on enforcement policy.
In R (H) v Guildford Youth Court [2008] EWHC 506 (Admin), an interviewer had
stated that a case would be dealt with by way of a final warning, but the CPS later
reviewed the case and decided to prosecute. The case was stayed as an abuse
of process because of the interviewer’s comments, with the consequence that the
proceedings cannot be revived at a later date.
41. The final stage of the PEACE framework is evaluative, at which point the findings
of the interview are integrated into the broader investigation. This will feed into the
investigative plan, highlighting any further lines of inquiry. In particular, note that
the evidence of one co-defendant is not admissible against the other, but can lead
to the gathering of other admissible incriminating material: any such opportunities
should be pursued after an interview to strengthen the case against a suspect.
Tip 5: Surveillance authorisation
42. Surveillance evidence can be extremely valuable in social housing fraud
investigations, particularly where the use or occupation of a particular property, or
the activities of an individual claimant, are in issue. The use of surveillance by
local authorities is highly controversial, and consequently it is strictly regulated.
43. Local authorities are governed by the Regulation of Investigatory Powers Act
2000 (‘RIPA’). Each authority will operate its own RIPA policy, informed by Home
Office guidance to local authorities in light of changes in the Protection of
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Freedoms Act 2012.8 Investigators should not be put off by these stringent
regulations: familiarity with the authorisation regime will equip investigators to
know when and how to apply, in order lawfully to gather valuable evidence. Early
legal advice is encouraged to ensure that the correct authorisations are granted.
44. Investigative techniques within the local authority armoury that are governed by
RIPA include directed surveillance, the use of covert human intelligence
sources (‘CHIS’), and the obtaining of communications data (‘CD’).
45. Directed surveillance is covert activity likely to result in the obtaining of private
information about a person – falling short of ‘intrusive’ surveillance, which takes
place inside residential premises or private vehicles and in which local authorities
are never permitted to engage. CHIS includes test purchasers, undercover
officers and public informants. CD includes ‘service use information’ (i.e. the time
and duration of communications), ‘subscriber information’ (i.e. billing details) and
‘traffic data’ (i.e. the place from which communications are sent or received).
46. Traffic data are beyond the scope of local authority powers, as is the interception
of the contents of communications themselves: this means that cell site analysis,
that would place suspected offenders in particular places at particular times,
cannot be used without the support of the police. However, subscriber information
can be used to establish that a known individual is associated with a particular
address, a telephone number perhaps been provided on a benefit application
form. Service use information can be used to establish patterns of contact
between individuals, for example between a claimant and an illegal sub-tenant.
47. Where an investigation might benefit from any of the above, authorisation should
be sought from the appropriate officer within the local authority. In respect of
directed surveillance, local authorities can only grant authorisations when the
offence under investigation attracts a maximum custodial sentence of six months
or more. This ‘serious crime’ test does not apply to the use of CD or CHIS.
48. It is important to note that several offences under the Social Security
Administration Act 1992 do not satisfy the serious crime test: for example,
section 111 (obstructing an inspector) is punishable only by a fine, and section
112 (knowingly making a false statement) has a maximum sentence of just 3
months. However, section 111A (dishonest representations to obtain benefit)
does carry a six-month maximum term, and more serious offences of theft and
fraud will also satisfy the test. The either-way offences of unlawful subletting
created by the recent Prevention of Social Housing Fraud Act 2013 carry
maximum sentences of 2 years, whereas the summary offences of making false
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statements and withholding information at sections 171 and 214 of the Housing
Act 1996 are punishable only with a fine.
49. The consequences of unauthorised surveillance are serious. As well as rendering
the resulting evidence inadmissible in criminal proceedings, individuals whose
privacy has been violated may have a civil claim against the local authority. Legal
advice can always be sought regarding the need to obtain authorisation or the
legality of an authorisation request.
Conclusion
50. A close relationship between the prosecutor and investigators from an early stage
of an investigation will maximise the prospects of a safe conviction.
51. Not only can early legal advice help to avoid these pitfalls and identify gaps in the
evidence that can be plugged in advance of a trial, an early relationship with a
prosecuting advocate can lead to the early drafting of admissions, which can
narrow the issues, shorten the trial, and cut out the need for urgent additional
investigation at a time when investigators are likely to have competing priorities.
Similarly, early drafting of a summons, charge or indictment could lead to early
plea or other concessions from the defence – all of which can cut costs.
52. However, there is no substitute for effective and professional investigation, which
will lead to better quality evidence and more guilty pleas. There is a great deal of
public interest in combating social housing fraud, and cases can be won or lost on
the quality of an investigation. Investigators should frequently review their
policies, procedures and training to ensure that they are keeping pace with
criminal law.
© 2014 Richard Hanstock, third six pupil barrister at Cornerstone Barristers.
Richard has served as a volunteer police officer since 2008.
This paper does not constitute legal advice and should not be relied upon as such.
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Recommended reading

Attorney General’s Guidelines on Disclosure 2013: ht t p: / / bi
t . l y / 1uPmj c 7
o Associated Judicial Protocol

College of Policing Authorised Professional Practice: ht t p: / / bi
t . l y / 1x nLELe
o Investigation manual

Investigative interviewing section

Criminal Justice Act 2003

Criminal Procedure and Investigations Act 1996
o Code of Practice: ht t p: / / bi
t . l y / 1v oz 7r W

Criminal Procedure Rules 2014: ht t p: / / bi

Crown Prosecution Service Legal Guidance: ht t p: / / www. c ps . gov . uk / l

Magistrates’ Court Disclosure Review 2014: ht t p: / / bi

Police and Criminal Evidence Act 1984
o Codes of Practice: ht t p: / / bi

t . l y / 1uuMCTz
egal /
t . l y / 1nFHaKJ
t . l y / 1p17X7y

PACE Code C (on treatment and questioning of suspects)

PACE Code E (tape recorded interviews)

PACE Code F (video recorded interviews)
Regulation of Investigatory Powers Act 2000
o Protection of Freedoms Act 2012
o Home Office Guidance to local authorities: ht t p: / / bi
t . l y / 1EZc NEs
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