R v John Beckett

For fraudulent trading under section 993 of the Companies Act 2006, the prosecution must prove that the business, or part of it, was carried on for a fraudulent purpose, that the defendant was knowingly a party to it, and that he acted dishonestly. The statute does not require proof of deception or a separately identified act of misconduct. A fraudulent purpose may be inferred from a patchwork of acts and omissions, considered as part of the way the business was organised and operated. Breaches of consumer-protection regulations may assist the jury in assessing dishonesty and fraudulent purpose, but they are not themselves the offence or its sole determinant. For sentencing, fraud guidelines are relevant only by analogy, and comparisons with other cases require caution because fraudulent trading covers a wide spectrum.

The appellant was convicted in the Crown Court at Bournemouth of two offences of fraudulent trading under section 993(1) of the Companies Act 2006, arising from the operation of two insulation businesses. He appealed against conviction on five grounds and against sentence. The prosecution case was that the businesses systematically used dishonest sales practices, including misleading representations, pressure selling and targeting vulnerable customers, and that the appellant was knowingly party to that conduct.

The appeal concerned the meaning of fraudulent purpose, the relevance of the Consumer Protection from Unfair Trading Regulations 2008, the knowledge and dishonesty requirements, the adequacy of the judge’s answer to a jury question, and whether concurrent sentences totalling six and a half years for the principal offence were excessive.

1. Conviction appeal. Leave to argue ground 4 was refused. The other grounds were argued and the appeal against conviction was dismissed.
2. Fraudulent purpose. Section 993 does not impose an additional requirement to prove a specific form of misconduct. The jury must be sure that the business, or part of it, was carried on for a fraudulent purpose. Fraudulent purpose has its ordinary meaning and involves conduct beyond what ordinary and decent people engaged in business would regard as honest. Deception is not essential. Misconduct may be evidence of fraudulent purpose, but is not itself an ingredient. The purpose may be inferred from a patchwork of acts and omissions, including planned acts and omissions, viewed in the context of how the business was planned, organised and operated. A judge need not enumerate every alleged act relied on by the prosecution, and must not trespass on the jury’s role by ruling whether particular conduct necessarily amounts to fraudulent trading. The directions were adequate and consistent with R v Hunter and Another [2021] EWCA Crim 1785.
3. Consumer regulations. The jury could consider proved breaches of the 2008 Regulations as evidence relevant to whether the businesses acted dishonestly, but the Regulations did not define the offence charged and were not its sole determinant. The directions, read as a whole, kept the jury’s focus on fraudulent trading.
4. Knowledge and dishonesty. The defendant had to know of the fraudulent purpose, but need not know that his conduct was dishonest by the standards of ordinary decent people. Once his actual state of mind as to the facts was established, dishonesty was determined objectively by the fact-finder: Ivey v Genting Casinos [2017] UKSC 67. The judge’s answer to the jury question was correct and did not undermine the directions.
5. Sentence. The sentence was not manifestly excessive. There are no sentencing guidelines specific to fraudulent trading. Fraud guidelines may be considered by analogy, but starting points and category ranges should not be applied mechanically. The offence covers a wide spectrum, so comparisons with sentences imposed on different facts are often of limited assistance. This offending was at the top end of that spectrum. The appeal against sentence was dismissed.

• Court of Appeal (Criminal Division): The appeals arose from convictions and sentence imposed in the Crown Court at Bournemouth. Leave was granted on four conviction grounds and by the full court on the sentence appeal. Leave to argue the fourth conviction ground was refused; the remaining appeals were dismissed.
• Crown Court at Bournemouth: The appellant was convicted on 6 August 2024 and sentenced on 18 June 2025 to six and a half years’ imprisonment for the first offence, with a concurrent three-year term for the second. Ancillary matters remained to be determined.