There have been reports of the first major arrest arising out of suspected fraud under the Job Retention Scheme.

A 57-year-old man has been arrested in Solihull, in the West Midlands, on suspicion of cheating the public revenue, fraud by false representation, VAT evasion and money laundering as part of a suspected £495,000 Job Retention Scheme fraud. Eight other men were arrested in relation to a separate multi-million pound tax fraud and alleged money laundering offences. It has been reported that more than 100 officers from HMRC were deployed to 11 different locations.

The man has been released under investigation.

In a press release, HMRC emphasised that more than £27bn had been claimed through the scheme and that the vast majority of employers presenting claims had done so lawfully.

HMRC has set up an online tool to report fraud under the furlough scheme. No personal details need to be provided, and any information will be treated confidentially. HMRC has disclosed that it has already received thousands of reports of fraudulent use of the furlough scheme. Separately, organisations advising potential whistle-blowers have reported significant numbers of workers getting in touch to raise concerns of fraud.

Under the Job Retention Scheme, no furloughed employee may carry out paid or unpaid work on behalf of an employer. Furloughed employees may be asked by their employer to undertake certain forms of training (but not if the training provides financial benefit or services to the employer). An employer who claims under the Job Retention Scheme while having furloughed employees undertake work for them could be committing a criminal offence.

Under the Flexible Furlough Scheme (which began on 1 July 2020), employers may now agree with previously furloughed employees that they will undertake work for any amount of time and under any shift pattern. The employer must keep records of the hours actually worked by the employee. Employees will be paid their full salary for this work – with their wages, tax and national insurance paid for by the employer. Employers can later claim the shortfall between the employee’s hours actually worked and their normal hours, up to the 80% furlough ceiling.

It remains to be seen how many more reports of fraud will be made. It is clear that HMRC has now committed significant resources to investigating fraudulent claims made under the Job Retention Scheme.

First major arrest for alleged fraud under the Job Retention Scheme 

In his Summer Statement, the Chancellor has announced a job retention bonus for employers, of £1,000 per furloughed employee who returns to work and remains in work until at least 31 January 2021.

a.	The employee must have been furloughed for at least some period during the Job Retention Scheme period.

b.	The employee must be paid at least £520 per month between 1 November 2020 and 31 January 2021.

c.	The employee must remain in work until at least 31 January 2021.

The bonus will be paid to employers in February 2021.

Further details of the bonus scheme will be published later in July.

Job Retention Bonus Announced 

Amendments to the Finance Bill 2020 will introduce a 30 day period during which employers or the self employed can notify HMRC of inaccurate grant claims under the Job Retention Scheme and the Self Employed Income Support Scheme. Where applicants notify HMRC within that timeframe they will avoid being charged a penalty.

Notification must be made within 30 days of the incorrect claim or within 30 days of the Finance Bill 2020 receiving Royal Assent (expected to occur in July) if the claim or claims at issue was before that date.

Amendments to the Finance Bill also confirm that grants under both schemes are to be treated as taxable income and will provide HMRC with powers to recover incorrect payments and to impose penalties for deliberately false claims.

Thirty day period for notifying HMRC of inaccurate grant claims under the Job Retention Scheme and the Self Employed Income Support Scheme to be introduced

The Ministry of Justice (MoJ) has published a recovery plan covering courts and tribunals, detailing the range of measures being considered. The plan comes at the same time as a report highlighting court backlogs from the HM Crown Prosecution Service Inspectorate (HMCPSI), the official body tasked with inspecting the CPS and the Serious Fraud Office.

Trial backlogs in the Magistrates’ Court increased by 41% between the beginning of March and the end of May. Backlogs in the Crown Court have increased by an estimated 53%, to over 40,000 cases. Delays in the court system have been described as “highly detrimental to justice” by the HMCPSI.

Juries may be allowed to sit with as few as 7 members, rather than the traditional 12 (with 10 being the minimum allowed to reach a verdict). Alternative plans, including removing the right to jury trial for certain either-way offences, appear to have been dropped by the MoJ.

The report from HMCPSI recognises that virtual courts “have become the norm nationally”, despite the reported failures of earlier attempts to encourage courts to go virtual. The MoJ recently announced £142m spending on court maintenance and technology. Its plan suggests increasing the use of audio and visual technology for more and new types of hearings.

Extended court days will be explored, to increase capacity and help address the backlog in cases. The MoJ plans to reopen all remaining courts and tribunals in July 2020. Simon Davis, President of the Law Society of England and Wales, put on record his opposition to the proposal to extend sitting hours for courts.

The Secretary of State for Justice, Robert Buckland, has announced 10 emergency “Nightingale courts” are being set up, to increase capacity. He has opted to name them “Blackstone courts” after William Blackstone, 18th century judge and jurist.

Government Considers Measures to Tackle Criminal Cases Backlog

The Government has announced new reforms in domestic abuse cases as the domestic abuse bill went through its report stage in the House of Commons on Thursday 25th June 2020

https://www.gov.uk/government/news/major-overhaul-of-family-courts-to-protect-domestic-abuse-victims​

A pilot scheme is to be developed in which Judges will be empowered to intervene in cases of domestic abuse as part of a number of legal changes to be announced. An expert panel from charities, the judiciary, family law practitioners and academia have been advising on the reforms. They spoke to more than 1,200 individuals and organisations for a report, “Assessing risk of harm to children and parents in private law cases”. Introducing the changes, the justice minister, Alex Chalk, said: “Every day the family courts see some of the most vulnerable in society and we have a duty to ensure they are protected and not put in danger. This report lays bare many hard truths about long-standing failings, but we are determined to drive the fundamental change necessary to keep victims and their children safe.”

The additional powers encourage the adoption of an ‘investigative’ or ‘inquisitorial’ approach by judges to direct the course of hearings, rather than following the traditionally adversarial approach. Judges are being urged to adopt a more "continental" style in the way they conduct their courtrooms by intervening and directing lines of questioning, rather than merely letting lawyers for each side present their case.

There will also be trials of a “one family, one judge” system where family and criminal proceedings are combined to avoid victims having to relive traumatic experiences on multiple occasions. Judges will be authorised to ban abusive ex-partners from repeatedly dragging their victims back to court.

The Ministry of Justice is also to review the pivotal presumption of ‘parental involvement’ in care cases which encourages a child to maintain relationships with both parents, unless involvement of a parent is deemed to put the child at risk. The review will examine whether the correct balance is being struck between the risk of harm to children and their right to have a relationship with both parents.

Sir Andrew McFarlane, President of the Family Division of the High Court in England and Wales, said: “We are keen for judges to be fully involved in trialling reformed processes for family cases which involve allegations of harm. We hope that Parliament will be able to allocate the recommended resources which are identified by the MoJ expert panel as necessary to implement the proposals. “

Family Court Judges To Be Given Power to Intervene in Domestic Abuse cases

HM Treasury has issued a further Direction on the operation of the Job Retention Scheme from 1 July 2020.

The guidance confirms the approach to new applications for furlough grants as set out in the Government’s guidance updated on 12 June. The Treasury guidance confirms that employers and employees will have to reach agreement on flexible furlough arrangements (which can operate from 1 July) and that the agreement must be made and confirmed in writing and copies retained by the employer until at least 30 June 2025.

The new Direction provides considerable guidance as to how employers should calculate the amounts that can be claimed under the Scheme for employees and workers who work part time on flexible furlough between July and October.

https://www.gov.uk/government/publications/treasury-direction-made-under-sections-71-and-76-of-the-coronavirus-act-2020

New Treasury Direction on the Coronavirus Job Retention Scheme

The Government is facing another attempted legal action over its handling of the Pandemic.

This latest case is being pursued by Dr Minesh Talati, a dentist from London, and represented by GunnerCooke LLP, and arises after his father Navin, an NHS pharmacist for more than 45 years, died from coronavirus in April. The Daily Telegraph identified that the family of an NHS pharmacist who died from COVID-19 is lodging a civil claim alleging that health secretary Matt Hancock and Public Health England breached their statutory duty in key decisions made about the spread of COVID-19 in the UK. Court proceedings will apparently allege that the health secretary breached both the Human Rights Act and the NHS Act 2006, including “by pursuing policies such as herd immunity” which the letter before action claims is “a flagrant violation of the state’s responsibilities to its citizens”. The letter before action also claims that “The Secretary of State failed to take such steps as were plainly appropriate for protecting the public ……… Accordingly, in all the circumstances, the State failed to take the steps that could reasonably be expected of it to safeguard the lives of its citizens………and …..The Secretary of State did too little, too late, and continues to be in breach of these obligations.” It is reported that “having taken advice from leading Queen’s Counsel on the subject, it is contended that the Secretary of State for Health and Social Care and the executive agency, Public Health England have acted in a way which is incompatible with Convention rights." The letter before action also claims that “Given the lives at risk and that Parliament is unable to hold the Government to account at this time, Dr Talati is seeking the intervention of the Courts.”

Dr Talati is reported to have said: “My own family has been ripped apart and so many families have lost loved ones having been infected in the community. Many families have lost heroes that tried to save our lives………We, as an island nation, have endured the second highest mortality in the world and highest in Europe even though we started well behind Italy and Spain. I ask myself, what went wrong?”

To date, the Department for Health and Social Care has not commented.

Another Legal Attempt To Challenge DHSC

The Association of Pandemic Lawyers (PanLaw) has formally launched.

PanLaw was formally launched by way of a press release on 12 June 2020.

Online articles about the launch and the aims of PanLaw have appeared in the Law Gazette and the New Law Journal.

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