WHEELING and dealing are part of Hong Kong's way of life. Cheating and fraud should not be. Unfortunately, as victims of fraud have sometimes found to their cost, the law does not always give the protection it should. The definition of fraud is vague and the burden of proof can be onerous. Absurdly, a fraudster who acts alone is guilty of no crime, unless his activity can be categorised as theft: the law simply fails to recognise his existence. Two or more people acting together can be charged with conspiracy to defraud, which further complicates the picture. It is illogical that a crime which does not exist when one person acts alone becomes unlawful as soon as more than one person has agreed to commit it.
To correct these anomalies, the Law Reform Commission (LRC) has proposed the introduction of a substantive offence of fraud, and with it a definition drawn more precisely than the previous broad definition based on dishonesty. To suggest this proposal is long overdue is not so much a criticism of the Government as a recognition of the haphazard way in which the Common Law has developed.
English law is similarly deficient and subject to the same criticisms. The commission's decision to study problem independently of its English equivalent, and its devising of solutions slightly different to those adopted in other Common Law jurisdictions where an offence of fraud exists, show some initiative.
However, the frequency of apparently fraudulent activity in Hong Kong makes urgent the introduction of a clearer legal framework for prosecution. A KPMG Peat Marwick survey of the top 1,000 companies last year found 34 per cent of respondents were aware of frauds within their organisation during the previous 12 months. In the run-up to 1997, many businessmen fear the temptation to make a quick and dishonest buck may be overwhelming.
Over the next eight weeks, the public has a chance to comment on the LRC's proposals. The business community's initial reactions suggest the debate will be constructive. That is good. Hong Kong badly needs the assurance that the rule of law is also the rule of logical law. The present legislation is inadequate to the needs of a modern, commercial society and to the protection of individuals.
The swift passage of anti-fraud legislation will help drag the law into the modern era and enhance the territory's reputation as a centre of honest business and commerce.