Worldwide, fraud accounts for over $4.7 trillion in losses annually, according to a 2022 report by the Association of Certified Fraud Examiners.1 A civil lawsuit involving fraud doesn’t focus on proving guilt and convicting the defendant. It may even focus on a party other than the defendant used to engage in fraudulent activities. While the goal is simply the repayment of damages rather than punishing someone, having a civil fraud attorney will ensure you’re paid back in full regardless of the nature of the fraud.
What Is Civil Fraud?
In general, fraud involves using information or some other resource to engage in the theft of money or data. It is a deliberate deception intended to benefit the perpetrator. Fraud, rather than being categorized as a physical act, is conducted on the basis of misrepresentation.
An act that is considered fraud must incorporate these factors:
- A fact was misrepresented.
- The perpetrator knew the information presented was false or was reckless about its truth.
- Their intention was to gain the victim’s trust.
- The victim believed and was harmed by the misrepresentation.
California law requires proof a defendant intended for the other person to rely on the misrepresented statement and that the other person did rely on it. They must have also been harmed by this reliance, which was a substantial factor in causing the loss claimed.
How Does a Fraud Lawsuit Work?
Criminal fraud must be proven beyond a reasonable doubt and being convicted by a jury can result in fines and jail time. A personal attorney can handle a civil fraud case. There’s a much lower burden of proof and the goal is to reimburse the victim for losses they sustained as a result of the crime.
A fraud case can involve different variables and degrees of guilt. Some lawsuits may claim negligent misrepresentation took place; others may claim concealment, non-disclosure, or a false promise. If a person misrepresented a fact, they must have been fully aware they were doing so. A seller can also be guilty of fraud for concealing a fact that would have deterred the buyer from making a purchase.
Elements of a Civil Fraud Case
A civil fraud attorney is familiar with handling private party disputes. The plaintiff initiates the case rather than a regulatory authority bringing about proceedings. Your lawyer must prove the damage occurred (in criminal fraud cases, the intent to harm someone is all that’s needed to convict). Nonetheless, your case needs to be stronger than the other side’s and exceed a 50% threshold (otherwise known as “preponderance of the evidence” or “balance of probabilities”).
As we’ve stated, a civil fraud case aims to recover monetary compensation on the victim’s behalf. Litigation often only goes so far as both sides’ success in negotiating. Penalties can play in but their nature depends on the severity of the fraud and/or crime, while punishments can vary depending on state law.
Types of Misrepresentation
A civil fraud attorney can also factor in the nature of misrepresentation, such as:
- Misrepresentation of Fact: A statement suggesting a fact was true or accurate but was false (in other words, a lie).
- Intentional Misrepresentation: A statement made orally, in writing, or implied by conduct or behavior; its content is less important than how the statement was made.
- Purposeful Misrepresentation: A statement must be willful, made purposely, and with the intent to deceive; the defendant must have known the statement was false.
An attorney can determine whether a false statement was intentional or made accidentally. It must be intentional to be an act of fraud. However, a statement made negligently that a plaintiff relied on can be the basis for a fraud case, although is considered less serious. Attorneys can also differentiate facts from opinions, which generally cannot be the basis for a lawsuit in California (although the state ultimately decides the severity of a fraud case). An expression of opinion usually doesn’t constitute a misrepresentation.
Hire a Civil Fraud Attorney When Harmed Financially by Another’s False Representations
Civil fraud is common and filing a fraud case can be complicated. You need an attorney who is familiar with state law and experienced in getting victims compensated. At OakTree Law, we provide various law services in Los Angeles to help deal with financial, real estate, insurance, and other matters. We specialize in business and civil litigation as well. Our business civil litigation specialists can help in misrepresentation and fraud cases. Request a free evaluation online or call 888-348-2609.