Civil Litigation and The Recovery of Money Lost to Fraud

There has been a 40% increase in money lost by Canadians to fraud between 2021 and 2022, according to the Canadian Anti-Fraud Centre.

In the last year, the Centre reported a total of $530 million in losses, representing an all-time high. This is despite the fact that generally only between 5-10% of people report fraud.

It is common for people who have been the victims of fraud to go to the police and file a complaint. The police then commence an investigation and decide whether they want to lay charges. The victim of the crime may be consulted, but at the end of the day the victim does not get to decide whether charges are laid.

If the police decide to lay charges against an accused fraudster, the matter is then handed over to government prosecutors and the case makes its slow way through the courts.

Fraud Criminal Prosecutions

While an accused fraudster may be criminally charged, the victims of the fraud largely have no say in the manner in which it is prosecuted – except perhaps at the late stage of sentencing. In many cases, victims have to actively seek out information about a criminal prosecution to understand how the matter is proceeding.

There is also no guarantee that victims will recover the money that they have lost. While a court may order an person guilty of fraud to pay back their victims, recovering the funds can be a very difficult and uncertain process. Where there are multiple victims, there may also be competing interests at stake which may delay a victim’s priority in receiving compensation.

This is why a civil lawsuit for allegations of fraud can be a useful tool in securing compensation for victims.

Civil Lawsuits

With civil lawsuits, the victim has the power to directly initiate litigation against the perpetrator. They have the power to directly negotiate with the perpetrator’s lawyers and seek compensation for their losses. They have full say in the way the civil litigation is prosecuted and to potentially work out a settlement that ensures that they are reimbursed, which can be far more expeditious and immediate than waiting for a criminal proceeding to conclude. If no settlement is reached, then the victim can pursue the matter through the courts in their own way and seek their remedies.

In pursuing such litigation, one needs to remain mindful of not using the criminal process to advance a civil proceeding. However, a criminal prosecution generally does not automatically prevent a victim from bringing their own civil lawsuit against the perpetrator.

As fraud becomes more prevalent in Canada, and as advances in technology create new ways in which individuals can commit frauds upon people, more people are turning to civil litigation as a means of recovering what they have lost.

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