DMONDS MARSHALL MCMAHON
RIVATE PROSECUTION SPECIALISTS
LA 21 September 2015
CFLA OVERVIEW
• What are private prosecutions & when are
they best used?
• Can we privatise criminal litigation? Why
are companies and high net worth individuals
choosing not to report crimes to the police or
the State prosecutor?
• How does a private criminal prosecution
run in tandem with civil fraud proceedings?
Private Prosecutions: What are they?
•
Any Prosecution not brought by the Crown. Considered to be a “constitutional right” in
the UK.
•
A private prosecution can be started by any private individual, victim, interested party,
charity or company - such a right is preserved by section 6(1) Prosecution of Offences
Act 1985.
S.6 Prosecutions instituted and conducted otherwise than by the Service
(1) Subject to subsection (2) below, nothing in this Part shall preclude any person from
instituting any criminal proceedings or conducting any criminal proceedings to which the
Director's duty to take over the conduct of proceedings does not apply.
(2) Where criminal proceedings are instituted in circumstances in which the Director is not
under a duty to take over their conduct, he may nevertheless do so at any stage.
•
•
Prosecutions are now regularly brought by Companies & Individuals in the UK
The Court of Appeal’s latest judgment on private prosecutions and confiscation gives
the green light to private prosecutors to utilise the draconian Proceeds of Crime Act
2002 which was enacted to strip criminals of their ill-gotten gains and allows for
powerful and effective financial punishment of offenders: R (Virgin Media Ltd) v Zinga
[2014] EWCA Crim 52
Significant
deterrent
effect
Compensation/
Confiscation
Publicity
Why
privately
prosecute?
Greater
resources
Extensive
powers of
criminal court –
bail, passport
renewal,
witness
summons
Are they
worth it?
Civil
proceedings
Why more popular?
CURRENT UK FRAUD TRENDS
• University of Portsmouth’s Centre for Counter Fraud Studies
estimated that 98.5% of fraud cases go unreported to the police,
and of the 1.5% that are reported, only 0.4% result in a criminal
sanction (2013).
• Worrying, as in 2013, over 221,000 frauds were recorded which
equates to over 600 frauds every day.
• Private Sector Fraud considered to be £21.2 billion Annual Fraud Indicator (AFI) 2013
• Public Service: Every year in the UK, fraud costs public services an
estimated £31 billion (Cabinet Office Statistics, 2015)
• Social Commentary: The growing trend for private criminal
prosecutions has raised concerns about the prospect of a “two-tier”
justice system, with some cases reaching court only because the
victims – often corporations – can afford to pay the substantial
costs: “Two-tier justice: Private prosecution revolution” Saturday 16 August 2014, The Independent.
Will there be a privatisation of
Criminal Prosecutions?
• Houston, we have a problem!
• CPS:“CPS under fire from judges as its ranks are cut by a
third since 2010: The complaints come as the CPS faces staff
and budget cuts.” Rough Justice, April 15, 2014
• Work by the Bureau of Investigative Journalism found that
the CPS legal teams have been cut by 31% since 2010.
Higher court advocate numbers were slashed by 44%, and
the number of barristers reduced by 27% since 2010.
• Police: “Conservative cuts to crime and police budgets put
us all in danger” The Statesman, 20 July 2015,
• Fraud was up by 17 % in the latest policing figures and
17,000 police officers have been cut over the last five years.
Slow Shift in Government Position?
COLP
• The ​Dedicated Cheque and Plastic Crime Unit (DCPCU) is a special police
unit comprising police officers drawn from the City of London and
Metropolitan Police forces; The unit is fully sponsored by the banking
industry, and supported by bank investigators and case support staff who
have an ongoing brief to help stamp out organised card and cheque fraud
across the UK.
• The Police Intellectual Property Crime Unit (PIPCU) is being funded by the
Department for Business, Innovation and Skills and run by the City of
London Police to combat this criminality, with a special focus on offences
committed online.
• The Insurance Fraud Enforcement Department (IFED) is a specialist police
unit dedicated to tackling insurance fraud and is committed to addressing
high volume and organised criminality in insurance. It is funded by the ABI
(Association of British Insurers)
• COLP working group: Secured Funding for 2015: Civil and Criminal (public
and private)
Why more popular?
Litigation Fraud & Reputational Management
Litigation Fraud
• UK: A world litigation centre?
• Typically commercial disputes such as JV fraud
Reputational Management
• Typically HNW individuals desiring an aggressive
approach in a “high stakes” situation
• Blackmail
• False Rape Allegations
Types of cases
• Fraud: Research carried out by the University of Portsmouth’s
Centre for Counter Fraud Studies in 2013 showed that an
estimated 98.5% of fraud cases go unreported to the police,
and of the 1.5% that are reported, only 0.4% result in a
criminal sanction.
• Perverting the course of justice: Lies told in proceedings, false
witness statements, false allegations of crime.
• War crimes/crimes against humanity: International Criminal
Court Act 2001. Consent required.
• Environmental crime: Conspiracy to commit criminal damage.
• Bribery/corruption: Bribery Act 2010. Consent required.
• Money laundering: Proceeds of Crime Act 2002; Jurisdiction
• Harassment: S.2 Protection from Harassment Act 1997
• Counterfeiting: S.92 Trade Marks Act 1994
Where else can I use this option?
• Most common law countries such as
Australian, New Zealand & Canada.
• Some South American jurisdictions,
particularly used in IP Law
• Some states in the US (prohibited by Federal
Law but can occur in some States under State
offences)
• Thailand: there can be a public or victim
prosecution
How?
Review of
evidence
and
advice on
charges
Evidence
gathering/
Instructing
investigators
/experts
Code for
Crown
Prosecutors
Test
Laying an
Information
Obtaining
summons/
arrest
warrant
Test for
summons:
offence
known to
law, prima
facie
ingredients
of offence
met, offence
not out of
time,
jurisdiction,
allegation
not
vexatious
First hearing
Trial
Sentence
Compensation
/costs
Gathering evidence
• Material in the victim’s possession
• Witness statements
• Information held by 3rd parties – DPA 1998 exemptions
• Section 29 – Prevention or detection of crime
• Section 35(2): -legal proceedings; obtaining of legal advice, establishing,
exercising or defending legal rights BUT • Schedule 2 reason required: data subject given consent, or processing
necessary for a legitimate interest.
• During proceedings – witness summons (CPR 28)
• Material held by police – SLA’s/MOU’s
• Evidence from outside jurisdiction
• Experts
Confiscation & Changes in Public &
Private Interaction
• Court of Appeal’s latest judgment on private
prosecutions and confiscation – R (Virgin
Media Ltd) v Zinga [2014] EWCA Crim 52
• The Proceeds of Crime Act 2002 and the
available tools
• How does a freezing order compare to a
criminal restraint order?
Civil Litigation & Criminal Litigation
• A criminal conviction is persuasive evidence in a civil
case. And if run in tandem, criminal and civil
proceedings can be very effective. For example: Early
obligations to disclose.
• The same investigation can be used for both civil and
criminal litigation. Civil Search orders can be used.
• A great arsenal is available: For example, an injunction
could be applied for in the civil court to halt behaviour
which will be the subject of a criminal prosecution.
• Consideration of the best benefits of both jurisdictions
is important: i.e. injunctions & bail
Civil Litigation & Criminal Litigation
Plan early to take advantage of civil law, for example, draft a search
warrant application considering the advantages for both civil and
criminal matters.
Make sure requests for international assistance clearly state how you
might use material.
Think about what powers of compulsion a court may have (be it civil
or criminal; banking books or company records) and assess which
jurisdiction will provide you with the most useful information;
Beware of the limits of R31.22 of CPR in the UK
Costs
Prosecution
of Offences
Act 1985,
section 17 court may
order the
payment out
of central
funds in
respect of
indictable
offence to
compensate
private
prosecutor
for any
expenses
incurred by
them in the
proceedings.
What
amount is
‘just and
reasonable’?
Court can
make an
order for
costs
irrespective
of result –
conviction or
acquittal.
Order should
be made
save where
there are
good
reasons for
not doing so.
Where a
private
prosecution
is taken over
by the CPS
the power of
the court to
order
payment of
prosecution
costs out of
central funds
extends only
to the period
prior to the
intervention
of the CPS.
Pitfalls: Discontinuance by CPS
• A Private prosecution that fails to satisfy the Code for Crown
Prosecutors test risks being taken over (POA 1985 section
6(2)) and discontinued by the DPP – (POA 1985, section 23 &
23A). R (Gujra) v Crown Prosecution Service [2012] UKSC 52
• DPP will take over conduct of private prosecution and
discontinue where either evidential sufficiency stage or public
interest stage of Full Code Test is not met.
• DPP may also take over where prosecution is likely to damage
the interests of justice.
• Remedy – Judicial Review
Pitfalls: Consent
• Consent to Prosecute is Required for Certain Offences
• May be from the AG, Director of SFO, DPP, Secretary of
State, Data Protection Registrar etc.
• Examples of offences that need permission:
• S1 of the Biological Weapons Act 1974
• S9 of the Finance Act 1994 (fraudulent tax evasion)
• Theft Act s30 (theft from spouse)
• Trading with the Enemy Act 1939 s1 (supplied goods,
gave money, performed any obligation on behalf of the
enemy)
Pitfalls: Blackmail
(a) A demand with;
(b) Menaces was made;
(c) The demand was
unwarranted;
(d) At the time of making the
demand, the defendant
made it with a view to gain
for himself or another or
with intent to cause loss to
another.
Defences:
a) Reasonable ground for
making the threat
b) Use of menaces is “proper”
Pitfalls: Disclosure
Private Prosecutors are subject to disclosure a rigorous disclosure regime
S2(3) of the Criminal Procedure and Investigations Act 1996 provides that
references to prosecutor are “to any person acting as a prosecutor
whether an individual or a body”
Duty to retain and record all relevant material which doesn’t form part of
prosecution case. What is ” relevant” material?
Sensitive and non-sensitive schedules
Disclosure test: undermine prosecution case or assist case for accused
Be careful of client behaviour – client MUST be aware of disclosure obligations
Contact Us
Kate McMahon
Solicitor/Director
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•
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katemcmahon@emmlegal.com
5/6 Crane Court, London EC4A 2EJ
Phone: 020 7583 8392
Our Email: enquiries@emmlegal.com