EDMONDS MARSHALL MCMAHONPRIVATE PROSECUTION SPECIALISTSCFLA 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

Why privately

prosecute?

Significant deterrent

effect

Publicity

Are they worth it?

Civil proceedingsExtensive

powers of criminal court – bail, passport

renewal, witness

summons

Greater resources

Compensation/ Confiscation

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)

Litigation Fraud• UK: A world litigation centre?• Typically commercial disputes such as JV fraudReputational Management• Typically HNW individuals desiring an

aggressive approach in a “high stakes” situation• Blackmail• False Rape Allegations

Why more popular?Litigation Fraud & Reputational Management

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

Review of evidence

and advice on charges

Evidence gathering/Instructing investigators/experts

Code for Crown

Prosecutors Test

Laying an Informatio

nObtaining 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

TrialSentence

Compensation/costs

How?

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

CostsProsecution 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 – convicti

on or acquitta

l.

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 threatb) 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 McMahonSolicitor/Director

• katemcmahon@emmlegal.com• 5/6 Crane Court, London EC4A 2EJ• Phone: 020 7583 8392 • Our Email: enquiries@emmlegal.com