The rise of the private prosecution
Private prosecutions are cheaper and more effective, argue Kate McMahon and Tamlyn Edmonds
Private prosecutions are a constitutional right in the UK, enshrined in statute.
In England, they have been described by Lord Wilberforce thus: “The individual, in such situations, who wishes to see the law enforced has a remedy of his own: he can bring a private prosecution. This historical right which goes right back to the earliest days of our legal system… remains a valuable constitutional safeguard against inertia or partiality on the part of authority.”
Companies, individuals and charities which have fallen victim to offending are often further frustrated by state inertia or partiality. Significant media attention focusing on inadequate devotion of state resources to fraud investigations and prosecutions, and admissions made by police regarding resourcing, have meant a significant rise in private criminal actions.
Private prosecutors also utilise the draconian confiscation regime under which a fraudster serves prison time for failing to pay a confiscation debt. Private prosecutions are increasingly used to tackle economic or large-scale crime that have not been prioritised by law enforcement.
A recent report on the effectiveness of the City of London Police, found that fraudsters “operated with impunity” in the UK, with fewer than 1 per cent of police officers directly investigating fraud. Fraud accounts for one in three crimes committed in the UK, with people more likely to fall victim to fraud than any other offence.
Despite 2,000 reported fraud offences being committed, only 50 are prosecuted. In the last 12 months, fraud reporting jumped by 500,000 cases. This is a rise of 15 per cent (while other crime generally remained static). There are a number of advantages to private prosecutions:
They are typically cheaper than civil litigation – Also, where a matter is properly brought and conducted, a proportion of the prosecution costs can be claimed back from central government funds rather than seeking costs from an insolvent defendant.
Prosecutions are an effective deterrent – This is particularly so in fraud cases. The criminal courts have powers to impose sanctions, including terms of imprisonment and disqualifications from holding directorship positions. A criminal record will result upon conviction. Strict bail conditions such as travel bans and the confiscation of travel documents are available. A defendant can also be deprived of the benefits of their crimes through criminal confiscation.
Criminal restraint orders – These can be obtained pursuant to the Proceeds of Crime Act 2002 to restrain the defendant from dealing with their assets worldwide. A restraint order is onerous and normally includes significant disclosure obligations. It remains in place until a confiscation or compensation order is satisfied. If the defendant breaches any aspect of the order they may be liable for contempt of court and face imprisonment.
Criminal confiscation orders – These can follow a conviction, removing all financial benefit obtained by the defendant from their offending. A court may also make a compensation order requiring payment to the victim. If an order is not paid in full, the defendant can serve additional time in prison (the default prison term for £1m is a maximum of 14 years). A receiver may also be appointed over the defendant’s assets to liquidate them for the satisfaction of any compensation and confiscation order. Some gifts made by the defendant can also be confiscated.
Private prosecutors can retain greater control of a case – A private prosecution follows the same process as a case prosecuted by the state. However, the victim will not have to wait for the police to have an officer allocated nor for the Crown Prosecution Service (CPS) to approve police actions. They can also instruct experts early to properly evidence the case. In fraud cases, saving time often means locating the money.
In times of straightened government resource, particularly after covid-19 spending and the inevitable fraud spike which will occur in times of recession, the courts are highly likely to see a sharp increase in private prosecutions brought by fraud victims.
Tamlyn Edmonds and Kate McMahon are partners at Edmonds Marshall McMahon emmlegal.com
