The rise of the private prosecution

David Pack

Partner

0207 880 4407

Michael Lewis

Associate

020 7880 4399

"The more things change, the more they stay the same”, despite recent announcements of an increase in justice spending, a sticking plaster to a failing system, never has this been truer than the UK’s crumbling Criminal Justice System. Chronically underfunded and under resourced, the police and the CPS are unable to stem the tide of financial/business fraud particularly involving cryptocurrency and complex offshore investment structures. For more serious high value cases, unless the fraud is £100m plus and involves a UK PLC, do not expect the Serious Fraud Office to come to the rescue. Companies and private individuals affected by financial/business crime have no alternative but to seek redress against perpetrators through a private prosecution.

Who Can Bring a Private Prosecution?

Section 6(1) of the Prosecution of Offences Act (POA) 1985 preserves the right of individuals to bring private prosecution, with the following limitations:

  • the Director of Public Prosecutions (DPP) has power under section 6(2) POA 1985 to take over a private prosecution.
  • the private prosecutor must seek the consent of the Attorney General or of the DPP before the commencement of proceedings in certain situations.

The Crown Prosecution Service (CPS) will be forced to consider whether or not to (i) let the prosecution continue without the involvement of the CPS, (ii) take over the prosecution and continue it, or (iii) take over the prosecution and drop it. When the CPS is asked to review the private prosecution the decision taken must confirm policy has been followed and endorse/ratify its decision in writing.

The decision of the CPS to prosecute is based on a two-stage test: (i) is there enough evidence and (ii) is it in the public interest to prosecute? There exists a growing frustration at the failure of the CPS to neither investigate financial crime and/or once a investigate is commenced, deciding against prosecution. Where public outrage has followed this has forced the CPS to reopen/commence a prosecution but where the offence is one of a financial/business nature, against a public company or private individual, it is rare for there to be public outrage and no political driver for the CPS to involve itself, the phrase often repeated, “it’s a civil matter” or simply deathly silence from Action Fraud. Whilst the frustration is warranted, it is unfair to blame the CPS. The CPS is chronically underfunded and under resourced, such frustration should not fall at the feet of the CPS.

In practice, Devonshires is seeing is a growing body of private prosecutions by frustrated companies and individuals seeking justice on financial/business crime matters.

Advantages/Disadvantages of Private Prosecutions

  • Speed and Priority: A private prosecution may progress faster than cases taken on by public agencies, which often face significant caseloads. Additionally, by initiating a private prosecution, the complainant can ensure that their case receives focused attention, avoiding the delays that can arise when relying on overburdened public resources.
  • Control and Input: Private prosecutors have significant influence over the course of their cases, including setting the pace of investigation and shaping the issues to focus on. This autonomy allows the complainant to prioritise evidence and arguments that directly support their case.
  • Outcome and Deterrence: Successfully prosecuting a case can result in the same penalties as a state-initiated prosecution. This includes securing convictions, compensation orders, and confiscation orders. Moreover, a successful private prosecution sends a deterrent message, reinforcing the risks of similar offenses.
  • Cost Recovery: Any litigation is expensive, however, the costs of a private prosecution are potentially recoverable from the convicted party or, from central government funds, irrespective of whether the private prosecutor wins or loses the case.
  • Cost Risk: A private prosecutor who does not properly discharge their duties to the court is at risks of a wasted costs order under section 19A of the Prosecution of Offences Act 1985, a warning against all private prosecutors.
  • Disclosure: A central consideration is the requirement for private prosecutors to meet disclosure standards, ensuring that all relevant evidence—whether supporting or opposing the prosecution—is shared. This is crucial for maintaining fairness in the proceedings.

A word of warning for all would be private prosecutors, the same standards of conduct as a public authority, including a duty of full and frank disclosure, must be maintained by the private prosecutor. The integratory of the private prosecution proceedings against misconduct will be rigidly enforced by the courts throughout the process.

Key Legal Considerations and Protections

Before a private prosecution is started, practitioners must give consideration as to whether the Full Code Test has been met. Does sufficient evidence exist for a realistic prospect of conviction and does the prosecution serve the public interest? A private prosecutor must test that the evidence available is sufficient to the criminal standard to ensure that evidence is reliable and credible to meet a “realistic prospect of conviction”. This presents a number of challenges for private prosecutors who lack the resources and powers that the police and other public bodies have when investigating financial/business crime. In practice, private prosecutors are bringing prosecutions without the same resources/powers, but with successful outcomes.

Practical Steps and Procedure

Initiating a private prosecution begins with filing for a summons in the magistrates’ court, where the complainant must show that the case meets necessary criteria. Evidence plays a pivotal role, and the prosecutor bears the responsibility of gathering it, including witness statements and documentation relevant to the case. In certain situations, private investigators or legal orders may be used to obtain evidence, particularly when sensitive data is needed.

Once the court issues a summons, the private prosecutor must continue to meet legal standards, including the duty to disclose material that could affect the fairness of the trial. Costs related to evidence gathering and legal representation can be high, making it essential to weigh these against potential outcomes.

Challenges and Limitations

Despite their benefits, private prosecutions carry challenges. Financial costs are often significant, and cost recovery is not immediate, ensuring cash flow is carefully managed until a payment out of central funds is ordered. Moreover, the private prosecutor is held to high ethical standards, as any appearance of malice or bias could result in claims of malicious prosecution. The Court will expect civil proceedings to have also been commenced which adds additional challenges. Proper legal guidance and adherence to established practices are essential to mitigate these risks.

Asset Recovery

Private prosecutors can seek financial redress if successful. Under certain conditions, a court can issue confiscation and/or compensation orders to recoup losses incurred. Restraint orders, which prevent defendants from disposing of assets, may also be sought to ensure financial stability for any potential recovery.

Conclusion

Private prosecutions offer companies and private individuals a valuable alternative to the UK’s chronically underfunded Criminal Justice System and a route to pursue justice when public resources are insufficient, unavailable or simply unwilling to act.

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