The risks and penalties of money laundering for charities and how to guard against it
Private prosecutions - What should fraud victims do when law enforcement agencies fail to act?
The annual cost of fraud losses in the UK could amount to as much £193 billion according to the Annual Fraud Indicator 2016. However, according to a report issued earlier this month by the Centre for Counter Fraud Studies fewer than 2 per cent of people who are caught carrying out the fraud are being taken through the traditional criminal justice system. These shocking figures provide some explanation as to why fraud victims are increasingly turning to private prosecutions to see offenders brought to justice.
What is a private prosecution?
A private prosecution is a criminal prosecution brought by someone other than the traditional state prosecuting authorities. In England and Wales the Prosecution of Offences Act 1985 allows any person to commence a prosecution in the criminal courts.
Why would fraud victims commence a private prosecution?
The traditional state prosecuting authorities have suffered substantial cutbacks in recent years and as a consequence they no longer have limitless resources to dedicate to certain types of crime.
The Centre for Counter Fraud Studies report highlights that police and the CPS simply do not have the capacity to deal with all fraud related cases. The research has highlighted that across the UK only around 650 police staff are dedicated to financial crime (excluding financial investigation) which amounts to less than 0.03 per cent of total police staff.
Increasingly, our clients tell us that when they report fraud to the police they seemingly lack the capability or capacity to take action. In such circumstances a private prosecution may be the only avenue for the fraud victim to take to bring the offender before the criminal justice system.
What are the main differences between public and private prosecutions?
Private prosecutions are to all intents and purposes the same as public criminal proceedings but they do entail some complexities and considerations that need to be understood from the outset.
When the traditional law enforcement agencies investigate and prosecute a fraud offender the cost of that legal action is borne by the State.
When conducting a private prosecution the prosecutor must have sufficient funds to pay for the litigation from beginning to end. Cost considerations will understandably deter some victims from launching on a private prosecution. However, at the conclusion of the proceedings it is possible for the prosecutor to recover a substantial part of their legal costs from Central Funds. Accordingly, if the prosecutor has the means to fund the litigation upfront, then provided they have responsible lawyers acting on their behalf, they should be able to recoup a significant proportion of their legal expenses at the end.
The traditional law enforcement agencies have powers of evidence gathering available to them that are not available to the private prosecutor.
Private prosecutions are therefore most suited to cases where the evidence is either already in the possession of the prosecutor or is known to be accessible by them or a private investigator. If evidence is still to be obtained it is most important that the prosecutor obtains advice, from lawyers with expertise in this field, at an early stage on the methods by which evidence may be obtained in order for it to be rendered admissible for subsequent criminal proceedings.
When the fraud victim reports a crime to the police they have no control over the legal team who will be assigned to prosecute the case.
In a private prosecution the prosecutor has total power to choose the legal team they want to act on their case. The lawyers acting on behalf of a private prosecutor have an overriding obligation to act as a dispassionate ‘Minister of Justice’. Ultimately it is their duty to ensure that the investigation and prosecution is conducted in such a way to ensure that the offender will be afforded a fair trial. Accordingly, it is most important that the prosecutor engages lawyers who understand these vitally important duties and acts in such a way to comply with them.
Melinka Berridge heads up the Private Prosecutions team at Kingsley Napley. The team helps individuals, corporates and organisations to assess whether their cases are suitable for civil or criminal litigation and supports victims to secure justice in circumstances where the traditional state prosecution authorities have refused to act.
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