Written evidence from Mr Jamas Hodivala QC, Matrix Chambers (PPS0002)

 

Private prosecutions

 

  1. I am grateful for the opportunity to make representations to this consultation on the fairness of private prosecutions. I am a barrister who specialises in defending business crime proseuctions. The private sector has responded to the demise of the public sector in the criminal justice system. Whilst I believe that is not necessarily a bad thing, I do have some concerns about the commercialisation of prosecution work in this area.

 

  1. I have experience defending two companies in a private prosecution brought on behalf of Apple, Inc. and feel able to comment on the issues raised from an informed perspective. In my case, both companies were eventually acquitted when the CPS decided to take over the conduct of the prosecutions and offer no evidence. However, it took a lot of time and costs to arrive at that position, which is a subject that I would like the Committee to examine particularly carefully if possible.

 

  1. As identified in Gujra v CPS [2013] AC 484 at [116], private prosecutions provide an important safeguard against feelings of injustice arising from the state’s failure to bring criminal proceedings. There are recent examples of successful private prosecutions resulting in convictions where the police and CPS have failed to prosecute (e.g. Allseas Group SA v Sultana (2018) prosecuted by solicitors firm Mishcon de Reya in relation to a €100m investment fraud). Given the financial and resource constraints on the public sector, the private sector should be encouraged to provide justice to those victims who may have been failed by the state’s prosecuting authorities.

 

  1. This is reinforced by the high threshold for successfully judicially reviewing a decision not to prosecute. Such a challenge will only rarely be granted (see L v DPP [2013] EWHCV 1352):
    1. Where the CPS policy is unlawful;
    2. Where the DPP has failed to act in accordance with policy; or
    3. The decision was perverse.

 

  1. In that context, it can be seen that the right to bring a private prosecution is a very important safeguard that should remain open to individuals.

 

  1. However, I would like to make various observations about the legislative scheme behind private prosecutions and some practical observations:

 

  1. Concurrency of civil and criminal claims: whilst it may be abusive to mount a private prosecution that is motivated by external considerations, such as purely in order to assist existing or prospective civil proceedings (R (G) v S and S [2017] EWCA Crim 2119) the abuse jurisdiction has become a notoriously high hurdle to overcome. It is regularly cited as being an “exceptional remedy” and even deliberate circumvention of mutual legal assistance procedures by the state was held not to be abusive in Warren v AG for Jersey [2012] 1 AC 22.

 

  1. The danger is that commercial motivation for bringing a private prosecution is very difficult for a defendant to prove, absent disclosure by the prosecutor of inculpatory material. As LPP would probably apply to such material, as it would often involve legal advice given by any law firm assisting the company to bring a private prosecution, there is little prospect of such evidence existing even where the motives of a large corporate are precisely those forbidden by the case-law.

 

  1. Whilst the civil courts have a discretion to stay civil proceedings where there are outstanding criminal proceedings, the hurdle is high: Bittar v FCA [2016] UKUT 265.

 

  1. I think there needs to far greater legislative control on the ability of a private company to bring a private prosecution in tandem with civil proceedings. Large companies are readily able to exert huge economic pressure on smaller companies or individuals by bringing civil and criminal proceedings in tandem, with a view to settling the civil proceedings on favourable terms. Small companies or individuals are often disadvantaged by limits on their legal expenses insurance and there is something deeply unsavoury about allowing a company to use a combination of civil and criminal proceedings to apply commercial pressure on a defendant.

 

  1. Interview of defendant: There are no doubt many cases where a private prosecutor invites a defendant to attend for interview in order to be given an opportunity to explain any perceived criminality. However, I have personal experience of a serious allegation of corporate fraud and intellectual property crimes being levelled against companies where the companies had a perfectly reasonable defence but were never invited to an interview to comment on the evidence, or make pre-charge representations. That resulted in large amount of costs being incurred defending proceedings in correspondence and court hearings, as well as the expense of persuading the CPS to take over the conduct of the prosecution, which it eventually did a few days before trial and decided to offer no evidence. The private prosecutor then attempted to judicially review the CPS’ decision to drop the case, again resulting in the defendant companies incurring further costs as an interested party in those proceedings.

 

  1. The Private Prosecutors’ Code does not require a private prosecutor to give a defendant any opportunity to respond to the allegations before applying to issue a summons. This results in the possibility that the first time that a defendant knows that he is alleged to have broken the law is when he is summonsed to court to attend for a first appearance. Whilst that may be an acceptable approach in minor road traffic matters, it is completely unacceptable for anything more serious. Such an approach  enables a private prosecutor to close its eyes and ears to anything that undermines its case when applying the Full Code test.

 

  1. Costs in criminal proceedings: this is a complete shambles at the moment. I consider that the inequality between a private prosecutor’s ability to recover its costs from central funds (even if unsuccessful or the case is taken over by the DPP) and a corporate defendant (even if acquitted) is currently one of a long list of obvious injustices in the criminal justice system. The disparity is probably one of the central issues that I would like the Committee to attempt to resolve.

 

  1. Save for two limited exceptions, a company is unable to recover any of its legal costs if it is acquitted of criminal charges: see s.16A of the Prosecution of Offences Act 1985.

 

  1. However, a private prosecutor is entitled to all or part of its reasonable costs from central funds: see s.17 of the Prosecution of Offences Act 1985

 

  1. In addition, the private prosecutor is entitled to claim payment of its just and reasonable costs by a convicted defendant: and 18 of the Prosecution of Offences Act 1985

 

  1. The only circumstances in which a private prosecutor may not recover its costs and/or a defendant may recover its legal costs is if the private prosecutor has acted “unreasonably”, “improperly” or “negligently” (i.e wasted costs against a legal representative pursuant to s.19A of the Prosecution of Offences Act 1985) or the defendant has incurred costs as a result of an unnecessary or improper act by the prosecution: s.19 of the Prosecution of Offences Act 1985.

 

  1. I know from personal discussions with private prosecutors that the low costs risk is viewed as an economic incentive to bring a private prosecution. This imbalance in the costs regime is disgraceful and has opened up the risk of abuse by large corporations with deep pockets.

 

  1. Commercial relationships: The final concern that I have is that various private prosecutors are tendering for prosecution work on behalf of big organisations. One area for such tendering is Intellectual Property enforcement and protection for big brands. TM Eye is an investigative agency that focuses on gathering evidence of IP breaches on behalf of big brands, and then passes the evidence on to law firms to conduct the private prosecutions. Private prosecutors tender to TM Eye to prosecute all of their cases.

 

  1. This has the unsavoury effect of the decision to prosecute being influenced by commercial contracts. In the case that I defended, TM Eye claimed in the related judicial review proceedings that it had a “100% conviction rate”. Whatever the true position may be, there is plainly commercial pressure on a private prosecutor to secure a conviction.

 

  1. In R v AB [2017] 1 WLR 4071 the Court of Appeal stated that it would be “inimical to justice” to allow a parallel prosecution service to develop in areas that were lucrative to prosecute. By allowing tendering for lucrative prosecution contracts on behalf of big, powerful brands, the current legislation lends itself to a perception amongst defendants that decisions to prosecute (and maintain the prosecution) are now governed by conviction rates and commercial pressures, rather than the private prosecutor acting as an administrator of justice.

 

June 2020