UK & Europe
Regulatory & Investigations
You would be forgiven for the belief that the full resumption of jury trials across England and Wales, alongside a few surplus “Nightingale” courts, would have helped put a dent into the backlog of criminal cases plaguing the courts. There has certainly been little doubt that the additional challenges brought by Covid-19 have hampered efforts to whittle down the nearly 40,000 cases that were awaiting trial as of March 2020. It is little surprise that the latest figures for 2021 now put the figure at over 53,000.
The reality has been that even with a resumption of jury trials, the task for the police, prosecutors, and the judiciary, who all must continue “business-as-usual” is clearly insurmountable. In July 2020, we were witnessing trial dates being pushed back to as late as 2022. The fault clearly cannot be placed at the feet of the pandemic alone; these delays have been compounded by years of cuts on already stretched state resources and there is no indication that there will be any let up from this.
At the opposite end of justice, the global lockdown has let criminals run amok with fraudulent schemes. The City of London Police reported an initial 400 per cent month-on-month increase in fraud-related scams when working from home became the norm, with the true financial losses to businesses and individuals yet to be determined. For the wider insurance market, the Coronavirus represents nothing new. Since 2015, application fraud has had triple digit growth year-on-year with a similar story for point of claim fraud.
There is little novel to these crimes; fraudsters’ methods have certainly not needed to adapt to a Covid-19 world. The potential victims of online and telephone fraud are now abundant in number and susceptible to the same old cons. Across industries, these have taken the form of confidence tricks, such as scammers who pose as HMRC or who impersonate senior employees to authorise external payments, and fraudsters have even preyed on the financial insecurities of businesses and individuals with bogus products and services, amongst a countless number of other tricks.
And yet, the lack of novelty has still allowed these uninspired crimes to further strain an already crippled system. The court backlog inevitably poses problems for the proper administration of justice but, even before the court stage, the police lack the resources to thoroughly investigate new offences to give any semblance of due process. It is unclear how much of this fraud will ever even make it to trial or result in successful prosecution.
The Crown Prosecution Service, understanding the challenges, has kicked serious but non-urgent cases into the long grass. There is no illusion that this is damage mitigation. For those fortunate enough to have their cases investigated and referred to the CPS in the first place, the release of the “Coronavirus: Interim CPS Case Review Guidance” and “Interim CPS Charging Protocol” makes for uncomfortable reading. The CPS has effectively decreed that, at the very best, a long road to justice awaits victims of these crimes.
The unfortunate reality for businesses, too often than not, is that they rarely reach the CPS stage. Their troubles often begin when they have to navigate the remnants of police forces that have faced years of cuts to their operational budgets and who have faced a consequential reduction in investigators and manpower in general. These cuts have led to repeated accusations of disinterest on the part of the police when investigating financial crimes against businesses. The truth is that there has been a reprioritisation of resources towards harm with the reality being that businesses can no longer compete for the attention of state investigators.
Corporations have thus had to adapt. Investment into technology, resilience planning and new internal procedures have helped to stem the flow of opportunists taking advantage. These are also complimented by insurance products that cover cyber and fraud protection but these moves together have not been a silver bullet. The growth of crime has largely scaled with the retreat of the state and the scale of threats faced by companies has meant that fraudsters can act with impunity.
As the state struggles to investigate and prosecute criminals, the answer, for those impatient at the slow roll of the wheels of justice can rest with a private prosecution.
Private prosecutions have only continued to grow in use and appeal since their inception in the Prosecution of Offenders Act 1984. They are also complimented by increasingly robust standards of practice which have attracted corporate victims who are too often spurned by the state and not offered a clear path to trial. Most recently, the Private Prosecution Association’s new Code for Private Prosecutors has given solicitors and barristers key guidelines on integrity and approach, meeting, at worst, the minimum standard of that of a state prosecution.
The strides towards private justice have been inevitable. Lord Thomas in R. v Zinga (Munaf Ahmed) stated that “at a time when the retrenchment of the state is evident in many areas … it seems inevitable that the number of private prosecutions will increase”. Judges have also observed the specific lack of inclination from public authorities to commence action in fraud cases with business victims.
The judiciary as a whole has followed suit in viewing private prosecutions as a necessary part of administering justice. Indeed, the control afforded to victims on the process of the prosecution, the evidence gathering, the avoidance of red tape, and the ability to deter wrong-doers with remedies unavailable in civil courts has made this an appealing avenue for those who seek real action.
These benefits are not new and bodies that have long been conscious of police inaction and who also have had a vested interest in deterrence and justice take it upon themselves to bring their cases. The RSPCA, a well-known patron of private prosecutions, secured nearly 1,500 convictions in 2019 with a self-reported success rate of 93.7%, demonstrably higher than the Crown’s national average from 2018 figures.
The RSPCA is not alone. Regulatory bodies such as the Security Industry Authority have made extensive use of the process, and larger companies which include among them Aviva, DAS, and Virgin Media have been tempted into the process. The attraction of pursuing these prosecutions without the CPS, who are too often disinterested, has enabled crimes to go punished and has helped these entities establish that there will be enforcement to deter wrongdoing against them.
In June of 2020, Allianz became the latest insurer to delve into the sector where it successfully launched proceedings for a fraudulent claim under a personal injury policy. The company made clear that it has widely invested in fraud mitigation technologies and private prosecutions are part of its toolkit to deter those who seek to bring false claims. Allianz secured a 12 month conviction against the defendant and recovered all of its costs.
From the ashes
While there is an undeniable growth in the growth in the sector, the chequered history of private prosecutions cannot be overlooked. It took but a single failure to make it clear that they offer no panacea to the aggrieved – the inability to secure convictions in the Stephen Lawrence murder, where the state fell short and private action fared no better, left an enduring national scar. The injustice still weighs on the public conscience two decades later.
Then there are others who have come to call these prosecutions a tool of manifest injustice. The claim, up until recently, had been difficult to refute, especially in light of the Post Office scandal where some 900 convictions were secured against sub-postmasters in a series of private prosecutions. It later emerged that the basis of the smoking-gun evidence, software which alleged reported significant accounting discrepancies at local branches, was itself erroneous. The convictions were secured effectively on the basis of lies – with devastating consequences. At least one individual committed suicide and countless others lost their homes and livelihoods.
Accusations later emerged that Post Office executives had been oppressively bullish against the sub-postmasters, bargaining lesser charges for admissions of guilt and not investigating connected discrepancies in their own evidence as raised similarly in each prosecution case. The debacle represented a clear deficit in ethical practice; only recently has the Post Office paid nearly £60 million to settle the resulting claims against it.
When the extent of the Post Office failures became known the public and Parliament reacted with furore on the obvious wide scale miscarriage of justice. Parliamentary scrutiny certainly hasn’t faded. In July, the Criminal Cases Review Commission (CCRC) posited further evidence on the Post Office cases to the House of Commons Justice Committee regarding whether enough safeguards exist to prevent such miscarriages in private prosecutions. The CCRC had as its main concern whether objective prosecutions were obtained given the Post Office acted as the “victim, investigator and prosecutor”.
The CCRC released its findings in late September. The report details that there are now significant safeguards in place to mitigate weak and unmeritorious claims which should help prevent a recurrence of the Post Office scandal. However, improvement is needed on the part of the Ministry of Justice to keep track of private prosecutions and identify causes of concern from frequent litigants to uphold standards. Evidently, the cause for concern has been substantially reduced.
The backing of the cross-party Justice Committee must be taken for what it is. Parliament itself has recognised the retreat of the state in enabling the effective administration of justice. The tools are now in the hands of individuals who must seek to enforce their rights.
A sign of the times
In the today’s climate, the reputational impact on businesses who take a Post Office approach could be devastating but the maturity in the sector since these events over ten years ago has meant that those practices are confined to the past. Indeed, the purpose of such prosecutions must not be on a “recovery-centric” approach, it must always be to right a criminal wrong. While this may not be enough to deter private prosecutions that are merely opportunistic, it should be borne in mind that significant cost consequences exist for those who seek to misuse the system. Adherence to the Private Prosecutors’ Association Code will help to mitigate fears that the prosecution may not be held with the highest standards of integrity and have regard for the public interest.
It should be noted that this does not mean that financial recovery cannot be a factor to bring the prosecution. It will certainly be the key motivator of the defrauded and it will go hand-in-hand with securing justice. The criminal courts permit mixed motives in seeking proceedings; compensation orders are also an open avenue to obtain financial redress for victims. The process as a whole is also cheaper than launching civil proceedings with costs potentially being recoverable from the state or from convicted defendants.
There are also safeguards built into the system as the Justice Committee identified. While it may occur infrequently, the Department of Public Prosecutions can step into the shoes of the complainant and take over or discontinue any private prosecution.
Judges also retain the ability to dismiss cases they believe are vexatious in nature. They somewhat controversially did so in the misconduct in public office judicial review against Boris Johnson, a pre-cursor to criminal action, surrounding the Brexit campaign “£350 million” tour bus slogan. In a similar vein, lawyers reminded the industry that certain crimes cannot be privately prosecuted as a matter of law. The attempted private prosecution of Dominic Cummings, who controversially breached Covid-19 lockdown rules, acted as a salient reminder that certain prosecutions must be brought by the state and cannot be privately pursued.
There is a risk that as the prevalence of private prosecutions grows so too does the likelihood of further vexatious claims. Public officials will find great difficulty in managing the complications associated with a growth in the sector. A ripe target would be the Royal Family, especially given recent scandals. Other than the Queen who enjoys sovereign immunity, the Royal Family may face embarrassment where members of the public seek to enforce the law; there may well be an avenue to do so.
While it has been established that the safeguards are strong and in place to prevent abuse, there is little to stop parties from bringing criminal proceedings to gain the publicity they may crave. In such cases, the damage will be done before the safeguards take effect. The risk equally exists for high-profile businesses where the reputational damage by association to criminality could be devastating.
Brave new world
Depending on your view as to whether the safeguards are sufficient, it should be borne in mind that the UK approach to private prosecutions sits between differing international sentiments.
On the continent, Germany´s modern constitution firmly rejects the concept of private justice for anything but minor offences. The German approach is instead based on victims or complainants applying to senior courts to force state prosecutors to indict. The French model is more generous and steps have been codified into the French Criminal Code to enable investigations into white-collar crimes by certain bodies. Only the most serious federal offences are not privately pursuable.
In the US, the Supreme Court proscribed private prosecutions in federal cases in the 1970s and 80s. The landscape varies across states for state-level offences; however, the federal ruling is mostly echoed with only a small number of states permitting the practice. The Canadian system has taken the opposite approach, with the Public Prosecution Service of Canada Deskbook stating that private prosecutions may be brought to “safeguard against inertia or partiality on the part of authority”.
Australia and New Zealand follow similarly to Canada. Most notably, there was an attempted private prosecution against Aung San Suu Kyi on her visit to Australia in 2018. While this may have ultimately failed it did enable the courts to issue further clarity in the area.
To view this all from a wide lens, it cannot be denied that private prosecutions are still in development and carry with them risks and limitations. Indeed, in an ideal world, there would be no use for them and yet, with ever tightening state coffers, growth in crimes targeting businesses, and a consequent tide of out-of-pocket victims, the practice has been put on the map. It is only inevitable that victims, who have been turned away by the state, seek out ways to protect themselves and try to achieve some semblance of justice. They are fortunate that the road has been paved before them and the opportunity for justice has been placed in their hands.