The answer is a little further than you might expect!
Earlier this year, on the 9th March 2015, despite widespread opposition, the government brought into effect a dramatic increase to civil court fees. In short, for money claims over £10,000, litigants in the civil courts will have to pay an issue fee of 5% of the value of their claim, subject to a cap of £10,000. The result being that any claim greater than £200,000 will now attract an issue fee of £10,000, representing a whopping 576% increase to the previous fees.
A litigant’s fragile nest egg, that they’re often forced to use to fund litigation, will therefore incur a huge dent before they even pass go. This is on top of legal costs incurred for an advice on merits, case preparation and instruction of experts and/or enquiry agents. Consequently, the sum of £10,000 may initially appear to get you not very far at all. However, most litigants are so outraged and emotionally linked to the dispute that litigation is unfortunately the only way forward. There are also many cases where the crossover between criminal and civil liability is likely to be an issue, especially in any alleged bribery or Fraud Act offence cases.
Stretching the Pot a little further!
Although litigants may be aware that a criminal offence might have occurred, they are not aware that they can pursue the offender in the criminal courts through a private prosecution. Private prosecutions are an often overlooked legal avenue for fighting fraud – many lawyers, let alone their clients, do not even realise that a private prosecution is an option. In fact, the criminal law can often be a more suitable vehicle to pursue the offender, whether that be a company or an individual. This will not necessarily be an option in all cases, however, circumstances will arise where the issues are clear, the offences are serious and the criminal law could and should be invoked.
In these cases, private prosecutions can be brought by any individual or any company, the right being expressly preserved by section 6(1) Prosecution of Offences Act 1985. Other than the fact the prosecution is brought by a private individual or company, for all other purposes they operate in exactly the same way as if the prosecution had been brought by the Crown.
Among many other advantages to bringing a private prosecution, which are often brought in tandem with civil proceedings, one noticeable advantage is the lack of an issue fee. A litigant might be best advised to save the £10,000 civil court fee and invest that money into receiving invaluable legal advice from an experienced prosecutor as to whether they have a case suitable for a private prosecution.
Depending on the nature and complexity of the case and the amount of investigation required, £10,000 in legal fees may enable a litigant to i) receive an advice on merits, ii) gather further evidence, iii) prepare the prosecution case papers and iv) pay for representation at the first hearing, where, of course, the defendant may plead guilty.
£10,000 might, therefore, get you a little further past ‘Go’ than initially thought.
Civil and Criminal Law in Tandem – delay caused by criminal proceedings to civil claim a myth
It is often considered that criminal and civil proceedings should not be undertaken in tandem, or that if they are, it is likely that civil proceedings will be halted whilst criminal proceedings rumble on, perhaps taking years. However, the High Court confirmed its approach to such situations in Financial Services Authority v Anderson. In this case, the claimant had commenced civil proceedings against the defendants, but after the proceedings had been issued, the defendants were also arrested by the police on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation in relation to the same facts. During the course of the civil proceedings, the defendants sought an adjournment as a result of the criminal investigation, on the basis that if the civil proceedings continued it would expose them to potential prejudice in the criminal investigation. The court referred to the established case law and confirmed that where there are concurrent criminal proceedings, the key consideration regarding a stay in civil proceedings is whether the continuation of the civil case will give rise to a real, as opposed to a fanciful, risk of serious prejudice which may lead to injustice in one (or perhaps both) of the proceedings. It is not enough that both cases arise from the same facts.
Furthermore, when used in conjunction, civil and criminal law can be extremely powerful allies. For example, consider a civil injunction and criminal bail. One halts a specific activity; one can limit a broad range of actions such as international travel, daily activities and place of residence.
Even more attractive – a private prosecution will often be cost neutral. A private prosecutor can ask for costs against a defendant when he or she is convicted or a costs order from central funds. In this regard, the court can and should order “reasonable” costs for investigative and legal expenses to be paid out of central funds. The prosecution will not be allowed to recover costs if they have conducted the prosecution in an improper or vexatious manner – for example, concealing evidence or not complying with disclosure obligations, and for that reason, it is paramount that the prosecution is conducted by prosecutors with experience in conducting complex fraud investigations and private prosecutions.
Clearly there needs to be good standard of evidence available to succeed in any fraud claim but private prosecutions can provide a helpful additional tool alongside a civil fraud claim and should not be overlooked as an option.