Summary

The English Court of Appeal has handed down judgment on various issues arising in a private prosecution. The Court confirmed that private prosecutors can, following conviction, bring proceedings to confiscate the proceeds of criminal conduct. It also considered whether it was appropriate for private prosecutors to obtain assistance from the police in return for a "donation" to police funds and concluded there is an urgent need for a review of the circumstances in which the police should assist in confiscation proceedings brought by private prosecutors.

Introduction

In England, private individuals and entities have long had the right to bring private prosecutions. That right is now enshrined in Section 6 of the Prosecution of Offences Act 1985. The number of private prosecutions is increasing. That trend is expected to continue at a time of reduced funding for law enforcement, particularly in fraud cases.

The United Kingdom also has comprehensive Proceeds of Crime legislation providing, amongst other things, for the confiscation by the state of the benefit obtained by a defendant from his criminal conduct.

The case

Virgin Media Limited provides telephone, broadband and television service by cable to subscribers. It does so through a “set top box” which unscrambles subscription channels. Mr Zinga, and associates, sold set top boxes which illegally enable users to obtain the subscription channels without paying Virgin. Virgin estimated its losses were around £380 million.

Virgin began an investigation into Mr Zinga. It decided not to make civil claims, but to bring a private prosecution for conspiracy to defraud. It enlisted the help of the Metropolitan Police, who applied to Court for arrest and search warrants.

A few days after Mr Zinga was arrested, Virgin entered into an agreement with the police, under which Virgin agreed to donate to the police 25 per cent of any sums recovered under any eventual order by the Court, following conviction, requiring Mr Zinga to pay compensation to Virgin.

The prosecution by Virgin led to the conviction of Mr Zinga. He was sentenced to 8 years imprisonment. Virgin subsequently began confiscation proceedings under the Proceeds of Crime Act 2002. An investigation into the finances of Mr Zinga was conducted by a team from the Metropolitan Police. Virgin also sought a compensation order for Mr Zinga of £26.6m, being what it claimed was the full value of his benefit from his criminal conduct.

Mr Zinga applied to Court to stay the proceedings on the basis that the pursuit of compensation and confiscation by a private prosecutor was not permitted under the Proceeds of Crime Act, and that in any event it was an abuse of process. He also argued that the compensation application was too complex to proceed, relying on previous decisions that the statutory power to award compensation to victims of crime was limited and available only in straightforward cases.

Following that application, Virgin abandoned its application for compensation, on the basis that calculation of the compensation was complex, and pursued only the confiscation application. The Judge hearing the confiscation hearing assessed Mr Zinga’s benefit from his criminal conduct at £11.8 million, and decided that he had £8,771,300 of assets available to meet an order. He made a confiscation order in that sum, requiring Mr Zinga to pay within 6 months or face another 10 years in prison.

The Court of Appeal

Mr Zinga’s appeal was decided on 24 January. The issues were:

  • first, whether a private prosecutor was entitled to bring confiscation proceedings under the Proceeds of Crime Act, even if it had no financial or personal interest in the outcome;
  • secondly, the propriety of the agreement between Virgin and the police.

The appeal was dismissed. The Court of Appeal decided that the right to bring private criminal proceedings was preserved in wide terms by the Prosecution of Offences Act 1985. It is unquestionable that sentencing is part of "criminal proceedings", and that confiscation proceedings are part of sentencing procedures. It followed that confiscation proceedings were also part of "criminal proceedings" and within the scope of the Prosecution of Offences Act 1985.

Mr Zinga’s legal team had argued, amongst other things, that a private prosecutor could not properly participate in confiscation proceedings, because it could not conduct a financial investigation of the defendant and provide information to the Court, as required by the Proceeds of Crime Act. That work could be carried out only by certain law enforcement officials. The Court of Appeal said that this did not matter. It was clear that the Proceeds of Crime Act 2002 distinguished between those who could investigate and those who could prosecute. The fact that a prosecutor could not carry out a financial investigation did not impair its ability to participate fully in confiscation proceedings, provided that an appropriate law enforcement officer provided the necessary assistance.

It was also argued that the confiscation regime was draconian, that confiscation orders had to be proportionate, and that such powers should not be exercised by a private prosecutor. Virgin argued that, as a private prosecutor, it was exercising its powers for the state. The Court left that question open, but said that whatever a private prosecutor's status, it was the court's duty to ensure that the confiscation order was not disproportionate.

That left the question of the propriety of the agreement between the police and Virgin. The Court of Appeal concluded that the agreement did not give rise to an abuse of process in respect of proceedings seeking to confiscate assets that would go only to the state. It seems the conclusion might well have been different had Virgin pursued its application for compensation in parallel with an application for confiscation. However, the Court was troubled by the arrangement because it provided an incentive for the police to devote resources to assisting Virgin in its claim for compensation and gave rise to a perception that the independence of the police was compromised.

The Court said that it was not appropriate for it to comment upon the circumstances in which the police should assist in confiscation proceedings brought by private prosecutors, particularly where those prosecutors were commercial entities. However, it suggested that urgent consideration was given to the issue by the Association of Chief Police Officers, the Association of Police and Crime Commissioners, and the Home Office. In particular, the Court of Appeal noted the risk of a conflict of interest between prosecution in the public interest and claims for compensation by private prosecutors. It suggested that one option would be for the Director of Public Prosecutors to take over confiscation proceedings following a successful prosecution brought by a private prosecutor.

Conclusion

Private prosecutions are a valuable tool for ensuring, in some circumstances, that justice is done and crime does not go unpunished. But the case does demonstrate the conflict that can exist between the use of criminal mechanisms to deter, disrupt and dismantle criminal networks, and the desire of victims to obtain compensation. That conflict can be substantial in private prosecutions. There are themes here relevant to those seeking to address corrupt conduct and recover the proceeds of corruption. Any significant programme is likely to make use of a range of criminal and civil mechanisms. Understanding the advantages, disadvantages and sensitivities of those mechanisms is critical, in particular whether and to what extent criminal and civil mechanisms can appropriately be co-ordinated.

The Judgment was handed down on 24 January 2014, it is entitled Regina (Virgin Media Ltd) and Munaf Ahmed Zinga with citation number [2014] EWCA Crim 52. It is available here: http://www.bailii.org/ew/cases/EWCA/Crim/2014/52.html