News Private Prosecution 31st Jan 2020

Costs in Private Prosecutions: A Landmark Decision

On 28 January 2020, the High Court gave judgment in the case of Fuseon Limited v Senior Courts Costs Office [2019] EWHC 126 (Admin).  In doing so, Mr Justice Lane gave important guidance on the extent of costs recoverable by a private prosecutor from central funds.  The brief facts and effect of the decision are summarised below.

The claimant company in this case was a letting agent.  In 2015, it came to light that one of its directors had for some years been defrauding the company.  The total accrued losses came to over £100,000.  The company informed the police but was told that they did not have sufficient resources to investigate the matter.  As a result, the company embarked upon a private prosecution of the director in question.  He was convicted following a trial and sentenced to three years in prison.

An order was made by the trial judge under s.17 of the Prosecution of Offences Act 1985 for the reasonable costs of the prosecutor to be paid out of central funds.  The sum claimed by the claimant was £427,909.66.  The sum allowed on the initial determination, however, was only £150,000.  On appeal, this was increased to £200,000 but this still left the claimant considerably out of pocket.  The company therefore appealed to the Taxing Master, who refused the appeal.  The company thereafter appealed further to the High Court.

Before Lane J, there were two main issues in contention.  The first was the finding of the determining officer that as local solicitors would have been able to take the case on, there was no need for the claimant to have instructed more expensive London solicitors instead (Edmonds Marshall McMahon (EMM)).   The second issue was the determining officer’s concurrent finding that in assessing the so-called ‘Singh discount’ (arrived at by standing back from the hours claimed for each piece of work to see if globally the sum claimed is reasonable), he was entitled to take into account the much lower costs which would have been incurred if the case had been pursued by the Crown Prosecution Service, rather than privately.  The Master had upheld the determining officer in relation to both points.

Mr Justice Lane disagreed.  Dealing with the first matter (i.e. the instruction of London solicitors), he ruled that the issue was not whether there were other, local solicitors who might have been able to take on the case more cheaply, but whether it was reasonable in all the circumstances for the London firm, which specialises in private prosecutions, to have been instructed instead.  That was a different question.  He found that, in the circumstances of this case, it was reasonable for that firm to have been used.

In relation to the Singh discount, Lane J. found that there was no legal justification for pinning the prosecutor’s recoverable costs to the level which would have been incurred by the CPS.  In making that finding, he reiterated the important role played by private prosecutions within the constitutional framework, and stated that the right to bring such a case should not be reserved for those with deep pockets.  In an important caveat to this finding, however, the judge simultaneously observed that pinning recoverable costs to CPS rates may be justified if the private prosecutor makes no attempt at the outset to involve the police and/or the CPS.  This reinforces the importance of taking this preliminary step if clients are to be protected on costs.

A link to the full judgment can be found here.

Christopher Coltart QC is Head of the 2 Hare Court Business Crime Group and a member of its Private Prosecution team.


 


Categories: News | Newsflash