MIRCHANDANI – some good news for Private Prosecutors
It is well established that private prosecutors may pursue confiscation proceedings in the Crown Court and that confiscation proceedings, as part of the sentencing process, are properly classified as part of the criminal proceedings. As such, if successful, a private prosecutor can expect to recover from central funds costs incurred in such proceedings, under s.17 of the Prosecution of Offences Act 1985, which, as amended, provides that a court may award such costs in “any” proceedings “in respect of an indictable offence”; and, in any proceedings before a Divisional Court of the QBD or the Supreme Court “in respect of a summary offence”.
The question, whether a private prosecutor can recover costs for enforcement proceedings in respect of confiscation proceedings was, however, answered in the negative in Re Somaia in which the Court concluded that although a private prosecutor may apply for a receiver to be appointed in respect of the defendant’s assets, he cannot recover from central funds any costs incurred in doing so. Julia Faure Walker considered the implications of this decision in an article which can be found here – in essence, the Court concluded that such proceedings are civil proceedings, and, therefore, there was no power to award costs from central funds.
The appellant appealed to the Court of Appeal arguing that while enforcement proceedings were civil proceedings and governed by civil procedural law; if it was intended that an award under s.17 could only be made in criminal proceedings then s.17 could and would have so provided. The appellant argued that as the confiscation proceedings were criminal proceedings as part of the overall sentencing process it must follow that enforcement proceedings, designed to give effect to the confiscation order, were likewise “in respect of” an indictable offence and so fell within s.17.
In a judgement, handed down this week, the Court of Appeal considered whether, on a true interpretation of s.17, a private prosecutor may recover out of central funds:
- Costs incurred by him in the enforcement of a confiscation order made in the criminal proceedings; and
- Costs which the prosecutor has been ordered to pay to a third party in the enforcement proceedings.
Giving the judgement of the court, Lord Justice Davis observed that in assessing the true meaning and effect of s. 17 (1) (a) of the 1985 Act, two points had to be borne in mind:
- First, confiscation proceedings themselves are part of the sentencing process and are criminal proceedings: see Rezvi; Zinga.
- Second, enforcement proceedings under the 1988 Act are civil proceedings and are subject to civil procedural law: see Montgomery; Norris; Olden v Crown Prosecution Service  EWCA Civ 961.
In applying a common sense approach to the framing of s.17, Lord Justice Davis noted the defendant had been convicted at trial in the Crown Court of fraud: an indictable offence. The ensuing confiscation proceedings, part of the overall sentencing process which culminated in the confiscation order, were themselves likewise unquestionably “in respect of” an indictable offence. He concluded it was “very odd and strained then to say that, nevertheless, enforcement proceedings which are designed to give effect to the confiscation order are somehow not “in respect of” an indictable offence.” Such a restrictive approach would, he observed, be to put the enforcement proceedings in a bubble and render confiscation orders “toothless” in the absence of adequate enforcement proceedings.
The Court further considered that prohibiting the recovery of a private prosecutor’s costs of confiscation proceedings would be contrary to the perceived public interest – after all, Parliament has decided that, in appropriate cases, private prosecutions serve a public interest and that confiscation proceedings, designed to require a criminal to disgorge the proceeds of his criminality, also serve a public interest. It would, therefore, be a substantial deterrent to a private prosecutor initiating confiscation proceedings in the first place if they could never get any costs of enforcement proceedings out of central funds.
As such, Lord Justice Davis concluded that the enforcement proceedings were part and parcel of the confiscation proceedings and whilst these proceedings were, by designation, civil in nature, the whole context for them, indeed the only reason for their existence, was the criminal conviction and criminal sentencing process, including confiscation. They were, therefore, “proceedings in respect of an indictable offence” for the purposes of recovering costs under s.17.
The Court also closed off the ambiguity of Jefford J’s judgment in Re Somaia as to whether s.17 applied to enforcement proceedings under POCA 2002 noting that the 2002 Act expressly confers the relevant jurisdiction in enforcement proceedings on the Crown Court and the Criminal Procedure Rules expressly include provisions relating to confiscation enforcement proceedings: connoting that such enforcement proceedings, even if hybrid in nature, are properly to be treated as part of a “criminal case“.
For the avoidance of doubt, the Court also made clear that the word “expenses” under s.17(1) could, in principle, be capable of extending to the legal costs ordered to be paid by the prosecutor to a successful third party in the enforcement proceedings.
The Court’s approach in Merchandani is not only logical but also clearly in the public interest – splitting enforcement proceedings from confiscation proceedings as the court did at first instance would create an artificial bubble for enforcement proceedings to operate within and would result in confiscation orders lacking any meaningful bite. The judgment in Merchandani, therefore, not only provides some much needed clarity to this area, it also affords private prosecutors a level of reassurance that they will be able to seek and enforce confiscation orders without ending up out of pocket.
 Zinga  EWCA Crim 1823, https://uk.westlaw.com/Document/IE39C08703DBB11E4960C998A40C37F72/View/FullText.html
 Re Somaia v Lord Chancellor  EWHC 1227 (QB), https://uk.westlaw.com/Document/I259EB2907BE711E9937BDEEA67DDF18D/View/FullText.html
 Murli Mirchandani v The Lord Chancellor  EWCA Civ 1260, https://uk.westlaw.com/Document/IE5B8002004CD11EBB84F8C611517421E/View/FullText.html