Private Prosecutors’ Costs – The Victims and Courts Bill

As a result of the publication of Part I of Sir Brian Leveson’s Independent Review of the Criminal Courts, a further controversial proposed reform to the criminal justice system may have escaped notice.  The Victims and Courts Bill, which is currently at Report Stage in the House of Commons, contains a reform which could fundamentally affect the continuing availability and viability of private prosecutions.

Clause 10 of the Bill would amend sections 17 and 20 of the Prosecution of Offences Act 1985 to allow the Lord Chancellor to make regulations which limit the rates or scales that can be paid from central funds to a private prosecutor.

The existing position is that under section 17 the court can make an order in favour of a private prosecutor for such amount as the court considers reasonably sufficient to compensate the prosecutor for any expenses properly incurred by them in the proceedings.  There are sound policy reasons for this: the 1985 Act, which created the Crown Prosecution Service, expressly preserved the right to bring a private prosecution. Successive decisions of the senior courts have emphasised the important constitutional role such prosecutions play in seeking justice for victims in circumstances where the statutory authorities are unwilling or unable to prosecute. In the modern age it is in fraud cases where private prosecutions are most common (and arguably are most needed) in circumstances where the resources of the state devoted to prosecuting fraud are thinly stretched.  Statistically, only a tiny proportion of economic crimes result in a prosecution by the public authorities; it follows that the vast majority of victims will not see justice.

Thus for policy reasons the making of a costs order in favour of a private prosecutor is not contingent on whether the prosecution is ‘successful’ (i.e. results in a conviction). Rather,  the determining factor is usually whether the prosecution was properly brought. But it follows that in appropriate cases and where there is good reason, the court can express its disapproval of the conduct of a private prosecutor by declining to make a costs order at all, for example, where proceedings have been brought or continued without good cause.

In addition, under the current provisions, the court can reduce the amount claimed  by the prosecutor to one the court considers just and reasonable.  If the court does not fix the amount ordered then the amount is fixed by determination of the Criminal Cases Unit (‘CCU’) of the Legal Aid Authority (‘LAA’).  The CCU has been increasingly robust in its conduct of such assessments in recent years, often making a substantial reduction to the amounts claimed. That said, such reductions have often been overturned on appeal to a costs judge, at least in part.

So what is the underlying purpose of Clause 10 of the Bill? In itself it will change nothing, but if the Lord Chancellor exercises the power it would grant, namely to enact Regulations limiting rates under section 17, then the position could change radically.

The Explanatory Notes to the Bill explain the Government’s thinking, referring to the current position (where the LAA refers to civil Senior Courts Costs Office guideline hourly rates) and going on to state:

“With increasing SCCO rates, the disparity between the amounts which may be paid to private prosecutors and legally aided defence lawyers in the same cases is more pronounced. There is no indication that the caseload undertaken by private prosecutions is more complex than that typically conducted by public prosecuting authorities. This measure seeks to address this inequality to reduce the disparity between the amounts which may be paid to private prosecutors and legally aided defence lawyers in the same case, and to provide clarity on what is considered to be “reasonably sufficient to compensate the prosecutor,” as required under Section 17 of the POA (1985).

“This measure is an enabling power for the Lord Chancellor to set rates in Regulations. The Government would then need to consult on the levels of hourly rates and lay secondary legislation to bring them into force” (emphasis added).

On the basis of these paragraphs, it appears that the government contemplates at least the possibility of achieving parity between a private prosecutor’s costs order with that which the  defence can recover (which is limited to legal aid rates).

This suggestion that there is “inequality” between the private prosecutor and the defence was originally made by the Justice Select Committee in 2020. At first glance it has some attraction given that –  superficially at least –  it can seem unfair that a private prosecutor may in theory recover larger amounts than the defence is able to, in the same case.

That said, closer examination reveals that there are important policy reasons underlying the differential in rates.

First, the obligations on a private prosecutor’s legal team are not the same as those for lawyers acting for a defendant, for the following reasons:

• 1. The prosecutor has to conduct the investigation (which usually has a considerable cost) and for a private prosecution to have any prospect of success, that investigation must be a fair one. This means it must follow all reasonable lines of enquiry and comply with the CPIA (including the scheduling and review of all relevant material). The obligations on the defence are not equivalent.
  2. A private prosecutor, who must bear these costs upfront, can already expect to recover substantially less than the actual costs incurred, and also risks the possibility of an adverse costs order if these weighty obligations are not properly discharged.

Second, the assertion in the Explanatory Notes that “There is no indication that the caseload undertaken by private prosecutions is more complex than that typically conducted by public prosecuting authorities…”  perhaps misses the point.  There may be nothing in the caseload itself which is more complex.  But the very fact that a prosecution is brought privately creates complexities. The application for a summons, management of disclosure in the hands of a private entity, referral to the DPP to take over the prosecution, and abuse of process considerations virtually unique to private prosecutions (such as suggestions of improper motive), all create intrinsic complexity in bringing a private prosecution of any significant size.  The need for specialist representation in such cases has been repeatedly recognised by the courts (see eg. R (Allseas Group SA) v Sultana [2023] EWHC 2731 (SCCO) and Fuseon Ltd v Senior Courts Costs Office [2020] EWHC 126 (Admin)).

Third, the fewer resources a private prosecutor can devote to a prosecution, the fewer checks and balances aimed at ensuring fairness to a defendant are likely to be carried out. This  runs counter to the government’s wish to strengthen the safeguards ensuring fairness to defendants, contained in the proposals arising from the MOJ’s recent consultation.

So what will be the position if a private prosecutor can only expect to recover costs limited to legal aid rates?  Inevitably, only those fortunate enough to be impervious to financial implications will prosecute.  The result will be, as a matter of course,  far fewer private prosecutions.

Some might argue that fewer private prosecutions is a good thing.  But as we have already said, the right to bring a private prosecution has been expressly preserved by Parliament and reinforced by the courts. The government itself has recently recognised (in the MOJ’s consultation) the continuing value of private prosecutions. The rate at which fraud goes without investigation and prosecution by the public authorities,  due to  the cost involved, is undeniable.  If there is a reduction in private prosecutions, any commentator expecting the public authorities to step in and “fill the gap” in the fight against fraud is sadly deluded.

The powers proposed in Clause 10 are not needed. Were it to become law, restricting costs awarded under section 17 would only affect cases which  judges have already assessed as having been brought properly and reasonably, because the subset of private prosecutors who bring improper or unreasonable prosecutions cannot be awarded an order in the first place.

Any Regulations enacted under the Victims and Courts Bill will be subject to consultation and may yet be a way off.  Any “rates” or “scales” set will require very careful consideration.  We would invite the government to think very carefully about this: there is a real risk of unintended adverse consequences which would run contrary to its stated desire to improve the position for victims of serious crime.