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Private Prosecutions and Asset Recovery
As law enforcement resources become increasingly stretched, the amount of money obtained by fraudsters increases year on year and crimes go unpunished. A company needs to demonstrate to its shareholders that the appropriate action has been taken to protect or recover assets and deter others from committing fraud upon the company. A local authority will have similar obligations to the tax payer. An individual may feel that a private prosecution is a quicker and more effective way of obtaining justice.
JMW can act as a private prosecutor in order to obtain justice and recover assets on your behalf in the criminal courts. We can also undertake civil fraud asset recovery cases where a private prosecution is not appropriate. We may act on behalf of -
- Corporate clients where the recovery of stolen assets is business critical and other forms of litigation are less appropriate. This may include a conventional criminal prosecution and confiscation proceedings or civil fraud asset recovery.
- Public authorities where specialist representation maximises the cost effectiveness of public funds.
- Law enforcement agencies without the necessary resources to run all of the complex cases they would ordinarily pursue. This may include matters pursued under Part 5 Proceeds of Crime Act 2002.
- Private individuals seeking justice and, where relevant, compensation or recovery of assets in cases where the traditional prosecuting authorities will not proceed for one reason or another.
S6(1) Prosecution of Offences Act 1985 permits individuals and companies to bring a private prosecution and an increasing number of corporate clients in particular will chose a private prosecution in place of a report to Action Fraud or the local police.
Funding a Private Prosecution or Asset Recovery Case
Funding a case does not necessarily involve the payment of fees in advance. Each matter is assessed by specialist lawyers for an opinion on the comparative merits of a private prosecution, civil fraud asset recovery or assistance with a report to the appropriate law enforcement agency. The assessment will include a proposal on whether it may be possible to fund with a conditional fee arrangement (sometimes referred to as a ‘no win no fee’ agreement), insurance cover, staged payments or a bespoke litigation funding solution. It very much depends upon the nature of the case and client. The merits of the case and the chosen route are regularly reviewed to ensure cost effectiveness.
It may also be possible to recover a proportion of the investigation and prosecution costs from government funds at the end of a successful private prosecution. This is an important consideration where it is not possible to recover all losses from the defendant.
Which route to take?
A degree of flexibility is required in assessing which option is appropriate in each case where a client is trying to recover the proceeds of fraud. We therefore involve the client on a very regular basis to ensure that the highest quality decisions are made on a fully informed basis.
Timing of the investigation –
Time is of the essence where a private prosecution or civil fraud asset recovery is a possibility. Assets can be moved quickly through the banking system and decisive action can be critical in stopping transactions or tracing the path of the relevant money. The process will often begin in complex cases with a close analysis of the paper trail and financial information to see if expert assistance from a forensic accountant might be required. We may also recommend the involvement of a forensic computer expert to look at the digital trail or recover emails etc. in the course of uncovering the fraudster’s actions.
Applications to the court –
Once we establish what has occurred, we may apply to the court for freezing orders or orders obliging innocent third parties to provide information, often referred to as ‘Norwich Pharmacal’ orders. In some cases, it may be necessary to obtain search and seizure orders enabling us to enter specified premises and obtain information or documents. This can include the seizure of computer hardware, software and accounting records and will often be undertaken with the assistance of IT experts or other experts appropriate to the business. Orders will normally be obtained without informing the suspected fraudster; although persons affected by the orders are given an opportunity to make representations to the court if, for example, they believe the orders were inappropriately obtained or executed. It is therefore important to ensure that information supporting the application is as accurate as possible and is treated with care, particularly where legal professional privilege might arise.
Preparing the case –
As soon as orders are served upon the relevant parties, the suspected fraudster will be on notice and may try to cover their tracks or move assets beyond the reach of the court. It is important to prepare thoroughly before publicising the action, particularly where witnesses need to be interviewed or where disciplinary proceedings might arise within the company.
Throughout this process, consideration is given to whether the client would be best placed to proceed down the civil fraud route and/or a private prosecution (and confiscation proceedings) or civil asset recovery via Part 5 of the Proceeds of Crime Act. Each option has its advantages, disadvantages and costs implications. The procedures are quite different for each route and expert guidance will ensure the most cost-effective solution when compared to the client’s ultimate objective.
Securing the result –
Whether the chosen route involves the criminal or civil courts, the matter may be resolved by trial or admissions. Preparing for trial in an asset recovery context is much like gathering information to strengthen your position in commercial negotiations. Collaborative effort is key to maintaining focus on what you are actually trying to achieve and important strategic decisions need to be made at various points to ensure the best result. You need to know that your legal team is underpinned by straightforward common sense advice so that the result can be achieved in the most cost-effective and timely manner possible.
The team comprises of former police officers and prosecutors, together with specialist litigation lawyers and advocates, each with unparalleled experience at the lower and higher courts. We draw upon the vast experience of more than 35 lawyers within the Business Crime, Regulation and Litigation department to assist clients in a wide variety of circumstances. The service is offered through ‘JMW Protect’ so that we may have ready access to the forensic expert services required in any given circumstances. This includes the option of calling upon expertise from within JMW’s own nationwide ‘Lawshare’ network of over 200 law firms.
Partner and Head of Department
Business Crime, Regulation & Driving Offences