Why would a person need to bring a fraud private prosecution?
In most cases, where a person or a company is charged with fraud, a police investigation has been completed and then a decision to prosecute made by either the Crown Prosecution Service (CPS) or the Serious Fraud Office (SFO).
In some circumstances, however, the CPS or SFO may not be willing to commence proceedings. If this is the case, then a person, or a company, can take out a fraud private prosecution.
What types of offences would be suitable for a fraud private prosecution?
In terms of economic criminal activities, a private prosecution could be used in cases of internal or external fraud, counterfeiting or to protect commercial rights.
What could a fraud private prosecution result in, if successful?
A private prosecution which is successful will result in a criminal conviction and possible custodial sentence for the offender. In addition, compensation may be awarded to the victim of the economic crime(s) committed, although private prosecutions are typically focused on seeking justice rather than financial gain or remedy.
Are there any risks involved with a fraud private prosecution?
Yes. There are several potential risks which include the following, although this is not an exhaustive list:-
- Financial costs of taking out a fraud private prosecution
- There may be a long period of time between the date of the offence and the trial
- The CPS may take over a fraud private prosecution, following which they may continue or discontinue it
- If a fraud private prosecution is unsuccessful, the person bringing it may be sued by the defendant and ordered to pay the other party’s court costs
How does a person bring a fraud private prosecution?
First of all, it is important to work with our specialist team of private prosecution lawyers to gather as much evidence as possible relating to the fraud. (Information can be requested from the police once the case has been entered into court.)
Secondly, charges need to be drafted. At this point checks need to be carried out to ensure that the full code test (Code for Crown Prosecutors) is met, i.e. does the evidence suggest there would be a realistic prospect of conviction and is it in the public interest to continue with the prosecution. If the test is not met, then the CPS would take over the prosecution and discontinue it.
Thirdly, draft charges are laid before a magistrates’ court, which in turn issues either a summons or a warrant, informing the defendant of the court hearing date, time and location.
Lastly, the initial court hearing takes place. This is always at the magistrates’ court but depending on the nature of the fraud private prosecution, this hearing could be at either a magistrates’ or crown court.
Does a person taking out a fraud private prosecution have to notify the CPS?
No, there is not a legal requirement to do so. However, the CPS could receive notification via another party and then become involved, either taking over the prosecution or discontinuing it.
What is a Compensation Order?
If a fraud private prosecution is successful, and a defendant is convicted, then the court can be asked to make a Compensation Order as part of the sentence imposed.
Whilst the magistrates’ court is limited to ordering a maximum sum of £5,000 as a compensatory payment, the only limitation on the crown court is that it must take into account the financial means of the offender.
What is a Confiscation Order?
Another option open to the crown court, once a defendant is convicted, is the making of a Confiscation Order.
The aim of such an order is to ensure the defendant does not benefit financially from a criminal lifestyle.
A crown court has the power to make both a Compensation Order and a Confiscation Order.