The Fraud Examiner

Private Criminal Prosecution – An Additional Tool For Fraud Victims
 

Richard Trainer, CFE      
Legal Director, Mishcon de Reya LLP

and

Gareth Minty, CFE
Legal Director, Mishcon de Reya LLP


As many anti-fraud professionals know, the road to justice for fraud victims can be long and costly, if the victims decide to seek justice at all. According to the ACFE’s 2018 Report to the Nations, only 58% of the fraud cases reported were referred to law enforcement and only 23% of cases had a civil suit filed. After a lengthy investigation, sometimes fraud victims may think they will never achieve justice or see their money again.

However, in England and Wales there is a third avenue available, in addition to the traditional options of either criminal proceedings brought by the State or a civil claim, namely: a private criminal prosecution. 

Private criminal prosecution is the right, preserved by statute, of an individual, company or organisation (e.g. a charity) to commence criminal proceedings. Once started, for all intents and purposes those proceedings look identical to their public equivalent: same courts, same procedure and rules of evidence, same sentences and ancillary orders if the defendant is convicted.  

However, from the perspective of the fraud victim, a key difference lies in the fact that private prosecutions provide them with a level of input into the shape and conduct of the proceedings that is markedly different to the equivalent experience in a case brought by the public authorities. Furthermore, the costs regime is such that the prosecutor's exposure to the other side's costs is limited, allied to which is the fact that the private prosecutor may well be able to recover a proportion of the costs incurred in the proceedings, from the state, irrespective of the outcome of the trial.  

In certain cases it will be a reasonable and proper course of action for victims to commence a private prosecution without any input from law enforcement or state prosecutors.   But for others, the decision to bring a private prosecution is necessary because the state authorities have determined either not to investigate or not to prosecute. Either way, the point is that, in this jurisdiction, there are options available to the prospective private prosecutor that extend beyond what might otherwise be the limit of the types of proceedings that they can bring or otherwise seek to initiate.   


Fraud


Private prosecution in action

In 2015, proceedings were commenced against the fraudster, Paul Sultana, in what is thought to be the largest private criminal prosecution (by value) ever brought. Following a trial in the spring of 2018, Sultana, a former car dealer, was convicted of conspiracy to defraud Allseas, an off-shore oil and gas company, of €100m, for which he was sentenced to eight years' imprisonment.


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