CPS‑Equivalent Cap on Private Prosecutors’ Recovery from Central Funds under s17(2A) POA 1985 where CPS was not engaged and the legal market not tested

Introduction

This reserved costs judgment of the Court of Appeal (Criminal Division), delivered by Holroyde LJ, arises from a successful appeal by private prosecutors against a Crown Court decision staying a private prosecution for conspiracy to defraud and money laundering as an abuse of process. After allowing the appeal and permitting the proceedings to resume, the Court addressed an application by the private prosecutors under section 17 of the Prosecution of Offences Act 1985 (POA 1985) for their costs, both of resisting the stay below and of the appeal itself, to be paid out of central funds. The Lord Chancellor was permitted to intervene.

Because the underlying criminal proceedings remain ongoing and subject to reporting restrictions, the Court issued this anonymised costs judgment and varied existing restrictions only to the extent necessary to publish its guidance. The case presents issues of general importance concerning:

• the scope of a private prosecutor’s entitlement to recovery from central funds; and
• the circumstances in which a court will reduce recovery under s17(2A), including by capping recovery to the costs that would have been incurred had the CPS prosecuted the case.

At the core is a practical and constitutional question: where a private prosecution is pursued without giving the CPS a reasonable opportunity to consider taking it forward, and without any or adequate “market testing” for legal representation, should the public purse bear the full measure of private legal spend? The Court’s answer is a qualified “no,” crystallised into clear guidance.

Summary of the Judgment

The Court reiterated the general rule that where s17 is engaged the court should ordinarily make an order in favour of a private prosecutor, absent good reason not to. However, the court:

• Emphasised the importance of the guidance in Zinga concerning (i) early engagement with state prosecuting authorities and (ii) market testing of legal representation and fees.
• Confirmed there is no legal duty to approach the CPS or police before instituting a private prosecution (s6 POA 1985), but underscored that failure to do so may significantly affect the extent of recovery from central funds under s17.
• Held that, even in the absence of misconduct, circumstances may justify a reduction under s17(2A) where a private prosecutor proceeded without giving the CPS a reasonable opportunity to consider undertaking the prosecution and without market testing of legal fees.
• Applied those principles to the case: the prosecutors wrote to the CPS six weeks after summonses were issued, expressly discouraging takeover, did not chase for a reply, and undertook no market testing before instructing solicitors or counsel. On those facts, the Court ordered an award under s17(1) but imposed an s17(2A) reduction by capping recovery to the expenses that would have been incurred had the CPS prosecuted the matter.
• Directed that the quantum be determined by the Registrar (or a determining officer appointed on her behalf) under Part III of the Costs in Criminal Cases (General) Regulations 1986, with the CPS-equivalent cap to be applied.

In short: yes to a s17 order; but reduced under s17(2A) to a CPS-equivalent ceiling because of the failure to engage CPS early and to test the legal market.

Analysis

Precedents Cited and How They Shaped the Decision

• Simpsons Motor Sales (London) Ltd v Hendon Corporation [1964] 3 All ER 833: The classic “hypothetical competent counsel” test for reasonable counsel’s fees. The Court recognised this remains relevant on assessment, informing the yardstick for counsel’s remuneration recoverable from public funds.
• R v Dudley Magistrates’ Court, ex p Power City Stores Ltd (1990) 154 JP 654: The two-stage analysis for costs orders (mutatis mutandis applicable under s17): (i) were the expenses properly incurred (including the choice of representative), and (ii) if so, what sum is reasonably sufficient? This framework underpins both the entitlement and the quantum exercise.
• Wraith v Sheffield Forgemasters Ltd [1998] 1 WLR 132: In civil costs, the reasonableness of choice of solicitor (including geography and expertise) and the concept of “luxury” or unsuitable selection. The Court used Wraith’s two-stage logic to stress that reasonableness of choice implicates not just suitability but cost compared with the relevant market.
• Barry v Birmingham Magistrates’ Court [2009] EWHC 2571 (Admin): No legal requirement to report to the police before a private prosecution. The Court relied on this to confirm that while engagement with state authorities is not mandatory, it is nevertheless highly material to costs recovery.
• R (Law Society) v Lord Chancellor [2010] EWHC 1406 (Admin): The principle of compensation under s16/s17 cannot be undermined by regulation; legal aid rates cannot be imposed as a ceiling for privately funded defence or prosecution costs. This secures the baseline concept of “reasonably sufficient” compensation, but does not preclude fact‑specific reductions under s17(2A).
• R (Virgin Media Ltd) v Zinga [2014] EWCA Crim 52; and [2014] EWCA Crim 1823: The lynchpin authority. First, the Court flagged the increased public cost of private prosecutions. Second, in the later costs decision, the Court modernised the Dudley approach, emphasising the need for: (i) steps to engage state prosecutors; and (ii) competitive testing of the legal market (quotes/tenders) in significant prosecutions. This case’s guidance is applied with new force here, becoming the decisive determinant under s17(2A).
• Evans v SFO [2015] EWHC 1525 (QB): Disavowed publicly funded (legal aid/CPS) comparators for assessing privately funded rates in ordinary circumstances; endorsed Simpsons for counsel and guideline rates as starting points for solicitors. The Court here reconciles Evans by recognising circumstances where CPS comparators are relevant—particularly where there was no reasonable engagement with CPS before proceeding.
• Kazakhstan Kagazy plc v Zhunus [2015] EWHC 404 (Comm): Leggatt J’s objective “lowest amount reasonably required” concept. The Court applies this as an orienting principle for assessing which items are reasonably necessary from the public purse’s perspective, tempering private best-interest spend.
• Fuseon Ltd v SCCO [2019] EWHC 126 (Admin): Approved “Singh reduction” (a global stand-back). Warned against routine CPS comparators, but allowed that they may be legitimate where the private prosecutor ignored whether the state would prosecute. The Court expressly builds on this nuance to justify capping by CPS-equivalent where CPS was not reasonably engaged.
• R (TM Eye Ltd) v Crown Court at Southampton [2021] EWHC 2624 (Admin): Clarified structure of s17 discretions: (i) decide whether to make any award; (ii) determine the “reasonably sufficient sum”; (iii) then consider s17(2A) reduction even absent misconduct. The Court expressly adopts and deploys that sequence here.
• R (Chapter 4 Corp Dba Supreme) v Southwark Crown Court [2023] EWHC 1362 (Admin): If imposing a s17(2A) reduction but not fixing the exact figure, the order must describe the reduction’s method (e.g., a percentage or the formula). The Court follows this by prescribing a CPS‑equivalent cap and leaving assessment to the determining officer.
• R (Allseas Group SA) v Sultana [2023] EWHC 2731 (SCCO): A costs judge suggested that if the choice of solicitors was objectively reasonable, the lack of a tender might itself be reasonable. The Court here respectfully disagrees insofar as that proposition is generalised, holding that reasonableness of choice inherently entails comparative consideration of charges and market testing in significant cases.

Legal Reasoning

• No duty to engage CPS before a private prosecution: Section 6 POA 1985 preserves private prosecutions; there is no legal duty to report to police or invite the CPS to act. But s17 is a discretionary compensation regime. The absence of engagement with the CPS is a factor that can make full recovery inappropriate in the public interest, particularly where public funds would otherwise subsidise higher private spend when the state might have prosecuted more economically.
• The s17 framework and sequence: - Stage 1 (s17(1)): Decide whether to make any order; general rule in favour unless good reason not to (CrimPR r45.4(6); Costs PD 2.6.1).
  - Stage 2 (s17(1)): If making an order, the court assesses (or directs assessment of) the “reasonably sufficient sum” to compensate for expenses properly incurred. This is a market‑based and itemised exercise, with doubts resolved against the applicant (Reg 7(3)).
  - Stage 3 (s17(2A)): Even then, the court may reduce the award where circumstances make full recovery inappropriate, and may do so even in the absence of misconduct. The examples in rules/PD are not exhaustive.
  - Stage 4 (s17(2B)-(2C)): If the amount is not fixed by the court, its order must describe any reduction to be applied; the Registrar/determining officer performs the assessment.
• Why engagement with CPS matters: - Public interest and public purse: The Court re‑endorsed Zinga’s warnings that private prosecutions tend to be more expensive for the state than CPS‑run cases. If the CPS could have prosecuted (or would have been willing to, if asked at the right time), it is difficult to justify the public funding of higher private costs.
  - Reasonable opportunity: The question for s17(2A) is whether the CPS was given a reasonable opportunity, at an appropriate stage, to consider taking over or conducting the case. A perfunctory post‑summons notification, which discourages takeover and is not followed up, is insufficient.
• Why market testing matters: - Zinga updated the Dudley framework for a modern legal market in significant prosecutions: responsible private prosecutors should test the market (obtain quotes/tenders) before instructing solicitors and counsel, to evidence that their terms are reasonable. Absent that, it is difficult to prove that private charges were reasonably incurred from the perspective of the public purse.
  - The Court rejected a broad reading of Allseas that a reasonable choice of firm obviates the need to test the market; reasonableness of choice inherently includes a comparative cost dimension.
• When CPS comparators are legitimate: - Evans and Fuseon caution against using publicly funded comparators as a matter of course when measuring reasonable private market costs. But the present Court draws a principled line: where a private prosecutor acted “without regard to whether the state was willing and able to prosecute,” CPS rates may properly be used, either to inform the s17(2A) reduction or, in an appropriate case, as a cap on recovery.
  - Even if it was reasonable to proceed privately (e.g., where CPS declined), it may still be relevant to consider what a competent state authority would have spent in a case commonly prosecuted by the CPS/SFO, especially as to counsel availability at state rates.
• Application to the facts: - The prosecutors knew from the outset of UK connections, yet did not notify police/CPS pre‑issuance; their single post‑summons letter discouraged takeover and was not followed by a chase.
  - They undertook no structured market testing before instructing solicitors or counsel, relying instead on an assumption that “leaders in the field” would not differ materially in cost.
  - On those facts, the Court concluded there were circumstances making full recovery inappropriate and ordered a s17(2A) cap: the “reasonably sufficient sum” recoverable must not exceed what the CPS would have incurred.
• Assessment mechanics: - The Court declined to fix the amount itself; under Reg 5 the Registrar is the appropriate authority and may appoint a determining officer. The officer may seek information from the Ministry of Justice regarding CPS‑equivalent costs, consistent with the Court’s guidance.

Impact

This decision significantly strengthens and operationalises Zinga’s guidance. Its practical effects include:

• A clear incentive structure: Private prosecutors who do not (i) give the CPS a reasonable, timely opportunity to consider taking over the case and (ii) test the legal services market should now expect an s17(2A) reduction—potentially a cap at CPS‑equivalent costs—even where they ultimately succeed on the merits and even absent misconduct.
• Elevated disclosure obligations in s17 applications: Courts will expect detailed evidence addressing CPS engagement (including timing, content, and follow‑up) and the steps taken to test the market (quotes/tenders; comparisons of rates; reasons for selection) so that the court can decide whether to order a reduction under s17(2A) before the determining officer undertakes itemised assessment.
• Market discipline: The judgment imports a competitive procurement ethos into private prosecution costs, particularly for significant, complex cases (e.g., fraud). It may curb premium rates where a state alternative was reasonably available.
• Alignment with public finance concerns: The Court re‑endorses Zinga’s public‑expenditure concerns, likely leading to greater use of CPS comparators in appropriate circumstances and shaping the expectations of private funders about ultimate reimbursement.
• Professional practice adjustments: Investigators, solicitors, and counsel engaged by private prosecutors will need to plan for early CPS engagement strategies, document procurement efforts, and anticipate that failure to do so may reduce central‑fund recovery—even when work quality is unimpeachable.

Complex Concepts Simplified

• Private prosecution: A criminal case brought by an individual or entity other than the CPS/police. Lawful under s6 POA 1985; CPS may take over at any stage (s6(2)).
• Central funds: Public money administered for criminal costs orders (e.g., s16–s19 POA 1985).
• Section 17 POA 1985: - s17(1): Permits an order for payment from central funds of an amount “reasonably sufficient” to compensate a private prosecutor for “expenses properly incurred.”
  - s17(2A): Even then, the court may order a “lesser amount” where circumstances make full recovery inappropriate (not confined to misconduct).
  - s17(2B)-(2C): The court can fix the amount, or, if not, must describe any s17(2A) reduction and direct assessment by the appropriate authority (Registrar/determining officer).
• Determining officer: The official who conducts the itemised assessment of costs under the 1986 Regulations. They must allow only such work and disbursements as were actually and reasonably done/incurred, and resolve doubts against the applicant (Reg 7(3)).
• “Reasonably sufficient” vs s17(2A) reduction: - “Reasonably sufficient” is the compensatory measure of properly incurred expenses (after a line‑by‑line assessment).
  - s17(2A) allows a separate, overlay reduction for policy‑based “circumstances” (e.g., failure to engage CPS/test the market) that make full recovery inappropriate.
• CPS‑equivalent cap: A court‑ordered ceiling pegging recovery to what CPS would have spent, applied via s17(2A) where justified by the circumstances. The determining officer calculates the figure, and may draw on MOJ information.
• “Market testing”: Seeking quotes/tenders or otherwise competitively evaluating the available legal representation and fee structures in significant prosecutions, to evidence that charges agreed were reasonable for the work required.

Practical Guidance for Future s17 Applications

• Engage the CPS early: - Notify the CPS/police before issuing summonses where feasible, especially in substantial, complex cases (e.g., fraud).
  - Provide enough information for an informed decision; do not discourage takeover; and follow up if no response.
  - Keep a clear audit trail (dates, documents, and content of engagement).
• Test the legal market: - Seek quotes/tenders for solicitors and counsel; record the options considered, comparative rates, and reasons for selection (including expertise, urgency, and international capability).
  - If you proceed with existing civil lawyers for continuity, explain why that is reasonable and how cost was evaluated against alternatives.
• Structure your application to the court: - Address CrimPR r45.4 requirements fully; include a narrative on CPS engagement and market testing.
  - If seeking summary assessment, be ready for the court to impose an s17(2A) formula (e.g., percentage or CPS‑equivalent cap) and leave quantum to determination.
• Anticipate comparators: - If CPS was unwilling/unable (and had a reasonable opportunity), expect assessment by private-market comparators (Simpsons; guideline hourly rates; market‑rate counsel).
  - If CPS was not engaged or given a reasonable opportunity, expect CPS‑equivalent caps to be considered under s17(2A).
• Remember sequencing: - The court decides first whether to award under s17(1), then whether to reduce under s17(2A), and only then does the detailed assessment occur. Supply the court with the material it needs at the s17(2A) stage.
• Consider post‑conviction recovery: - Where appropriate and legally available at a later stage, seek s18 costs against a convicted defendant to reduce the burden on central funds.

What the Court Did Not Decide

• The Court did not hold that CPS engagement is legally mandatory; rather, it is a decisive factor in the s17(2A) discretion.
• The Court did not impose a blanket rule that publicly funded comparators must always be used; their use depends on the circumstances—particularly whether CPS engagement was reasonably pursued.
• The Court did not fix rates or quantum; it prescribed a CPS‑equivalent cap and left determination to the Registrar/determining officer.

Conclusion

This judgment is a pivotal recalibration of private prosecution costs recovery. It affirms the availability of central funds to private prosecutors while insisting on disciplined pre‑action conduct. Two ideas are now firmly conjoined:

• Accountability to the public purse requires private prosecutors in significant cases to give the CPS a reasonable, timely opportunity to consider prosecution and to procure legal representation through competitive, transparent market testing.
• Failure to do either may justify an s17(2A) reduction, including capping recovery to CPS‑equivalent spend, even in the absence of misconduct and even where the prosecution’s conduct has been proper and successful on interlocutory issues.

In operational terms, the Court has turned Zinga’s guidance from aspiration into consequence. The message is clear: if a private prosecutor chooses to proceed without reasonably engaging the state and without testing the market, they may proceed—but they do so at real risk to their ability to shift the full cost onto central funds. This is a principled development that respects the statutory right to private prosecution, strengthens stewardship of finite public resources, and provides a coherent roadmap for courts, prosecutors, and assessing officers faced with s17 applications.