Anonymised Summary of the Opinion (reserved judgment concerning s17 costs application)

Factual and Procedural Background

This judgment concerns an application for payment from central funds of the costs incurred by private prosecutors (the Appellants) who brought a private prosecution in a Crown Court against several individuals (the Defendants) on counts including conspiracy to defraud and money laundering. The Appellants are non-resident and instructed investigative advisers abroad before instructing domestic legal representatives (referred to in the judgment as "the solicitors"—here anonymised as Law Firm A).

Procedurally: summonses were obtained in a magistrates' court and the matter was transferred to the Crown Court. After a lengthy pre-trial period which included several interim hearings, the Crown Court judge stayed the prosecution as an abuse of process. The Appellants successfully appealed that stay to the appellate court (the Court), which allowed the appeal and ordered that the Crown Court proceedings may be resumed. The Appellants then applied, under section 17 of the Prosecution of Offences Act 1985 ("s17"; "POA 1985"), for their prosecution costs (incurred in resisting the abuse application in the Crown Court and in pursuing the appeal) to be paid out of central funds.

The Government minister responsible for central funds (here anonymised as Minister A) was permitted to intervene in the costs application and made written and oral submissions. Reporting restrictions were in place under the Criminal Justice Act 2003 and the Contempt of Court Act 1981; the Court authorised publication of this anonymised costs judgment while other reporting restrictions (identified persons) remain in force until conclusion of the resumed Crown Court proceedings.

Legal Issues Presented

1. Whether an order should be made under s17(1) of the POA 1985 directing payment out of central funds of sums reasonably sufficient to compensate the Appellants for expenses properly incurred in (a) resisting the abuse application in the Crown Court, (b) pursuing the appeal in the Court, and (c) responding to Minister A's intervention and this hearing.
2. If such an order is appropriate under s17(1), whether the court should exercise its power under s17(2A) to reduce the amount of the award because of circumstances (including the Appellants' failure to involve state prosecuting authorities and to test the legal services market before commencing the prosecution).
3. What comparator or yardstick should be used when assessing what is "reasonably sufficient" — (i) private market rates for the legal representatives actually instructed, (ii) rates which would have been incurred by the State Prosecuting Authority (the CPS analogue), or (iii) some other market-based measure — and in what circumstances CPS (publicly funded) rates may be relevant.
4. Whether the court should itself fix the amount to be paid from central funds, or direct that the amount be determined under Part III of the Costs in Criminal Cases (General) Regulations 1986 by the appropriate authority (the Registrar/determining officer), and which forum should conduct that assessment.

Arguments of the Parties

Appellants' (private prosecutors') arguments

• The Appellants contended that their s17 application complied with the Criminal Procedure Rules and the Costs General Regulations and that they had provided detailed schedules and supporting material for the work done by Law Firm A and counsel.
• They argued it was reasonable for them, as non-residents with ongoing parallel civil and investigatory work conducted by the same lawyers, to instruct the same solicitors and to commence a private prosecution without first referring the matter to the police or the State Prosecuting Authority. They said this avoided duplication, delay and additional expense (including the need to obtain urgent restraint orders).
• They maintained that Zinga and related authorities require the court to assess whether the choice of lawyers and advocates was proper and reasonable, and if so to allow reasonable costs; but that Zinga did not lay down inflexible rules that a lack of tendering necessarily requires a s17(2A) reduction.
• They accepted that an assessment by the appropriate authority was required and proposed that a Costs Judge already seized of related assessment matters handle the determination rather than a determining officer appointed by the Registrar.

Minister A's (intervener's) submissions

• Minister A argued for reduction of the claimed amount because the Appellants allegedly failed to take steps to involve police or the State Prosecuting Authority before commencing the proceedings and failed to test the market (no structured tendering) before instructing Law Firm A and counsel.
• It was submitted that where a substantial prosecution is commenced without seeking to involve the State Prosecuting Authority, or without inviting it to prosecute, the public purse should not be required to meet private market rates; Minister A proposed that any award be capped at the rates which would have been incurred had the State Prosecuting Authority conducted the prosecution (i.e. CPS rates), or, alternatively, that rates be constrained to guideline bands (e.g. a National Band for solicitors and competitive market rates for counsel).
• Minister A also criticized alleged defects in the Appellants' application and contended that such procedural deficiencies should weigh against a full award; Minister A accepted that any reduction under s17(2A) need not be limited to misconduct but may reflect other circumstances.
• Minister A argued that the Registrar (and determining officers under the Costs General Regulations) is the appropriate authority to fix the detailed amount if the Court makes a s17(1) order but reserves detailed fixing to a subsequent determination.

Other procedural points

• The Defendants in the ongoing Crown Court proceedings made no submissions and did not participate in the costs application described in this judgment.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court structured its analysis around statutory provision, practice rules and the relevant authorities. The reasoning followed several clear strands, each grounded in the POA 1985, the Costs General Regulations and practice direction guidance (as summarised in the cited authorities).

Statutory and procedural starting points

• S17(1) of the POA 1985 confers a discretionary power on criminal courts to order payment out of central funds of an amount reasonably sufficient to compensate a private prosecutor for expenses properly incurred in proceedings for an indictable offence. There is a general rule in favour of making such an order, but the court retains a discretion to refuse it.
• S17(2A) permits the court in appropriate circumstances to award a lesser sum than the full reasonably sufficient sum; s17(2C) contemplates that the court may leave fixing the amount to a subsequent determination by the appropriate authority under regulations.
• The Costs General Regulations and the Criminal Procedure Rules provide the practical mechanism for submitting claims and for an appropriate authority (the Registrar/determining officer) to assess costs, resolving any doubt against the applicant.

Principles distilled from authority and applied to the facts

1. The Court reaffirmed the two-stage test (Dudley Magistrates / Zinga): (a) whether the expenses were properly incurred (i.e. whether it was proper and reasonable to instruct the solicitors and advocates actually instructed); and (b) if so, whether the amount claimed is reasonable in quantum.
2. The Court emphasised Zinga's practical guidance that in significant prosecutions private prosecutors should, where appropriate, take steps to involve the state prosecuting authorities and to test the market for legal representation (for example, by seeking tenders or quotations), because failure to do so may be material when deciding whether to order full recovery or to order a reduction under s17(2A).
3. The Court recognised that there is no legal duty to report an alleged offence to the police or to invite the State Prosecuting Authority to prosecute before commencing a private prosecution; however, knowledge that the alleged offending related to a deposit into a UK bank account made it objectively possible and appropriate to inform the police/CPS, and a private prosecutor who does not give the State a reasonable opportunity to decide whether to prosecute places himself at risk of a reduced award.
4. The Court explained that assessments of costs will usually be undertaken by the appropriate authority on the basis of the costs actually and reasonably incurred, but that the court must have sufficient information at the s17(1) stage to decide whether to reduce the award under s17(2A) because of circumstances that make full recovery inappropriate.
5. On the specific facts, the Court analysed the chronology and evidential record: the deposit into a UK bank account was known early; investigations were followed by instruction of solicitors about nine months later; no contact was made with the police/CPS before the prosecution commenced; a single letter to the State Prosecuting Authority was sent only six weeks after summonses were issued and discouraged takeover. The Court found that this did not provide a reasonable opportunity for the State to make an informed decision whether to undertake the prosecution.
6. On market-testing, the Court observed that the Appellants did not undertake a structured tendering process and had relied on a working assumption that leading firms would charge similar rates. Although that approach is understandable for non-resident litigants, the Court concluded it was not sufficient to justify inviting the state to meet very substantial private-market costs without reduction.
7. The Court rejected the submission that the later CPS refusal (when a defendant requested takeover more than a year after commencement) proved that the CPS would have declined had it been invited earlier; the CPS response to a late request is not determinative of what the CPS would have done if given an appropriate early opportunity.
8. Given those features, the Court concluded that circumstances existed which made it inappropriate for the Appellants to recover the full amount of compensation they might otherwise have received under s17(1). In consequence it was appropriate to exercise the s17(2A) power to limit recovery so that it does not exceed the expenses which would have been incurred if the prosecution had been undertaken by the State Prosecuting Authority.
9. The Court did not itself fix the quantum payable. Instead it directed that the amount be fixed by determination under Part III of the Costs General Regulations by the Registrar or a determining officer acting on her behalf (reg 5(2)(a) identifies the Registrar as the appropriate authority). The Court therefore made a s17(1) order in principle, but limited its effect by a s17(2A) direction to the level of State-incurred expenses, leaving the detailed assessment to the appropriate authority.

Holding and Implications

Holding:

The Court made an order under s17(1) of the POA 1985 that the Appellants are to be paid out of central funds a sum reasonably sufficient to compensate them for expenses properly incurred in: (i) resisting the Defendants' abuse application in the Crown Court; (ii) preparing and conducting the appeal to this Court against the stay; and (iii) responding to Minister A's intervention and preparing and conducting the present hearing.

However, the Court also made an order under s17(2A) that the reasonably sufficient sum so awarded is to be reduced so far as necessary so that it does not exceed the expenses which would have been incurred if the prosecution had been undertaken by the State Prosecuting Authority. The Court directed under s17(2C) that the amount to be paid be fixed by means of a determination under Part III of the Costs General Regulations to be made by the Registrar or by a determining officer appointed to act on her behalf.

Implications:

• The Court gave guidance of general application: while private prosecutors have a statutory right to bring prosecutions (and no duty to involve the police/CPS), a failure to give state prosecuting authorities a reasonable opportunity to decide whether to undertake a prosecution, and a failure adequately to test the market for legal representation in significant cases, are circumstances that may justify a court reducing an s17 award under s17(2A), potentially to the level the State would have incurred.
• The decision emphasises the public-purse dimension: private prosecution can impose greater costs on central funds than state prosecution, and that reality is a relevant factor in s17 decisions.
• The Court confirmed that detailed fixing of the award is normally a matter for the appropriate authority (Registrar/determining officer) under the Costs General Regulations, and the court should provide descriptive guidance if it orders a reduction under s17(2A) without fixing a specific sum (consistent with Chapter 4).
• On the facts of this case, the immediate practical effect is that the Appellants will receive a s17 award limited so it does not exceed the costs which would have been incurred by the State Prosecuting Authority; the exact figure will be determined by the Registrar or her delegate pursuant to the Costs General Regulations.

Note: the Court emphasised that this judgment contains anonymised guidance and that other reporting restrictions remain in force with respect to identifying information about the Defendants and the ongoing Crown Court proceedings until those proceedings conclude.