Anonymised Summary of Court of Appeal Judgment

Factual and Procedural Background

This judgment concerns confiscation proceedings that followed a private prosecution brought by Company A and Company B against the Appellant. The Appellant's appeal was allowed by judgment dated 5 February 2025 ([2025] EWCA Crim 71) on the basis that fresh evidence might undermine the court's earlier determination of the amount available to satisfy a confiscation order.

The present judgment resolves an application by the Prosecutors for an order that their costs of resisting the appeal should be paid from central funds pursuant to section 17(1) of the Prosecution of Offences Act 1985. The application was made in writing on 4 February 2025. Determination of the application was delayed pending a related Court of Appeal decision in R v. BDI and others ([2025] EWCA Crim [1289]), whose analysis the court treated as binding for present purposes.

Initially the application provided limited information. After directions and the Lord Chancellor's intervention, a witness statement from Attorney McMahon (dated 30 May 2025) and detailed time records (a "Worklog") were produced. The court considered submissions from the Prosecutors and the Lord Chancellor and applied principles drawn from the authorities (particularly the decision in BDI).

Legal Issues Presented

1. Whether an order should be made under section 17(1) of the Prosecution of Offences Act 1985 that the Prosecutors' costs of resisting the appeal be paid out of central funds.
2. If such an order is appropriate, whether the payment should be for the full amount claimed or for a lesser sum under section 17(2A), having regard to compliance with Criminal Procedure Rule (CrimPR) 45.4 and the principles summarised in R v. BDI.
3. What weight should be given to (a) the Prosecutors' failure to involve state prosecuting authorities (police/CPS/SFO), (b) the absence of a market-testing or tendering process for legal providers, and (c) failures or delays in disclosure (specifically intelligence reports) when deciding whether to allow costs and at what level.

Arguments of the Parties

Prosecutor's Arguments

• The discretion to award costs under section 17(1) should generally be exercised in favour of awarding Prosecutors their costs unless they acted improperly or were guilty of misconduct.
• Any disclosure error (non-disclosure of intelligence reports) was an "error" rather than misconduct; descriptions of the reports appeared on the MG6C and the reports were disclosed promptly upon request.
• State budgets do not operate such that an order under section 17 necessarily reduces funds available for other criminal work; the state has retreated from investigating this type of fraud and private prosecutions may save public funds.
• The evidence shows the state (CPS/SFO/police) would likely not have launched a prosecution if the matter had been referred, so private prosecution was justified and rates charged were reasonable; CPS rates are not genuinely available to private litigants and cannot be treated as a market comparator.
• Arguments were advanced seeking to distinguish this case from BDI on factual grounds and to resist an outcome that caps private rates at CPS rates.

Lord Chancellor's Arguments

• The Lord Chancellor highlighted deficiencies in the original application (sparse information) and noted multiple prior costs orders in the same proceedings amounting to £3,847,285.38, raising concern about consistent application of the law when such applications lack sufficient information.
• The application mis-stated the law as it then stood (contrary to authorities such as TM Eye). The correct approach requires first considering whether any order should be made and then assessing a "reasonably sufficient sum".
• Following amendment to CrimPR 45.4, the court may decline to make an order if the applicant fails to provide enough information for the court to decide whether to make an order or whether it should be for the full amount; the Lord Chancellor invited the court either to decline the order or to reduce any award pursuant to s17(2A), and proposed capping at CPS rates in appropriate cases.
• The onus is on the private Prosecutors to show the police/CPS would not have undertaken the investigation and prosecution if given an appropriate opportunity; the evidence here did not conclusively show they "would not" (only that they "might not"), so that factor weighed against a full award.

Table of Precedents Cited

Court's Reasoning and Analysis

The court's reasoning proceeded in a series of steps, grounded in the authorities (particularly BDI) and the relevant rules (CrimPR Part 45.4 and the Prosecution of Offences Act 1985):

1. Ex parte nature and obligations: The court emphasised that applications for payment from central funds under s17(1) are effectively ex parte and that applicants must be candid and provide the information necessary for the court to decide whether to make any order at all. BDI gathers the authorities requiring compliance with CrimPR and full disclosure of relevant facts when seeking public funds.
2. Deficiencies in the original application: The original written application (filed 4 February 2025) was sparse. It mis-stated the law (suggesting the court should normally award full costs unless misconduct) contrary to authorities such as TM Eye and BDI. It failed to provide required particulars under CrimPR 45.4(5) — specifically, a breakdown of work, dates, times and disbursements — and omitted material information about how Company C was engaged and whether the market had been tested or the state involved.
3. Subsequent evidence and explanations: Attorney McMahon's witness statement (30 May 2025) and a later Worklog supplied the missing detail, explaining that Company C had been instructed in 2017 on recommendation by a foreign firm, that no tendering took place, and that the decision to prosecute was taken in November 2018 after advice from Treasury Counsel. The prosecuting team did not offer their investigation to state prosecutors/police until after the successful appeal in February 2025.
4. Importance of compliance and the risk of refusal: The court found the initial failure to comply with CrimPR 45.4(5) was more than a mere oversight. The poorly prepared Memorandum of Costs contrasted sharply with the Worklog and was described as a claim for what appeared to be an excessive sum without proper compliance with the Rules. The court stressed that future non-compliance may result in outright refusal of s17 orders under CrimPR 45.4(6)(c).
5. Disclosure failures and their significance: The intelligence reports concerning the Appellant's wealth were disclosable but were not properly disclosed at trial; this undermined a key part of the prosecution case on hidden assets and could have affected the confiscation hearing. The court held that disclosure failures of this kind can justify a direction under s17(2A) reducing recoverable costs.
6. Failure to involve state authorities and to test the market: The court analysed the consequences of the private prosecutor not approaching the CPS or police at appropriate stages (e.g., when prosecution became appropriate in November 2018, or when confiscation proceedings began). The court explained that where the state might have prosecuted, the costs payable from public funds may be limited to what the state would likely have incurred. Similarly, the failure to test the market (no tendering or "beauty parade") weakens the claim that private rates were the lowest reasonable expenditure, because objective market-testing would have better evidenced the reasonableness of the costs.
7. Discretion under s17(2A): Having identified multiple failings in presentation, disclosure and engagement with state bodies, the court considered the statutory power in s17(2A) to award a lesser sum than the reasonably sufficient sum and concluded that a reduction was appropriate.
8. Proportional remedy: Rather than declining to make any order (which was open under CrimPR 45.4(6)(c)), the court adopted a remedial approach: direct that a determining officer assess the reasonably sufficient sum, and then reduce that sum by 50% under s17(2A) to produce the sum payable from central funds, for reasons specified in the judgment.

Holding and Implications

HOLDING: The court ordered that a determining officer should assess the sum reasonably sufficient to compensate the Prosecutor for expenses properly incurred in this appeal, and that the amount payable out of central funds shall be a lesser sum — specifically, the reasonably sufficient sum reduced by 50% (applying only to the costs of this appeal).

Implications and immediate consequences:

• The determining officer must assess objectively what sum is reasonably sufficient to compensate the Prosecutors for properly incurred expenses in this appeal, having regard to the materials and guidance in the judgment and applicable rules.
• Once the reasonably sufficient sum is determined, the payment out of central funds will be calculated by reducing that sum by 50% under s17(2A). The court expressly limited this reduction to the costs of the appeal before it, not to other costs orders already made in the same proceedings.
• The court signalled that future applications that do not comply with CrimPR 45.4 (and the obligations summarised in BDI and earlier authorities) may be refused outright under CrimPR 45.4(6)(c) without further directions. Applicants for public funds must be candid, provide detailed time records and particulars, explain engagement with state prosecuting authorities, and evidence any market-testing or tendering process used to procure legal services.
• The court clarified that disclosure failures (e.g., withheld intelligence reports) and failures to involve state authorities or to test the market are relevant factors that can justify reductions under s17(2A). The remedy chosen (percentage reduction rather than capping at CPS rates) reflected practical difficulty in identifying appropriate state-equivalent rates for investigative or solicitors' work and the multiplicity of contributory factors in this case.
• No new general rule was declared beyond the proper application of the existing statutory discretion and the principles set out in BDI; the decision applies to the present claim for the costs of this appeal and offers guidance to the profession on presentation and supporting evidence for future s17 applications.

Note: This summary has been prepared strictly from the information contained in the provided judgment extract and does not add or infer facts beyond that text. All parties and individuals have been anonymised consistently in accordance with the instructions supplied.