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Stacking the costs cards in favour of the prosecution is not fair, and a review of the system is needed
On 31 July the High Court found that search warrants obtained by the Serious Fraud Office (SFO) in the investigation into the Tchenguiz brothers were unlawful and obtained by misrepresentation.
In a postscript to the judgment, the president of the Queen’s Bench Division Sir John Thomas observed that the SFO was not properly resourced. He emphasised the risk to the integrity of financial markets if those who investigate and prosecute do not have the same resources as those who are the subject of investigation.
The success of the criminal justice system is underpinned by the need for a level playing field for prosecution and defence. The Government has addressed this not by furnishing the SFO with the proper tools, but by removing those available to defendants in criminal proceedings.
Erosion in the availability of public funding has been widely reported in recent years, but imminent change will affect those who can afford to mount their own defence. At present, s16(6) of the Prosecution of Offenders Act 1985 allows the court to award acquitted privately paying defendants an amount from public funds that is reasonably sufficient to compensate them for costs properly incurred.
In 2010 the Law Society challenged the previous government’s attempt to cap, at legal aid rates, the amount of costs recoverable by successful defendants (R (Law Society of England and Wales) v the Lord Chancellor). The Law Society was successful and the High Court quashed the regulations as they could not be reconciled with the compensatory principle set out in the 1985 act.
The Government has recently enacted, without further consultation on costs in criminal cases, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the Costs in Criminal Cases (General) (Amendment) Regulations 2012. The principle of compensation set out in the 1985 act is amended and, in proceedings commenced after 1 October, individuals will not be able to recover any legal costs in most Crown Court proceedings where they have chosen not to take up legal aid or have been ineligible for it. Companies will not be able to recover the costs of defending criminal proceedings, save for those in the Supreme Court.
This is set against the new SFO director’s aim to “rebalance the relationship between prosecution and civil settlement” in corruption cases, which will inevitably lead to more prosecutions. Companies have never been able to avail themselves of legal aid and therefore simply will be unable to recover the cost of defending any proceedings, even if acquitted.
It is important that the office charged with the investigation of serious fraud is given sufficient resource, but the system must be fair. Stacking the cards in favour of the SFO is not appropriate. If the SFO is restored to its former glory days of the 1980s, defendants must be allowed to properly defend themselves and this means recompensing them rather than forcing them to pay for the privilege of being prosecuted.
There should be an objective examination of our criminal justice system post-Tchenguiz to ensure prosecution and defence are able to play their proper parts.
Johanna Walsh, a solicitor in the corporate crime team at DLA Piper, assisted with this article