In private prosecutions, the compensatory principle will apply so that prosecutors can recover their costs from central funds, under section 17 of the Prosecution of Offences Act 1985 (section 17). This principle has recently been revisited by the Senior Courts Costs Office (SCCO) in DAS UK Holdings Limited v Asplin and others, in which it allowed an appeal against the decision of the determining officer at the Legal Aid Agency (DO) ( EWHC 2214 (SCCO)).
DAS UK Holdings Limited brought a successful private prosecution against three of six defendants, including Mr Paul Asplin, in respect of a long-running fraud involving a scheme to make secret profits, and causing losses to DAS of £11,231,397.At one point, the proceedings were stayed as an abuse of process but the Court of Appeal overturned this decision, following which there was a “tortuous” process to take the case to trial. The disclosure exercise, in the course of which many of DAS’s disbursements were incurred, involved 4.3 million documents which were filtered down to 42,500 documents for disclosure.
After trial, Mr Asplin was sentenced to seven years’ imprisonment. The Crown Court also granted a costs order under section 17 and specified that there were no circumstances that made it appropriate to reduce the amount. The actual recoverable costs were to be subject to taxation.
There was no dispute between the parties before the SCCO that the compensatory principle applied, but the respondent Lord Chancellor argued that it did not follow that every pound incurred by DAS should be reimbursed.
Assessment of costs
The issue for the DO was whether the costs were actually and reasonably incurred. The DO assessed and rejected or reduced a large number of the various disbursements incurred by DAS, including counsel’s fees and the fees of external consultants, such as PwC, Ernst & Young and BDO. DAS appealed.
The SCCO allowed the appeal for the most part. It held that the DO had approached the assessment of the claim incorrectly. In particular, the DO had misdirected herself in some respects that were inconsistent with the compensatory principle behind section 17, which reflects the public interest in private prosecutions (see feature article “Private prosecutions: fighting back against crime“).
The court overturned the DO’s decisions on some heads of claim. For example, it held that it was reasonable to pay leading counsel’s fees for a major fraud prosecution by reference to a half or full day rate, or a fixed fee. The DO’s application of the Singh discount, which requires an overall assessment of reasonableness, was wrong and based on a misunderstanding of the disclosure process (R v SCCO ex p John Singh  Costs LR 49). The court approached the matter in light of a recent decision of the High Court in Football Association Premier League v Lord Chancellor, which confirmed that investigation costs can be costs incurred in the criminal proceedings and are, therefore, prima facie recoverable ( EWHC 755 (QB)). For example, the costs of an initial investigation carried out by DAS’s risk and compliance officer were recoverable.
The court reiterated that the proportionality test, which may apply to the assessment of costs in civil proceedings, does not apply to claims under section 17. It also held that disbursements for work that had a dual utility, with a benefit other than the prosecution, may still be recoverable if the work benefitted the prosecution. The key point, however, was the court’s endorsement of DAS’s argument that, at least by analogy, the principle in Deutsche Bank AG v Sebastian Holdings Inc and another applied; that is, disbursements do not need to be recorded in as much detail as is required of solicitors for the recording of their time ( EWHC B24 (Costs)). The assessment of costs under section 17 does not require in respect of disbursements the level of scrutiny that would be required of a solicitor in respect of their fees. There must, however, be evidence that the work was done and that it was reasonable.
DAS UK Holdings Limited concerns the treatment of disbursements under a number of different heads and practitioners will find it of considerable interest when claiming disbursements of those kinds. The aspect that may be of most general interest to practitioners, however, is the court’s application of the principles in Deutsche Bank to a claim under section 17. Although Deutsche Bank concerned a costs assessment arising from civil proceedings and the Civil Procedure Rule Practice Directions do not apply to the assessment of costs under section 17, the court nevertheless found the guidance in Deutsche Bank helpful. Therefore, it was not appropriate to reduce the amount recoverable for disbursements, as the DO had done, in the absence of a detailed worklog that one might expect of a solicitor. Instead, the court looked for whether there was sufficient evidence from other materials provided that the work had been done and was reasonable.