Justice Select Committee
In July 2020, the House of Commons Justice Select Committee launched an inquiry to assess the sufficiency of the safeguards surrounding the use of private prosecutions in the criminal justice system, specifically, the circumstances and safeguards where an organisation is allowed to act as a prosecutor when it is also the victim and the investigator of an alleged offence.
The inquiry was launched further to referral by the Criminal Cases Review Commission (CCRC) of 47 Post Office workers’ convictions for appeal, scores of sub-postmasters having been convicted of false accounting, theft or fraud on the basis of flaws in the Post Office Horizon IT system.
The inquiry was conducted against the backdrop of an increase in the number of private prosecutions and the associated costs of bringing private prosecutions.
The Committee received evidence from a number of interested parties, including lawyers that specialise in private prosecutions, investigators, legal experts, the Crown Prosecution Service and the CCRC. 
The Government’s (MoJ) response to the Recommendations in the Justice Select Committee Report on Safeguards in Private Prosecutions was published on 4 March 2021.
Government’s headline response
The Government welcomed the Committee’s conclusion that ‘existing safeguards in place to regulate private prosecutions are effective at filtering out weak claims’, and that ‘the judicial process that applies to all prosecutions ensures that private prosecutions are rigorously tested’.
The framework around which the Government’s Recommendations must be considered is, in our view, importantly stated in its agreement that “not every offence worthy of prosecution can be prosecuted by the CPS, SFO or other appropriate public authority, there are circumstances where prosecutions brought by victims of crime themselves (whether corporate or individual) still have a valuable part to play”. The prosecution of fraud offences is arguably the area of crime most affected in this context.
Fraud is costing businesses and individuals in the UK £130 billion each year, according to The Financial Cost of Fraud Report 2019, researched and published by national audit, tax, advisory and risk firm, Crowe, in conjunction with the Centre for Counter Fraud Studies at the University of Portsmouth. This is a 56.5% increase in losses since 2009.
Traditionally, when a person or a company is accused of fraud, criminal proceedings are usually brought as a result of a successful police investigation and prosecution by the Crown Prosecution Service (CPS) or the Serious Fraud Office (SFO). However, budget cuts to the police and CPS in recent times has limited the prioritisation of fraud investigations and prosecutions as reports continue to rise. A private prosecution can allow an individual access to justice that is otherwise inaccessible through traditional state law enforcement avenues. The confiscation regime can ensure through compensation that the victim is compensated for their financial loss and the defendant denied the proceeds of their criminality. The individual’s right to access justice is preserved through this private mechanism.
Recovery of costs
A concerning aspect of the Government response to the Committee Report concerns the private prosecutor’s ability to recover the costs of a private prosecution. Specifically, the Government’s agreement with the Committee that “the present arrangements for funding private prosecutions are inequitable as between prosecutors and defendants, and do not always represent a cost-effective use of public money”.
The Government agreed that the costs recoverable by a private prosecutor from central funds should be limited in the same way as costs recoverable by an acquitted defendant, by being capped at legal aid rates.
The Government intends to reflect further and, if appropriate, consult, on whether there should be a wider discretion to withhold or reduce payment of a private prosecutor’s costs in the event of an acquittal.
Provision for the recovery of costs
The jurisdiction to make an order for costs is provided by section 17 Prosecution of Offences Act 1985 (“POA”). Section 17 provides that in any proceedings in respect of an indictable offence, the court may, order the payment out of central funds of such amount as the court considers reasonably sufficient to compensate the prosecutor for any expenses properly incurred by him in proceedings. While the power to order payment out of central funds is discretionary, the indication is that an order should be made to recover what is “just and reasonable” unless the prosecutor has acted improperly or is guilty of misconduct.
Recovery of costs dependent on acquittal
A criminal court when considering whether to convict applies the test: is the offence proved beyond reasonable doubt? That an allegation is not, in the end, proved to that high standard does not of itself mean that that the prosecution was wrongly brought at the outset; such that a private prosecutor should be penalised by having costs refused. There are safeguards to prevent against the recovery of costs where there has been misconduct or where it is found that the prosecutor has commenced proceedings without good cause; the event of an acquittal is neither. Provided there was, at the outset of the proceedings – and that there remained – a realistic prospect of conviction, and that the prosecution was – and remained – in the public interest, it is quite correct that a prosecution is pursued. That a jury is subsequently unsure of a defendant’s guilt does not alter that fact.
A cause for concern
The Government’s proposals are a source for concern, particularly in the context of increased reports of financial crime and budget cuts to traditional law enforcement agencies. To limit the ability of the private prosecutor to recover costs in the proposed way risks comprising the rights of individuals and charities, for example, to access justice and risks acting as a deterrent to potential private prosecutors.
The Crime Survey for England and Wales (CSEW) estimated that there were 3,863,000 fraud offences against adults in England and Wales in the year ending June 2019. The number of reported fraud offences incorporates fraud offences collated by the National Fraud Intelligence Bureau (NFIB) from three reporting bodies: Action Fraud, Cifas and UK Finance. In the year ending June 2019, 740,845 offences of fraud were reported. The CSEW estimates that 15% of fraud offences were reported to the police in the year ending March 2019 of which 12% of victims dealt with the matter privately/themselves; and 3% considered the police or Action Fraud would not have been bothered/interested. 
Private prosecutors are very often left with little option but to pursue a private prosecution as the only route to justice. They do so having suffered financial loss, as victims of the substantive fraud, and are required to pay the costs of a private prosecution which are not inexpensive. In circumstances where traditional law enforcement authorities are admittedly under resourced, private prosecution can be seen to be working very actively alongside public prosecution bodies to preserve access to justice. The Government’s proposals in relation to costs recovery puts this role at risk.
 The right to bring a private prosecution is provided by section 6 of the Prosecution of Offences Act 1985 (“POA”). A private prosecution can be brought by any private individual or body – for example a company, a charity or a department store.
 https://www.ons.gov.uk/aboutus/transparencyandgovernance/freedomofinformationfoi/fraudThe ONS does not hold data on the cost of fraud to the UK economy