Private prosecution is one of the hottest topics in fraud litigation, yet very few people have applied it in the Caribbean. That could, and should, change, particularly for economic crime and for the purposes of asset recovery.
Instances of fraud are rising exponentially across the globe. The Financial Cost of Fraud Report, produced by UK-based accountants Crowe and the Centre for Counter Fraud Studies at the University of Portsmouth, records that in 2019 fraud cost the global economy £3.89 trillion, with losses rising by 56 per cent in the past decade alone.
It is abundantly clear that policing and public authorities simply cannot keep up. In the UK it has been reported that just one in 500 frauds are being prosecuted by police, despite a 20 per cent rise in the crime.
The answer, at least in part, may lie in the form of private prosecutions. In D Ltd v A , the English Court of Appeal observed the importance of private prosecutions in cases of complex fraud where “in reality, the public authorities sometimes may lack the resources and/or inclination to commence a public prosecution”.
In England, private prosecutions have proved to be a useful option for seeking justice on behalf of victims of serious economic crime. In the English case of R (Virgin Media Ltd) v Zinga , the Court of Appeal (Criminal Division) confirmed that it was lawful for a private prosecutor to commence confiscation proceedings in order to deprive the defendant of the proceeds of his crime under section 6 (making confiscation orders) of the Proceeds of Crime Act 2002 (POCA). The Court determined that “prosecutor” was to be read in a wide sense and could include private prosecutors.
Following Zinga, the Court of Appeal in Ketan Somaia v Regina  confirmed that private prosecutors may also seek compensation orders for the victims of serious crime. The potential significance of this decision in the context of fraud and asset recovery work cannot be overstated; while confiscated proceeds generally inure to the benefit of the Crown, compensation is paid directly to the victim.
As in many other jurisdictions, private citizens in the Commonwealth Caribbean have the common law right to commence private prosecutions for criminal offences. There should be no reason, therefore, why private prosecutions cannot be used across the Caribbean to vindicate the rights of victims of fraud.
For example, in the British Virgin Islands (BVI) the effectiveness of criminal confiscation was clearly demonstrated in the IPOC case. Following 17 months of investigation by the authorities in the BVI and Bermuda, in 2008 the court confiscated more than US$45 million from IPOC, a Bermuda-based mutual fund which pleaded guilty to serious fraud-related crimes. This remains possibly the largest confiscation order ever made in an overseas territory of the UK.
In cases of fraud a private prosecutor may be able to (a) commence proceedings to establish that a predicate offence has been committed (thus engaging the provisions of the local proceeds of crime legislation); and (b) request that confiscation and compensation orders be made.
It is important to note that in many cases the assistance of the enforcement authorities would still be required, given that the investigative powers provided for in certain legislation would not necessarily be available to a private prosecutor. This would give the victims of economic crime a huge advantage: not only would they have access to the expertise of those private sector firms who specialise in the investigation of fraud and asset recovery but the investigation would also be assisted by an enforcement authority with wide-ranging statutory powers.
In instances where a private prosecution is unable to attract support from the police or other public authority in an investigation, there are direct powers that are available. Norwich Pharmacal orders; 28 U.S.C. §1782 discovery applications in the United States in aid of a pending or attempted private prosecution; and the use of private investigators are all available tools for gathering in facts and evidence.
There are, of course, many other potential advantages to private prosecutions compared with public prosecutions. Access to the criminal courts is likely to be speedier and hearings are likely to be shorter. They are not reliant on budgetary constraints and the victims will have more control over the course of the prosecution which will often be more focused and targeted.
Private prosecutions can also act as a powerful deterrent to potential wrong-doers. As well as confiscation and compensation orders, a successful prosecution may result in any number of criminal sanctions, including custodial sentences and financial penalties – just as it would for a public prosecution. A successful prosecution also seeks justice in a wider sense: it serves a public good.
There are, however, important restrictions that must be borne in mind. For example, the Court of Appeal of Trinidad and Tobago has confirmed that such right is not available where:
The English cases have held that whether a prosecution is by way of an individual grievance or in the public interest is to be determined by the nature of the offence created by the relevant statute – and the prosecution must establish a public interest and benefit, rather than a purely private interest in criminal proceedings. Importantly, as the English Court of Appeal in Zinga noted, in the overwhelming majority of cases the pursuit by a private prosecutor of confiscation proceedings to confiscate the proceeds of crime would also serve the public interest.
For most, if not all, jurisdictions within the Commonwealth Caribbean, the constitutions provide the Director of Public Prosecutions (DPP) with the power to take over and continue private prosecutions when it is considered desirable to do so. Once proceedings have commenced, this power also includes the ability to discontinue the proceedings at any stage before judgment is delivered.
In some jurisdictions there is a statutory power to challenge the decision of a DPP to discharge a person who has been committed to stand trial (for example, section 10 of Trinidad and Tobago’s Criminal Procedure Act, Chap. 12:02). In the absence of a statutory power, the courts have held that a DPP’s actions are capable of being judicially reviewed and the Privy Council has confirmed that this may include a DPP’s exercise of the power to enter a nolle prosequi with a defendant in a private prosecution (Jewan Mohit v DPP  UKPC).
The Eastern Caribbean Court of Appeal[ii] has confirmed that a DPP’s decision may be vulnerable to judicial review if the relevant power was exercised in the following ways:
Private prosecution is one of the most prominent trends in fraud litigation in London, but not yet in the Caribbean. Most, if not all, the instances of private prosecutions in the region are for relatively minor, unsophisticated offences.
As can be seen in the IPOC case, the criminal courts in the Caribbean are more than capable of delivering justice to victims of complex economic crime.
It must be borne in mind, however, that pursuing a private prosecution is an extremely serious step to take and not one that should not be taken lightly. Victims should be informed of the possible adverse cost consequences of an unsuccessful prosecution[iii] and, if successful, the extent to which they may recover their costs[iv]. Further, whilst there is nothing necessarily preventing civil and criminal proceedings from being pursued simultaneously, it is important to note that the existence of parallel proceedings may attract allegations of abuse of process. Additionally, it is important to be mindful of the risk of a claim for damages grounded in the tort of malicious prosecution.
In England there is no formal test that must be satisfied before a private prosecution can be commenced. However, in Zinga, it was observed that:
“… Advocates and solicitors who have conduct of private prosecutions must observe the highest standards of integrity, of regard for the public interest and duty to act as a Minister for Justice…in preference to the interests of the client who has instructed them to bring the prosecution.”
It is difficult to predict whether private prosecutions will increase in popularity in the Caribbean –although the need for, and potential benefits of, such prosecutions are clear. However, great care should be taken before commencing a prosecution, as the prospects of success and whether a prosecution serves the public interest should be paramount and overarching considerations.
[i] The Inspector of Factories v NH International (Caribbean) Limited and Ors Civil Appeal No: 229 of 2009 and Safeway Access Support Systems v The Inspector of Factories Civil Appeal No: 218 of 2010 .
[ii] Michelle Andrews PC 16 of New Prospect v DPP Claim No. HCVAP 2008/003
[iii] For example, in England & Wales section 3 of the Costs in Criminal Cases (General) Regulations 1986 provides that the Court may order that the payment of any costs incurred as a result of any unnecessary or improper act or omission by or on behalf of any party to the proceeding be met by the party responsible for that conduct. In the absence of directly applicable local legislation, the Caribbean courts may approach the position on costs in a different way.
[iv] In England such costs may be paid out of Central Funds: this is probably less likely to be the case in the Caribbean jurisdictions.
Jamie is a barrister for Martin Kenney & Co, asset recovery legal specialists based in the BVI. He joined Martin Kenney & Co. in March 2009 and has since worked on numerous international fraud-related insolvency matters, including complex discovery applications in jurisdictions including the Cayman Islands, Belize as well as the BVI.