[2025] EWCA Crim 1289

The submissions to this court:

The respondents, the defendants in the continuing criminal proceedings, have made no submissions and taken no part in this application for costs.

For the Lord Chancellor, it is submitted that this court should reduce the amount of the costs claimed, because of what are said to be serious deficiencies in the application for costs; and/or that this court should make an order pursuant to s17(2A) limiting the costs to those which would have been charged to the state if the CPS had conducted the prosecution; or alternatively, should direct that the costs of the solicitors’ work should be based on the guideline rates applicable to National Band 1, and that the costs of counsel should be those which represent a competitive rate in the market for an appeal of this kind.

The submissions on behalf of the Lord Chancellor emphasise what was said in Zinga at [22] (see paragraph 38 above), which – it is said – impose requirements that an applicant must set out what steps were taken to ensure that the terms on which legal representatives were engaged were reasonable, and what steps were taken to involve state prosecuting authorities. It is submitted that the importance of the first of those requirements is illustrated by Law Society, and the importance of the second is illustrated by Fuseon, TM Eye and Chapter 4. It is further submitted that a failure to make a properly-formulated application may have serious consequences, because after 56 days from the date when the order under s17(1) is made, the trial court can no longer make any correction under the slip rule, and there is only limited scope for the Lord Chancellor to apply for judicial review of the order.

In the present case, it is submitted, the private prosecutors failed to state in their application that they had taken no steps to involve the police and the CPS before commencing the prosecution, and failed to set out what steps they had taken to test the market before instructing the solicitors and counsel. Complaint is made that the private prosecutors did not mention in their application the fact that they and the Lord Chancellor are currently engaged in assessment proceedings in respect of costs incurred in applying for restraint orders.

The Lord Chancellor submits that if, as happened here, a substantial prosecution is commenced without seeking to involve the police, and/or without asking the CPS to prosecute before issuing the summonses, then the private prosecutors’ costs awarded pursuant to a s17 order should be capped at CPS rates. It is further submitted that the private prosecutors, on their own account of their actions, carried out no structured tendering process before instructing either the solicitors or counsel.

The core submission on behalf of the Lord Chancellor is that the public purse should not have to pay increased costs when the private prosecutors took no steps to involve the state prosecuting authorities. In accordance with the test stated by Leggatt J (“the lowest amount which it could reasonably have been expected to spend in order to have its case conducted and presented proficiently, having regard to all the relevant circumstances”: see paragraph 43 above), it is submitted, the amount “reasonably sufficient” to compensate the private prosecutors should be the costs which would have been incurred by the CPS.

The Lord Chancellor does not accept that the private prosecutors’ selection of the solicitors was reasonable; but even if it was, it is submitted, the solicitors were not chosen by market tender. It is submitted that part of the decision of the Costs Judge in Allseas, namely that quoted in the last sentence of paragraph 53 above, was made in error, because the costs of a private prosecutor must be limited to that which is reasonably sufficient by reference to the market.

We note that the Lord Chancellor has indicated a willingness to bear his own costs of intervening in this application for costs.

In response, the private prosecutors deny that their application for costs was defective, and submit that there is no basis for the court to make an order under s17(2A) – a type of order which, it is submitted, should not be made lightly. They observe that any costs which were unreasonably incurred, or were unreasonable in amount, would in any event be disallowed on the assessment of costs pursuant to an order under s17(1). They accept that Zinga at [22] identifies factors which will be relevant to that assessment; but they deny that that paragraph sets down hard and fast rules, any breach of which would result in a reduction in the award of costs which would otherwise be reasonable.

The private prosecutors submit that it was perfectly reasonable for them to commence this prosecution without having first referred to the police or the CPS. They point to a comment by the CPS senior prosecutor, in his letter referred to in paragraph 10 above, that the way in which the case had been handled to that date demonstrated that the international reach of the solicitors “can have benefits to a prosecution which a public prosecutor would find it harder to match”. The private prosecutors emphasise that they instructed the solicitors to act in the investigation of the suspected fraud at least nine months before this prosecution was commenced, and that during that period the solicitors had investigated matters both in the UK and elsewhere, and had made two applications for “Norwich Pharmacal” orders against UK banks. They submit that later instruction of a different firm would inevitably have resulted in duplication of work, delay and increased cost.

The private prosecutors accept that the market for legal services is obviously relevant to the question of what costs it is reasonable to incur; but so too, they submit, is the reasonableness of their decision to instruct the solicitors. They submit that it was reasonable for them to pursue the prosecution privately and to instruct legal representatives for that purpose: they contend that this is not a case in which the CPS was willing and able to prosecute, but was given no opportunity to do so. Relying in particular on Fuseon, they submit that CPS rates can therefore have no relevance as a comparator. They emphasise that there is no requirement in law for a private prosecutor to report a matter to the state authorities, and submit in any event that it is far from clear that the CPS would have wanted to take over this complex prosecution even if they had been notified before it began. They rely on the senior prosecutor’s 2023 letter (see paragraph 10 above) as an indication of the likely response of the CPS if invited in March 2021 to take on this prosecution.

As to the rates at which the solicitors’ work should be paid, the private prosecutors accept that a failure to test the market may make it more difficult for a private prosecutor to satisfy a determining officer that the costs incurred were reasonable. They contend, however, that Zinga at [22] does not require that a s17(2A) order should be made, simply because no sufficient tendering exercise was carried out, even though it was objectively reasonable to instruct particular solicitors at a particular cost. To make a s17(2A) order in such circumstances would amount, it is submitted, to an unfair penalising of the private prosecutors. On the facts here, it is submitted, the conducting of a tendering process before commencing the prosecution would have wasted time (in circumstances where it was important to act quickly, in particular to obtain restraint orders), and would likely have resulted in increased costs if different solicitors had been instructed who would have had to read into the case.

The private prosecutors submit that it was reasonable for them, resident abroad, to select solicitors based in London, and to accept the recommendation of their investigators (who would have to have a good working relationship with whichever solicitors were instructed). They point in this regard to Wraith at p141D, where the fact that a plaintiff had sought advice, and acted in accordance with that advice, was recognised as a relevant factor in considering the reasonableness of his decision to appoint those representatives. In the present case, they submit that, even if others based outside London may have been capable of conducting the proceedings, that does not affect the reasonableness of the decision to instruct the solicitors. It is therefore submitted that the appropriate comparator is the Guideline Hourly Rates for solicitors based in Central London.

As to counsel’s fees, the private prosecutors submit that the appropriate test is that stated in Simpsons. They suggest that the hourly rates charged by counsel are less than those which were allowed in Evans, uprated for inflation. They submit that the appropriate rate can properly be determined on assessment under s17(1), and that there is no justification for a reduction pursuant to s17(2A).

As to the suggested deficiencies in their application, the private prosecutors submit there is a sharp contrast between their detailed application (which fully complied with the requirements of Crim PR r45.4) and the inadequate applications made in TM Eye and Chapter 4.

Both the private prosecutors and the Lord Chancellor are content that this court should make an order pursuant to s17(2C) for the determination of the amount of the costs to be awarded from central funds. They differ, however, as to who should carry out that determination. The private prosecutors submit that it should be the Costs Judge who is already seized of the assessment of costs in relation to the contempt proceedings arising from breaches of the restraint order. The Lord Chancellor submits that it should be a determining officer, in accordance with reg 5 of the Costs General Regulations.

We are grateful to counsel and those instructing them for their submissions. Having reflected on them, our conclusions are as follows.