Private prosecutions after the Post Office debacle

Private criminal prosecutions, those brought in the criminal courts by corporate entities or individuals, have increased in recent years as prosecutions brought by the state have decreased. On 22 March 2021 the Court of Appeal began hearing the appeals of 42 former subpostmasters and other Post Office employees following their referral by the Criminal Cases Review Commission (‘CCRC’) in the wake of a successful civil claim brought by over 550 claimants resulting in the Post Office settling the claim for £57.75m, without admitting liability. The Post Office has conceded that 39 of the appeals should be allowed on the basis that the defendants did not or could not have received a fair trial. The scale of the miscarriage of justice will have far reaching consequences for the future of private prosecutions. 

The Background

Between 1991 and 2015 there were 918 successful prosecutions brought by the Post Office against subpostmasters, subpostmistresses and other employees.

The prosecutions for fraud and kindred offences were based in large part on software called Horizon. As long ago as 2012 the Post Office commissioned an independent review of the operation of Horizon in response to concerns raised by the pressure group Justice for Subpostmasters Alliance and investigative journalists that flaws in the system were responsible for reported cash shortfalls. The report, from the accountancy firm Second Sight, highlighted faults in Horizon which undermined the safety of the convictions that relied upon its accuracy. This led to the group action which resulted in six High Court cases which took place in 2018 and 2019.

The judgment in Bates v Post Office Ltd (No.3: Common Issues) [2019] EWHC 606 (QB) delivered by Mr Justice Fraser was highly critical of the Post Office stating that it showed “oppressive behaviour” in response to claimants who had been dismissed for accounting errors they blamed on the Horizon system [§517]. He went on to say that the submission provided by the Post Office paid “no attention to the actual evidence, and seem to have their origin in a parallel world” [§138], that the Post Office “seemed to adopt an extraordinarily narrow approach to relevance, generally along the lines that any evidence that is unfavourable to the Post Office is not relevant” [§34], feared “objective scrutiny of its behaviour” [§28] and operated with a “culture of secrecy and confidentiality” [§36].

The implications of such comments to the safety of any convictions resulting from Post Office prosecutions where the Court and defendants proceed on the basis that the prosecutor is objective, impartial and fair minded is self-evident. It is therefore perhaps no surprise that prior to handing down judgment in Bates v Post Office Ltd (No.6: Horizon Issues) [2019] EWHC 3408 (QB) on 16 December 2019 Mr Justice Fraser announced that he would be referring the matter to the Director of Public Prosecutions because he had “very grave concerns regarding the veracity of evidence given by Fujitsu employees to other courts in previous proceedings about the known existence of bugs, errors and defects in the Horizon system”. As a result of this referral the CCRC referred 47 Post Office conviction cases to the Court of Appeal.

The Post Office as a private prosecutor 

The Post Office is in a perhaps unique position as a private prosecutor, and it is that unique position that gave the CCRC the greatest cause for concern upon its referral to the Court of Appeal. Historically the Royal Mail was a public authority. Following the Postal Services Act 2011 a majority of shares were floated on the London Stock Exchange. The government sold its remaining shares in 2015 thereby ending 499 years of state ownership.

Royal Mail solicitors are believed to the earliest known formal investigators and prosecutors in the world and their origins can be traced as far back as 1683. With the introduction of the Penny Black in 1840, the first postage revenue stamp, postal services became more accessible to members of the public and postal traffic volume rose. Inevitably so too did associated crime. In 1883 the Missing Letter Branch was renamed the Confidential Enquiry Branch, later becoming the Investigation Branch. The investigations undertaken were serious and varied, including a key role in the detection and capture of the Great Train Robbers.

Following full privatisation in 2015 the Royal Mail Group retained its investigative branch and its legal department and continued to prosecute about 150 cases per year as a private prosecutor. While being granted no investigative powers it has regularly undertaken joint investigations with the police and other investigative bodies that do have statutory investigative powers. It was granted access to the Police National Computer system for intelligence and prosecution purposes. It had financial investigators appointed by the National Crime Agency for the purposes of undertaking financial investigations for restraint and confiscation proceedings, and Royal Mail Group was included within the list of “Relevant Public Authorities” under the Regulation of Investigatory Powers Act 2000 designated to grant authorisations for the carrying out of directed surveillance to investigate crime.

The Report of the Justice Committee

On 3 June 2020 the Chair of the CCRC, Helen Pitcher, wrote to the Chair of the Justice Committee to ask if the Committee would undertake a formal review of the circumstances in which and safeguards in place where an organisation is allowed to act as a prosecutor when it is also the victim and the investigator of an alleged offence. The Committee commissioned an inquiry into the effectiveness of the safeguards in place to regulate private prosecutions and it received evidence from lawyers, investigators, experts, the Crown Prosecution Service and the CCRC.

The Committee reported on 2 October 2020 and found that “the lack of internal or external oversight of the Post Office’s approach to prosecutions is an issue which speaks to a broader concern over the growing numbers of private prosecutions”, and that:

“Overall, it is difficult to escape the conclusion that the organisational structure of the prosecutorial system in England and Wales is rather haphazard. An increase in private prosecutions is likely to make that situation worse. Without effective oversight of the system as a whole, the Government is going to struggle to identify any reforms that could make the overall prosecutorial system work more effectively and deliver better outcomes for the public and for access to justice.”

The entirely internal nature of the Post Office’s investigative and prosecutorial system had led to a blinkered approach and while the Committee did not receive any evidence to indicate that any other private prosecutors suffered from the same problems it concluded, inter alia, that:

“The startling figures on the scale of the Post Office’s prosecutions, together with concerns raised by the Environmental, Food and Rural Affairs Committee in relation to the RSPCA in 2016 and reports that the number of private prosecutions is rising, justify a proactive approach to examining the effectiveness of the regulation of this area of the criminal justice system.”

“There is a strong case that organisations which bring significant numbers of private prosecutions should be subject to inspections. If an organisation is found to be misusing the power to bring private prosecutions, then the body responsible for inspecting all prosecutors and enforcing the code, be it the CPS, HMCPSI or another public body, should be able to remove the right of an organisation to bring a prosecution, or to require them to obtain consent from the Attorney General or the DPP before they can initiate a prosecution.”

The Committee made a number of recommendations, including that:

“…the Government should urgently review funding arrangements for private prosecutions in order to address the inequality of access to the right; to ensure a fair balance between the prosecutor and the defendant; and to ensure the most cost-effective use of public funds…”

The ability of a private prosecutor to recover its costs irrespective of whether the prosecution results in a conviction, and at entirely different rates to a legally aided defendant, has long been seen as conferring an unfair advantage to the private prosecutor. Other recommendations included introducing a binding code of standards enforced by a regulator that applies to all private prosecutors and investigators.

Conclusions

In R v Zinga [2014] 1 WLR 2228 Lord Thomas of Cwmgiedd CJ said at paragraph 57:

“At a time when the retrenchment of the state is evident in many areas, including the funding of the Crown Prosecution Service and the Serious Fraud Office, it seems inevitable that the number of private prosecutions will increase, particularly in areas relating to the criminal misuse of intellectual property. In the overwhelming majority of such cases, a prosecution will serve the public interest in addressing such criminal conduct.”

That prediction was justified, and in part may have been a self-fulfilling prophecy, but the revelation of how the Post Office investigated and prosecuted their own employees should be cautionary. The scale of the miscarriage of justice and the effect on those who were plainly of character good enough to fulfil their responsibilities was reflected in the settlement with the group claimants. It may seem superficially attractive to allow corporate entities to fill the void left by a chronic lack of public investment in all aspects of the criminal justice system but the pitfalls exposed by the Post Office debacle has laid bare the problems that may exist when criminal prosecutions are brought by the victims of the alleged crime and without sufficient transparency and safeguards for the defendant.

In the wake of this scandal, private prosecutors or investigators are unlikely to be trusted with the same armoury of investigatory weapons available to the state but given that already scarce resources available to police and the Crown Prosecution Service for the public investigation and prosecution of crime one can expect that the trend of private prosecutions will continue to be upward.

The government is almost bound to accept the recommendation made by the Committee to limit the level of costs recoverable by a private prosecutor and must surely impose further regulatory safeguards in private prosecutions to prevent such abuses in the future.

It is to be hoped that when the Court of Appeal gives judgement in the remaining cases being heard this week it will be appropriately critical of the insular working of the Post Office legal and investigatory departments. The Court will also no doubt make strong recommendations for the conduct of private prosecutions in the future. However, this decision cannot mark the end of this process of reform; it is the responsibility of government to provide adequate legislative safeguards in relation to both the investigation and prosecution of future defendants.

Private prosecutions have an historic and important place within the criminal justice system, the issue for a private prosecutor going forward is whether the burden of compliance will be worth the expenditure which may no longer be recoverable from the public purse.

Rupert Bowers QC leads the chambers Business Crime & Investigations team in Doughty Street maintaining a practice in financial crime and extradition. Tayyiba Bajwa has a busy criminal practice representing clients accused of a wide range of criminal offences and appears regularly in the youth, magistrates’ and Crown Court.

For more information on both Rupert and Tayyiba, contact our Senior Crime Practice Manager, Matthew Butchard.