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Concurrent civil and criminal cases - a new approach?

Professional clients may find themselves facing both civil and criminal proceedings on the same issue and this can create particular difficulties for them. If concurrent civil, criminal and or regulatory proceedings are a possibility, then it is important that the client has a legal team that understands the broader legal context of any litigation they face.

A good example of when concurrent civil and criminal proceedings can be problematic can be found in the context of investigations by HMRC. Following a detailed investigation, HMRC may launch criminal proceedings which, by their nature, can last some time before they are concluded. At the same time, if cash has been recovered in the investigation then HMRC may apply to the Magistrates' Court for the cash to be surrendered under the civil cash forfeiture provisions.

Following a police investigation it is common for cash forfeiture proceedings to be adjourned pending the outcome of a criminal trial. The reasons for this are simple: firstly, in the event of a conviction it is likely that cash forfeiture proceedings will not be contested, saving time and money for the applicant. Secondly, the applicant will not want to do anything in the civil proceedings which might jeopardise the criminal trial.

However, a new approach by HMRC has led to them seeking to complete civil cash forfeiture proceedings whilst criminal proceedings are ongoing, citing a backlog of cases that they wish to conclude. This can lead to many problems for the respondent to such an application, such as the fact that they are likely to need to give detailed evidence under oath as to the alleged criminality at a much earlier stage than criminal proceedings would have required them to. This is also likely to be before proper disclosure has been made by the prosecutor of any material that might assist them. Any concessions made by a respondent in this situation in cross-examination are likely to be used against them in the criminal trial.

Generally speaking, criminal lawyers have relied on the case of R. v Payton [2006] EWCA Crim 1226 to support applications to adjourn civil proceedings pending the outcome of a concurrent criminal case. In that case, Pill L.J. held that:

'It is accepted that 'close liaison' would be expected between investigators in the civil and in the criminal proceedings. It is submitted that 'the overwhelming likelihood is that the police would lodge an application for forfeiture (and so effect the detention of the cash and the preservation of the status quo) but then seek an adjournment of the application until criminal proceedings (including any appeal) are concluded'" [26].

'It is, however, important that care is taken to ensure that the fair trial of a defendant is not prejudiced by anything arising in civil proceedings in the magistrates' court and steps should be taken accordingly' [31].

More recently, HMRC have deployed the subsequent Court of Appeal authority of Mote v Secretary of State for Work and Pensions [2007] EWCA Civ 1324 to support the progression of civil cash forfeiture despite the existence of a parallel criminal case. In Mote, having considered Payton, Richards L.J. held that the fact that the prosecution would receive an opportunity to rehearse their case did not in of itself give rise to any serious prejudice to a respondent:

'In general, as it seems to me, the fact that the prosecution has had a previous opportunity to rehearse its case cannot be said to give rise to substantial prejudice to the defendant in a subsequent criminal trial. If it were otherwise, it would provide a ground of objection to a retrial in criminal proceedings where the jury have been unable to agree in the first trial or where a conviction in the first trial has been quashed on appeal. If this were a point of substance, I would also expect it to have been mentioned in the previous cases.' [36].

Accordingly, practitioners who wish to adjourn civil proceedings pending the conclusion of criminal proceedings would be well advised to identify a clear and specific prejudice to their client beyond the fact that their client would be at jeopardy of giving evidence twice on the same facts. This is particularly so under the new culture of the criminal courts which expects defendants to outline their case in detail at a much earlier stage that was previously required.