Laying down the law: The rules of the game

6th October 2014

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  • Business & Industry ,
  • Prosecution ,
  • Corporate fine


David Trevelyan

Simon Colvin says businesses facing enforcement action need to better understand how regulators and the courts operate

How often have you heard of a business that has suffered an environmental incident receiving “assurance” that everything will be “all right” if they cooperate with the regulator only to learn that this is not the case? Once the immediate impact of the incident has been addressed, a formal interview under caution follows, and then a prosecution.

The company might object, arguing that it was told cooperation would satisfy the regulator. Unfortunately that objection will not prevent the regulator pursuing a prosecution and it is very unlikely to persuade a court that it should not continue with the court proceedings.

Similarly, how often have you heard of regulators taking many months to reach a decision in relation to enforcement action and a possible prosecution?

So when will a regulator’s assurance that it will be “all right” be enough to persuade a court that it would be unfair to continue with the proceedings and to issue a permanent stay? Or, in what circumstances will a delay on the part of a regulator to pursue an investigation or enforcement action be enough to persuade a court that it would be unfair to continue with a prosecution and to stay the court proceedings? The answer is hardly ever.

Justice for all

A court’s ultimate objective is to ensure the accused receives a fair trial. This is in line with art 6 of the European Convention on Human Rights and the principles of natural justice that have been developed in England. To stay court proceedings and bring them to an end, a court must be satisfied that it would be unfair for the accused to stand trial.

Case law (Derby crown court, ex parte Brooks – see panel) has established that abuse cases fall into one of two categories:

  • those in which the prosecutor can be said to have manipulated or misused the rules of procedure; and
  • those in which there has been inordinate and inexcusable delay which has actually prejudiced the defendant.

There are generally two key questions that have to be considered when deciding whether a delay or the actions of the regulator amount to an abuse:

  • Have the actions of the regulator undermined the rule of law and the administration of justice?
  • What is the extent of the prejudice to the accused?

It is for the accused to demonstrate on the balance of probabilities that there was an abuse. Even though the standard of proof is the balance of probabilities (as opposed to beyond all reasonable doubt), the courts have made it clear that trials will go ahead unless there are compelling reasons for them not to.

For a delay to amount to an abuse of process it must be unjustified and it must result in genuine prejudice and unfairness. Again, case law (Bell v DPP of Jamaica [1985] AC 937) has established that there are certain factors to be considered in order to decide whether a delay amounts to an abuse. These are the length of the delay, the reason for the delay, and the prejudice suffered by the accused.

If the delay has been months or even years and there is no justifiable reason for this – for example, the completion of wider investigations – and the accused has suffered prejudice, perhaps because they can no longer call an eye witness or because evidence is no longer available, they might be able to successfully raise an abuse argument on the basis of delay.

Legitimate expectation

In some circumstances, it can be argued that “assurance” given by the regulator at the time of an incident gives rise to a “legitimate expectation” that no further action will follow.

Case law suggests that breach of an assurance is not likely to constitute an abuse unless there has been an unequivocal representation by the regulator that the defendant will not be prosecuted and that acting on that advice has been to the detriment of the defendant.

Clients often describe situations that would fall into the legitimate expectation category of abuse. But without clear evidence it is hard to successfully raise such arguments. The need for an unequivocal representation highlights the importance of keeping contemporaneous notes of any conversations with regulators.

A common ground for suggesting there has been reliance to the detriment of the accused is where they have cooperated and shared information with a regulator in the mistaken belief that no action will follow. Where a business takes such an approach, it would be worth communicating the reasons for cooperating to the regulators in writing at the time.

In the long run, it is up to individuals and their businesses who might find themselves subject to enforcement action to understand the “rules of the game”.

Abuse of process – Derby crown court, ex parte Brooks

This case ([1985] 80 Cr App R 164) focused on a court’s power to halt a prosecution as an abuse of process. In his ruling, Sir Roger Ormrod said: “The power to stop a prosecution arises only when it is an abuse of a process of the court. It may be an abuse of process if either (a) the prosecution have manipulated or misused the process of the court so as to deprive the defendant of a protection provided by the law or to take unfair advantage of a technicality; or (b) on the balance of probability the defendant has been, or will be, prejudiced in the preparation or conduct of his defence by delay on the part of the prosecution which is unjustifiable.”

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