Elie Taktouk v Benherst Finance Limited and Chestone Industry Holding, R (on the application of) [2025] EWCA Crim 1473

[2025] EWCA Crim 1473Case No 202304206 B4
IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT AT SOUTHWARK
HHJ Milne KC
T2019 7030
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 19/11/2025
Before
LORD JUSTICE EDISMR JUSTICE SAINIHIS HONOUR JUDGE LEONARD KCSitting as a judge of the Court of Appeal Criminal Division
Between
ELIE TAKTOUKAppellantTHE KINGRespondent
Kennedy Talbot KC and Simon Teasdale (instructed by Edmonds Marshall McMahon) for ProsecutorRupert Cohen and Jonathan Orde for Lord Chancellor, intervening at the invitation of the courtHearing Hearing date : 20 June 2025
JUDGMENT
[1]These confiscation proceedings arise from a private prosecution for fraud offences brought by Benherst Finance Limited and Chestone Industry Holding against the appellant. The appellant’s appeal was allowed by a judgment handed down on 5 February 2025, see [2025] EWCA Crim 71 (“the Appeal Judgment”). The appeal was based on the availability of fresh evidence which may undermine the court’s determination of the amount available to satisfy a confiscation order.[2]This is the judgment of the court on the prosecutor’s application for an order that their costs of resisting the appeal should be paid out of central funds pursuant to section 17(1) of the Prosecution of Offences Act 1985.[3]The judgment has been delayed because another constitution of the court considered some issues which also arise in this case in R v. BDIand others (“BDI”) in which argument was heard on 10 June 2025. That judgment has now been handed down, see [2025] EWCA Crim [1289]. In it, Holroyde LJ (giving the judgment of the court) sets out the relevant legislation, rules and Practice Directions and examines some previous decisions of this court. The court then, at [75]-[90], set out the principles of general application derived from that material. We are bound by the analysis of the law in that decision, and follow it. It is not necessary for the purposes of this judgment to set out any of that material here.[4]We did, however, invite further written submissions from the prosecutor and the Lord Chancellor following BDI and we have received helpful further submissions from them.

The application

[5]The application was made in writing on 4 February 2025 in anticipation of the judgment on the appeal being handed down on the following day. The relevant rules and practice directions were set out and the submission was made:- “Although whether to make an order is discretionary, the discretion should be exercised to award the Prosecutors their costs, unless they have acted improperly or are guilty of misconduct.”[6]The application said that the prosecutor had not acted improperly or been guilty of misconduct and added this:- “12. It is acknowledged that the Prosecution fell into “error” (per draft judgment at §38) in the disclosure of the intelligence reports and the Court’s criticism is accepted. However, the Court recognised full descriptions were given of these reports in the MG6C served on the defence. Further, the reports were disclosed to the defence as soon as they were requested. The conduct of the Prosecution was therefore far from the “misconduct” falling within the category of fundamental failure to conduct proceedings reasonably, evident in the Costs Practice Direction and/or r.45.4(5), justifying or requiring the Court not to make the order sought.”[7]The intelligence reports are described in paragraph 21 of the Appeal Judgment and paragraph 38 says:- “We would not quash the Order on ground 4, non-disclosure. We consider that the intelligence reports of the investigators clearly were disclosable and that the failure to disclose them by the prosecutor was an error. However, they did appear on the Schedule MG6C and at least in respect of item 00197 the description was such as might have been expected to trigger the interest of defence lawyers scrutinising it. They did not ask for any of these items, and we have had no explanation of that failure. Here the section 23 balance is different, because the evidence is less definitive than that of Dr. Wassim Taktouk. It might have made a difference or it might not. On its own it does not afford a ground for allowing the appeal, but it can be deployed when the Crown Court proceeds afresh and the judge will be able to decide what its significance is.”[8]The application said nothing about any attempts made to ensure that the case was prosecuted by an appropriate state prosecutor, most likely the Crown Prosecution Service. No information was given about how Edmonds Marshall McMahon (“EMM”) were selected to conduct the prosecution, or whether there was any tendering process either involving them or counsel. The importance of these matters and of the prosecutor providing information about them when making an application under section 17(1) has been emphasised in BDI but that emphasis is based on earlier decisions which were available at the time when this application was lodged, in particular R (Virgin Media Ltd) v Zinga [2014] EWCA Crim 1823, [2014] 5 Costs LR 8 (“Zinga”).[9]This Memorandum of Costs was lodged with the application. Prosecuting Solicitors Edmonds Marshall McMahon Costs including: Reviewing appeal grounds dated 20 November 2023 Drafting Respondents Notice dated 4 April 2024 Reviewing new grounds of appeal dated 13 September 2024 Review application for fresh evidence dated 20 November 2024 Drafting second respondents notice dated 8 November 2024 Review second application for fresh evidence dated 20 November 2024 Attendance at hearing Total: £127,234 Counsel Fees Kennedy Talbot KC Appeal Preparing of hearing and attendance of hearing £51,041 £20,000 Total: £71,041 Disbursements Ubiqus transcript of closing Bundles £443.52 GRAND TOTAL £198,718[10]On receipt of this sparse application for a large sum of money, the court gave directions giving the Lord Chancellor leave to intervene and, if she wished to do so, to lodge written submissions and allowed the prosecutors time to respond.[11]This resulted in the provision of further information about the costs bill, including a witness statement from Kate Louise McMahon, prosecuting solicitor, dated 30 May 2025. She explained that the companies who brought the prosecution instructed EMM in 2017 to investigate whether there had been a fraud. At that time, she says, no decision to prosecute had been made. There had been other lawyers involved, but a Swiss firm of lawyers had recommended EMM who had then been instructed. There was no tendering process. A decision to prosecute was not taken until November 2018, which was then supported by advice from Treasury Counsel who considered both parts of the CPS Full Code. By that time EMM had been engaged on the case for 20 months and had carried out a good deal of investigative work. She says it would have been absurd to change lawyers then. She also says that there were very few specialist firms of prosecutors in the market at that time and, she believes, the fees charged to these clients by EMM would probably have been lower than those which other firms would charge. She describes the mechanism for investigating and prosecuting fraud by the police and state prosecutors in this country, then and now, and explains that in her view the chances that this case would have resulted in a prosecution by that route were very slim. The prosecutors did not offer the results of their investigation to the Crown Prosecution Service or police for consideration of a public prosecution at any time until after the appellant succeeded in his appeal in February 2025. This is not mere assertion, because Ms. McMahon gives the basis on which she has formed these views with some supporting evidence.[12]There is also now a set of documents which log the hours worked by lawyers. Ms. McMahon apologises for the oversight in complying with sub-paragraph (5)(b) ofCriminal Procedure Rule 45.4, which provides, by (5) that a prosecutor must supply the following, when making the application:- “(a) a summary of the items of work to date done by a solicitor; (b) a statement of the dates on which items of work were done, the time taken and the sums claimed; (c) details of any disbursements claimed, the circumstances in which they were incurred and the amounts claimed in respect of them.”[13]Finally, for the purposes of this summary of quite lengthy evidence, Ms. McMahon explains that a significant number of costs orders under section 17(1) have been made in favour of these prosecutors in these proceedings. We are concerned only with the costs of the appeal against the confiscation order and not with the costs of the trial and other proceedings in the same case.[14]This helpful material was not provided until the court had, of its own motion, declined to make the order on the basis of the application made, and directed further submissions with the intervention of the Lord Chancellor.

The Lord Chancellor’s submissions

[15]Counsel for the Lord Chancellor set out her concern in this way:- “……this Court is invited to note that, in these proceedings, the Prosecutors have already obtained four costs orders pursuant to s.17 of the 1985 Act for various stages of the prosecution which have been assessed and paid in the sum of £3,847,285.38. So far as those orders are concerned, the LC has no knowledge of the nature of the application for costs which gave rise to them. Having had sight of the application made by the Prosecutors for their costs for this appeal the LC’s overarching concern, given the deficiencies in that application, that substantial numbers of prosecutors are continuing to make applications for costs to be paid out of central funds to Judges based on partial or incomplete explanations of the law is only heightened.”[16]She also submits, rightly, that in this case the application misrepresented the law. BDI of course was not available when this application was lodged, but it states the position relying on an earlier decision and it is convenient to quote that statement which describes the law as it was when this application was made:- “82. First, as is clear from [R. (TM Eye Ltd) v Southampton Crown Court [2022] 1 Cr App R 6] at [51]-[53] (quoted at paragraph 46 above), the court must first consider whether in the exercise of its discretion to make any order under s17(1) of the POA 1985 at all. If it does make such an order, it must be for the payment in full of such sum as the court considers reasonably sufficient to compensate the private prosecutor for the expenses he has properly incurred in the proceedings (for convenience, “the reasonably sufficient sum”). The wording of s17(1) plainly contemplates that the reasonably sufficient sum may be less than the sum claimed. But in addition, in an appropriate case, s17(2A) enables the court to award less than the full amount of the reasonably sufficient sum. There may be good reason to make such a reduction even though a private prosecutor has not been guilty of misconduct.”[17]This contrasts with the statement of the law in the application at [5] above. TM Eye was decided on 30 September 2021. According to Ms. McMahon’s statement at paragraph 104, three section 17(1) costs orders were made in these proceedings after that date. We do not know whether those three applications stated the law in the same way as this one did. If so, that would be a serious defect in them.[18]Since TM Eye CrimPR 45.4 has been amended so that it now contains a new sub-paragraph (6)(c) and reads:- “(b) the court may decline to make a prosecutor’s costs order if, for example, the prosecution was started or continued unreasonably; and (c) the court may decline to make an order if the applicant fails to provide enough information for the court to decide whether to make an order at all and, if so, whether it should be for the full amount recoverable or for a lesser sum.”[19]The Lord Chancellor invites the court either to decline to make an order, relying on 45.4(6)(c) or to make a reduction to the reasonably sufficient sum under section 17(1)(2A).

The Post-BDI submissions

[20]The prosecutor points out what it says is a factual error in BDI at [79] where the court said:- “The public funding of the criminal justice system is inevitably subject to a limit. It follows that, if an order under s17 of the POA 1985 results in a cost to the state which is greater than would have been incurred if the state authorities had undertaken the prosecution, the public funds available for other criminal cases are likely to be reduced.”[21]The prosecutor submits:- “Rightly or wrongly, that is not how Government budgets work. There is no basis for this court to make that finding, or taking that factor into account. To the contrary, the true position, supported by the evidence filed in this case, is that the state has retreated from the investigation and prosecution of this type of fraud, saving public funding far greater than the costs of a handful of private prosecutions conducted at commercial rates. Consequently, as expanded on below, it is the lack of state funding for the investigation and prosecution of fraud which has led to the increase in private prosecutions in this area (and therefore claims for private prosecution costs). Whether or not that is a wise approach by the state authorities, it will not be reversed by restricting the recovery of private prosecutors’ costs.”[22]The prosecutor then advances further submissions about the evidence in this case which, it is said, should lead us to conclude that no state prosecution would have been launched if the case had been referred to the CPS or SFO. It is also submitted that the absence of any tendering process is irrelevant if the rates charged were (as Ms. McMahon says they were) below the market rate.[23]In relation to “CPS rates” the prosecutor submits:- “CPS rates’ are no longer published online, and likely no longer exist given that the CPS website now states that they no longer record their time and “cannot calculate a precise cost for each case” https://www.cps.gov.uk/legal-guidance/costs-annex-1). When it comes to the rates for counsel, the position is much the same. ……..No private litigant, even a large corporate one, can access counsel at CPS or SFO rates, because those rates are not a market rate at all. they are an institutional rate arising from bulk purchasing power, long-term contractual arrangements, and non-commercial fee agreements. To hold a private prosecutor to a fictional rate that only the state can obtain is to collapse the compensatory test under s.17.”[24]In short it is submitted that on the facts of this case a different conclusion should be reached from that in BDI.[25]The Lord Chancellor’s post-BDI submissions restate its position, which is summarised in this way:- “The Lord Chancellor: a) Invites this Court to cap the costs incurred by the Prosecutors in the appeal by referred to CPS rates pursuant to s.17(2A). b) Does not invite the Court to make any specific remark or sanction for the failure to tender and/or test the market prior to the instruction of EMM given that, at the point of their instruction in 2017, the market of providers was restricted to London (firms in Birmingham and Manchester, for example, had yet to offer specialised services for private prosecutions) and determining officers when evaluating what the reasonable sum is for EMM’s costs pursuant to the 1986 Regulations will refer to the guideline hourly rates for London for 2017 as evidence of that market. This is a fact specific concession on the part of the Lord Chancellor which will not apply in respect of any prosecution commenced in the last few years given the market has substantially matured (see, for example, the last sentence of §88 in R v BDI which refers to expertise being found outside London). c) Is content that Counsels’ brief be assessed by the determining officers in accordance with the principles elucidated in its further submissions in §10 (a position with which the Prosecutors agree).”[26]Paragraph 10 of those further submissions said:- “10. The Prosecutors did not test the market prior to the instruction of the Counsel in question. As a consequence they cannot maintain that the fees they charged are reflective of the “market”. The test for the reasonableness of Counsel’s fees is as follows:
“one must envisage an hypothetical counsel capable of conducting the particular case effectively but unable or unwilling to insist on the particularly high fee sometimes demanded by counsel of pre-eminent reputation. Then one must estimate what fee this hypothetical character would be content to take on the brief. (Simpson's Motor Sales(London) Ltd v Hendon Corporation [1965] 1 WLR 112 at 838C)” “one must envisage an hypothetical counsel capable of conducting the particular case effectively but unable or unwilling to insist on the particularly high fee sometimes demanded by counsel of pre-eminent reputation. Then one must estimate what fee this hypothetical character would be content to take on the brief. (Simpson's Motor Sales(London) Ltd v Hendon Corporation [1965] 1 WLR 112 at 838C)”
[27]The Lord Chancellor then submits that the test to be applied in deciding whether to allow costs at private rates or to cap them at state rates is set out in BDI at [89], [96] and [98]. Here, it is submitted, the private prosecutor acted without regard to whether the state was willing and able to prosecute. The question then is that identified in BDI at [98]:- “The onus is on the prosecution to “show that the police and the CPS, if given an appropriate opportunity at an appropriate stage, could not or would not have undertaken the investigation and prosecution of the crimes alleged against the respondents”[28]It has not been suggested that this case was so complex that it was beyond the capacity of the police and CPS to investigate and prosecute had they chosen to do so. The prosecutor is therefore required to show that they “would not” have done it if asked. The Lord Chancellor submits that the evidence falls short of showing that. It certainly shows that they might not have done it, but cannot show that they would not. Discussion The defective application for costs

Discussion

[29]In our judgment it is of considerable importance that applications for orders from central funds under section 17(1) of the Prosecution of Offences Act 1985 comply with the CrimPR and the requirements explained in the authorities, now gathered in BDI. They are effectively made ex parte since the Lord Chancellor does not see them, and the defendant to the criminal proceedings is not interested, except that (at least theoretically) they would have an interest in the state paying the prosecutor’s costs so that they are not ordered to do so themselves. BDI does not make new law. It pulls together many decisions and sets the law out in a helpful way. Nothing in it should take an experienced private prosecutor by surprise. Any person making an ex parte application for public funds has an obligation to be candid with the court and to supply it with the information necessary to make an appropriate order. This should be done when the application is made and without requiring the court to give directions or make requests. These applications should be presented in such a way that they can be efficiently decided without imposing a substantial additional burden on judicial and HMCTS staff time.[30]The failure to supply the information required by CrimPR 45.4(5) is described as an “oversight” by Ms McMahon. We do not think that this is an adequate description of what occurred. Ms. McMahon explains in other contexts that EMM is a specialist firm conducting private prosecutions with a high level of expertise. This makes this failure very difficult to understand. Modern time recording systems make the Rule 45.4(5) information easy to provide. The bills in cases of this kind represent a substantial source of income for EMM and it is very surprising that this one, to the Court of Appeal, was not competently prepared. We were not told if this is true of all the bills, in all cases. Because it is exhibited to Ms McMahon’s witness statement, the court now has 7 pages of printed spreadsheet called the “Solicitors’ Worklog” comprising 159 lines each itemising a piece of work, giving a summary of the tasks done, the dates when they were done, the time taken, the name of the fee earner and the charging rate applied. A comparison of this with the first presentation of the claim in the Memorandum of Costs shows how grossly inadequate that document was. It says “costs including” reviewing four applications and drafting two Respondent’s Notices and gives the dates of those documents, one in 2023 and five in 2024, and “attendance at hearing”. We had originally read the Memorandum as meaning that the work on those documents was done of the dates given. We therefore pointed out that:- “The Worklog does not include any work done in 2023. It shows that work to a value of £1,324.50 was done on the first date in 2024 identified in the Memorandum, 4April. The second 2024 date, 13 September, has £216 of work recorded. The third, 8 November, £2,609.33, and the fourth, 20 November £473. This means that the dates identified in the Memorandum actually involved work to a value of £4,622.83. That leaves £122,611.17 either for attendance at the one-day hearing or completely unexplained in the Memorandum. In our judgment, this document was prepared in a way which showed an unacceptable attitude to the Rules, to public funds, and to the court.” When we circulated our judgment in draft, the prosecutor explained that the dates given in the Memorandum did not purport to be the dates when the work was done but only identified the documents on which work was done. Since CrimPR 45(5)(b) requires a statement of the dates on which items of work were done, we had wrongly assumed that the dates given were such dates. In fact the work described was done on different dates which are not stated. However, this does not invalidate the real thrust of our finding that the Memorandum was not only not compliant with CrimPR 45(5)(a)-(c) but also a “claim for what appeared to be an excessive sum without any attempt to comply with the Rules”, see [48] below, where we explain further what we mean by this. We had read it as a claim for work done on six days, whereas it is actually a claim for reading four documents and drafting two fairly short Respondent’s Notices. It is clear that additional work beyond simply drafting those documents was done, because they were lodged with bundles and notes from counsel, but none of that is described in the Memorandum. The contrast between this document and the Worklog remains stark.[31]The criminal courts are under great pressure dealing with cases brought by the state. Private prosecutions, which the state has not chosen to bring, are an additional demand on the system and it is of great importance that they are conducted efficiently. Because of the way this bill was prepared this court declined to make an order on the papers and without further consideration. A hearing was convened before a court of three judges which required a day to be set aside and significant reading time. That judicial time could have been spent on other work if the bill had been competently prepared, and the claim properly presented. In such situations prosecutors should be aware that CrimPR Part 45.4(6)(c) will be applied to reject the claim or allow it in a reduced sum. It is now established, and has been for some years, that the following things are relevant to whether to make an order at all, and should therefore be addressed in all costs applications:- i) The steps taken by the prosecutor to engage the police and state prosecutors in bringing the case. ii) The way in which the fees of the solicitors and counsel have been calculated including any tendering process for alternative providers. iii) The information in CrimPR45.4(5).[32]We would add that the facts of this case reveal a further area which should have been dealt with in a properly presented bill in this case. The failure to deal with this in this claim is less culpable. Where previous costs orders have been sought or made in the same proceedings, details should be given of what orders were made, when, and in respect of what work. This may help the prosecutor because their charging rates may have been accepted by previous determining officers. On the other hand it may also suggest that the work which had been remunerated previously would put the solicitors and counsel in an excellent position to deal with an appeal without having to do very much more work on it.[33]If, as in BDI, the court decides that public funds should not pay more for the particular exercise for which costs are claimed than it would have cost if done by public law enforcement and prosecuting agencies, then the bill needs to be broken down. Investigations in such cases are generally done by the police. That part of the solicitors’ work which is actually investigative needs to be identified. In a case prosecuted by the CPS, the lawyers will make charging decisions and deal with disclosure (in partnership with the police). There are many other tasks which they will do, which vary from case to case. Unqualified staff will deal with service of evidence, preparation of bundles and multiple other tasks. Information about what was done and by whom should be supplied so that the court can make appropriate decisions. This consideration underlines the importance of proper compliance with CrimPR 45.4(5) at the outset.

The disclosure failures, both law and fact

(d) The disclosure failures, both law and fact

[34]The misstatement of the law in the passage quoted at [5] above is regrettable. This court was actually aware of the correct position, so no harm was done except that the application was not swiftly dealt with on the papers, as described above. It is a matter of concern that busy Crown Court judges may have been misled in other cases (and perhaps in making earlier orders in this one). This is the kind of thing which will result in a costs penalty to ensure that better practice prevails in the future. Section 17(2A) of the 1985 Act gives the court a wide discretionary power to reflect matters of this kind.[35]The candid acceptance in the application of the court’s comments in the Appeal Judgment about the failure to disclose the intelligence reports is welcome. We do not, however, accept that a disclosure failure of this kind is incapable of justifying a direction under section 17(2A). This material should have been before the trial court when deciding on the available amount. It wasn’t because it was wrongly described as “Clearly Not Disclosable” on the MG6C. It is true that the defence, if they had been more alert, would have asked for it but this material was disclosable because it suggested that unsuccessful (but quite persistent) efforts had been made to find the wealth which it was claimed the appellant could access. That undermined the case on hidden assets which the prosecutor was urging on the judge. The result of that hearing “might or might not” have been different if disclosure had been given.

Two further issues

[1]The failure to attempt to involve the police and state prosecuting authorities in bringing this case[36]It may be that neither the police nor any state prosecutor would have been willing to undertake the investigation and prosecution of this case. Ms McMahon gives compelling evidence to show why this is. However, this does not mean that the decision not even to try to involve them is without consequences when it comes to costs. BDI shows that it may lead to the section 17(1) costs order being limited to the rates which would have been incurred by the state if it had undertaken the prosecution. State prosecutors generally publish the rates which they pay counsel, and these are therefore easy for the determining officer to apply See for example https://www.cps.gov.uk/publication/very-high-cost-cases-terms-appointment-applying-new-instructions-sent-counsel-or-after#32. . There may be greater practical difficulty in assessing the likely cost to the public of the legal work done by the state prosecutor which replicates that done by solicitors in a private prosecution. Similarly, the cost of investigative work when done by the police may not be easily established.[37]The scope of an order under section 17 of the 1985 Act is not limited to legal costs, and may include investigative costs because it covers “expenses properly incurred by [the prosecutor] in the proceedings”.[38]In this case it would appear that the investigation was substantially complete by November 2018 when Treasury Counsel advised that a prosecution could properly be brought, having regard to both parts of the Full Code Test. For our purposes we proceed on the basis that this was the first point when it would have been appropriate to report the matter to the Crown Prosecution Service. We do not mean to lay down any general rule here. This conclusion is limited to this case in which we are actually concerned only with one bill of costs among many and with a late and discrete stage of the proceedings. Difficulties in securing the investigation by the police through Fraud Action, or the Serious Fraud Office, are not relevant as at November 2018, because the investigation had been done. By that stage, the private prosecutor had a financial motive for seeking to pursue the criminal case with privately instructed lawyers because, whether it resulted in a conviction or not, the costs (including those incurred already in investigation) will be recoverable from public funds. This is a substantial advantage over a civil litigant who will only recover a costs order if they become the “successful party”, and who then may never be able to enforce that order and recover any money from the other party. It is also an advantage as against the case where the case is taken over by a state prosecutor. There, the investigative costs (incurred in this situation by the victim who does not become the prosecutor) may be added to a compensation order in the event of conviction, which may be recovered in confiscation proceedings where an order is made under section 13(6) of the Proceeds of Crime Act, but only if the convicted person has the means to pay that sum. In our judgment these substantial benefits should only accrue where it really is true that no state prosecuting authority is willing to conduct the case. This is not only because of the need to manage public funds with care, and to involve the appropriate public bodies in making decisions at a time when they can affect the outcome. It is also because prosecuting cases involves decisions about resources and the public interest which public bodies can take in a disinterested way. Two examples of questions which arose in the Appeal Judgment may be mentioned. We do so not in order to express any findings about them, or any disapproval of what was done, because we have not investigated them. We do so to show that the public interest and that of the private prosecutor may diverge:- i) In paragraph 7 of the Appeal Judgment we said:- “A confidential settlement agreement was reached between Chestone and Benherst (as claimants) and Youssef Taktouk, EG Property Limited and Dr. Wassim Taktouk, the fresh evidence witness. A settlement was also reached with M. Colliac whereby he paid £1,202,433 to Benherst and Chestone and waived a costs ruling in his favour. M. Colliac was initially charged with a conspiracy count but the count was withdrawn. The written settlement agreement (a “Discontinuance Deed” dated 23 September 2019) with him asserted that this was because it was no longer in the public interest to continue to prosecute him, presumably because he had reached this agreement to pay the prosecutor a large sum of money. It is no part of our remit in dealing with this appeal to attempt to interpret or explain that assertion.” ii) At paragraph 30 we say:- “30. The position was, of course, that the prosecutor was financially interested only in the specific criminal conduct, which became the subject of a compensation order in its favour. The proceeds of the assumptions and the consequent finding about the benefit from general criminal conduct would not accrue to the prosecutor but to the public. It is perhaps not surprising that the judge declined to accept the prosecutor’s suggestion when he came to consider his decision. He had never said anything to suggest that the appellant and his legal team did not need to deal with all the sums on the Scott Schedule.”[39]The power of the state to prosecute offenders and to subject them to punishment and the confiscation regime in respect of their proceeds of crime is a significant tool designed to protect and promote the public interest. Where a private prosecutor brings a prosecution without giving the state the opportunity to intervene, should it choose to do so, then it does so at risk as to its ability to recover costs under section 17(1) of the 1985 Act. That is the position established in terms in BDI but already evident in the previous authorities cited in that case. This does not depend on any direct correlation between expenditure on costs orders made under section 17 and the funding available for other cases which may be brought by the state.[40]These conclusions are reinforced in this case, because we are concerned with confiscation proceedings. After conviction, we consider that there would be a further obligation to determine whether the Crown Prosecution Service was willing to conduct the confiscation proceedings. It is common in complex cases for different legal teams to conduct the trial and the confiscation proceedings. In this case, different counsel was instructed for the prosecution by EMM at this stage. That was a natural point at which to consider again whether the case should continue as a private prosecution or whether it should be taken over by the specialist confiscation team employed by the CPS. Similarly, the testing of the market could be done at this stage to secure offers from a range of service providers. We are unconvinced by the Lord Chancellor’s concession that the immature market in 2017 means that this consideration is irrelevant.[41]We do not doubt Ms McMahon’s expertise or the genuineness of her belief that no state prosecutor would have taken up this case. However, an assumption advanced nearly seven years after the start of proceedings and four years after the start of the confiscation proceedings will never carry as much weight as an actual decision by the CPS or SFO on the case being referred to them. 2. Seeking alternative quotes for the prosecuting legal team[42]In much the same way, Ms. McMahon believes on reasonable grounds that the rates which EMM and counsel charge are reasonable and that the level of expertise which they provide is such as to justify their instruction. She may be right, but her evidence assembled in 2025 to show that something which did not happen in 2017/18 would have made no difference is inevitably of less weight than an actual tendering process leading to an informed decision between different available providers.[43]The position here is that summarised by Leggatt J, as he then was, cited in BDI at [43]:- “What is reasonable and proportionate in that context must be judged objectively. The touchstone is not the amount of costs which it was in a party’s best interests to incur but 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. Expenditure over and above this level should be for a party’s own account and not recoverable from the other party.” and approved at [87]:- “Fifthly, the principle stated by Leggatt J which we have quoted at paragraph 43 above, though expressed in the context of an award of costs between parties in civil litigation, is relevant to an application under s17. The decision to instruct particular legal representatives may be a reasonable one from the private prosecutor’s point of view; but the court must make an objective decision, and it will be assisted by knowing what was done to test the market. ”[44]“Beauty parades” have been an established way of recruiting legal teams for many years. There is nothing surprising or controversial in the court’s requirement that those who instruct lawyers and then seek to recover their fees from public funds should show that they took reasonable steps to secure the best deal they could.[45]The relevance of involving the state prosecutor and testing the market when instructing solicitors and counsel was explained in Zinga, see the discussion in BDI at [38]-[41], and nothing in this judgment should take anyone by surprise.[46]We do not know what effect the courts gave to these two issues in making earlier orders in favour of the prosecutor in the total sum of £3,847,285.38.[47]We are content to accept the observation by the prosecutor that the complex way in which governmental budgets operates means that the funds available to state investigators and prosecutors are not directly reduced because orders for costs from central funds are made under section 17 of the Prosecution of Offences Act 1985. We doubt if the court in BDI meant to suggest otherwise at [79] in the passage quoted above. We do not know how these costs orders are funded or out of whose budget. In a broader sense that passage is certainly accurate, in that it is always important to ensure that public money is, as far as possible, wisely spent. At all events, the passage in BDI which is criticised was not essential to the decision in that case and, as we have explained, plays no part at all in our decision.

Decision

[48]It would be open to us to decline to make any costs order under section 17 in this case because of the serious failure in presenting the claim. This would be an application of CrimPR 45.4(6)(c). A witness statement made 4 months later does not remedy the problem. This application has absorbed far more public resource than it should have done because of the claim for what appeared to be an excessive sum without any attempt to comply with the Rules. We say that the claim was apparently excessive because the prosecutors were responding to a fairly short appeal. We are here not making a finding that the claim was in fact excessive, but recording the concerns which led to the court to decline to make the order sought at that stage and to give further directions. The prosecutors instructed leading counsel who had conducted the confiscation hearing before the judge and who was fully aware of all the facts of the case. The bulk of the work preparing for an appeal generally falls on counsel and solicitors acting for the appellant. This is especially so in a fresh evidence appeal, such as this one. Leading counsel charged a substantial sum for pre-hearing work and the total fees charged for solicitors and counsel for work not included in counsel’s brief fee was £178,275. It seemed highly likely that there was duplication in the work done by different lawyers in this case. The appearance of the bill as presented indicated that it could not be endorsed without further enquiry. We decided to facilitate that enquiry rather than simply declining to make an order.[49]Instead, we propose to take a more generous approach because this judgment, and BDI, will, we hope, explain to the profession how the courts will approach these issues. Future non-compliance with CrimPR 45.4(6)(c) may well result in the court simply declining to make any order, and not expending any further public and judicial resources on prosecutors who cannot manage to present a bill of costs properly.[50]We will therefore make an order for the payment out of central funds which requires the determining officer to assess the sum which is reasonably sufficient to compensate the prosecutor for any expenses properly incurred by them in this appeal. We make the following observation for the benefit of the determining officer:- The work of responding to an appeal based on fresh evidence should largely fall on counsel with the support of a paralegal to prepare and lodge bundles, and so on. Particular care is required to scrutinise the items of work for which a claim is made to ensure that they were (objectively) properly incurred.[51]Having determined the reasonably sufficient sum in this way, we find under section 17(2A) of the Prosecution of Offences Act 1985 that it is inappropriate for the prosecution to recover this sum in full, and the payment out of central funds shall be for a lesser sum. The court considers that it is just and reasonable that this lesser sum shall be calculated by reducing the reasonably sufficient sum by 50%. This, for the avoidance of doubt, applies only to the costs which we have been asked to deal with, namely the costs of this appeal.[52]This reduction is made to reflect a combination of matters:- i) The failure to lodge an adequate claim for costs in compliance with CrimPR 45.4(6)(c), and to state the law accurately in it. The claim further failed to deal with the following issues as required by Zinga: a) The failure to communicate with the state prosecuting authorities either at the point when the prosecution was begun in 2018 or at the point when confiscation proceedings were begun following conviction with a view to them conducting the proceedings. b) The failure to test the market at either of the points identified at (a) above to establish the lowest amount which the prosecutor could reasonably have been expected to spend in order to have its case conducted and presented proficiently, having regard to all the relevant circumstances. ii) The failure to disclose the intelligence reports on the appellant’s wealth until the appeal proceedings were in progress. This is a significant factor. iii) The failure to communicate with the state prosecuting authorities either at the point when the prosecution was begun in 2018 or at the point when confiscation proceedings were begun following conviction with a view to them conducting the proceedings. We do not know what the CPS would have said in August 2021 if invited to conduct confiscation proceedings following conviction. We may think it quite likely that they would not have been interested, but this was not tested and so involves a degree of avoidable speculation. Earlier decisions not to involve the CPS have not resulted in any reduction of the costs paid to the prosecutor under previous orders and we are not in a position to review that. iv) The failure to test the market at the point when confiscation proceedings were begun to establish the lowest amount which the prosecutor could reasonably have been expected to spend in order to have its case conducted and presented proficiently, having regard to all the relevant circumstances. We do not take into account any earlier failure to test the market because of the Lord Chancellor’s concession on this issue.[53]We have applied a percentage discount rather than capping the costs at CPS rates because we see some force in the prosecutor’s submission that it may not be possible easily to identify such a rate. It will be impossible in respect of investigative work which the CPS does not do, difficult in the cases of work done by CPS lawyers and paralegals, and rather more straightforward in assessing what counsel would have been paid. In this case, it is relevant that the failure to invite the CPS to take over conduct of the case is only one of the factors which have caused us to make a direction under section 17(2A).