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Businessman Wins Right to Bring Private Prosecution Alleging £400,000 Fraud

The right to bring private prosecutions may be rarely exercised but a Court of Appeal ruling has confirmed that it remains very much alive and kicking. The Court opened the way for a businessman who claimed to have been defrauded of £400,000 in a property deal to bring his former associates before a Crown Court jury.

boarded up pubThe businessman had invested the money in a project involving the acquisition and refurbishment of two pubs. He claimed that it was a joint venture and that it had been agreed that he would own 50 per cent of the properties. He asserted, however, that he had lost the entirety of his investment after the associates dishonestly used the pubs as collateral for loans without his consent before transferring ownership of them to another. The associates denied any wrongdoing and argued that the businessman had breached the terms of their agreement and had never had any beneficial interest in the pubs.

After the businessman engaged lawyers to mount a private prosecution of the associates, alleging four counts of fraud, the police declined to investigate. The Crown Prosecution Service also resolved not to take over the case, despite concluding that both the evidential and public interest tests that it applies when deciding whether or not to prosecute had been fulfilled.

In blocking the private prosecution as an abuse of process, a judge noted that the businessman had also launched civil proceedings against the associates with a view to recovering his investment. He concluded that the businessman had an oblique motive in bringing the prosecution as a means of putting pressure on the associates and achieving a favourable settlement of the civil proceedings.

In upholding the businessman’s appeal against that ruling, the Court of Appeal detected flaws in the judge’s reasoning and found that there was no sufficient basis for staying the prosecution. The Court gave directions for the prosecution to proceed before a different judge.