Frequently Asked Questions

There are many differences, but in short civil fraud is pursued by the victim(s) by way of a private action in the civil courts to seek recovery of the sums/assets which have been taken and/or the payment of compensation/damages to the victim(s). The decision in a civil trial will be made by a Judge.

Criminal fraud is a criminal offence which will be prosecuted by the prosecuting authorities (If the prosecuting authorities are not prepared to bring proceedings, in certain circumstances an individual or an entity can bring a private prosecution in the criminal courts against a defendant (and in respect of other offences)). In the criminal courts (Magistrates’ Court or Crown Court) with the sanctions likely to be a fine and/or imprisonment. The decision in a criminal trial will be made by a jury.

• Proceedings can be commenced and ancillary orders (e.g. freezing orders) can be obtained very quickly, without the uncertainty associated with whether a prosecuting authority will investigate the case.
• The main thrust of civil proceedings is the recovery of, or compensation for, losses suffered by the victim. If successful, you will obtain a judgment against the defendant which can be enforced against the defendant’s assets; this is how you are financially compensated for your loss. In criminal proceedings unless you can overcome the high hurdles to persuade the prosecutor to seek a compensation order (following a conviction) there will be no financial compensation for you.
• You are in complete control of whether to bring civil proceedings and how those proceedings progress. If you report a matter to the police/prosecuting authorities there is no guarantee that the defendant will be investigated or prosecuted and you have no control over the investigation or prosecution, or any publicity in respect of the investigation or prosecution. Apart from giving a statement to the police and possibly evidence at trial, you are unlikely to be involved.
• During the civil proceedings there is the process of “disclosure” which means that the defendant (as well as the victim) must disclose documents which may support your case and may assist in tracing the defendant’s assets.
• In civil proceedings the standard of proof is less – you have to prove your case on “the balance of probabilities”. In criminal matters the prosecution has to prove their case “beyond reasonable doubt”, so before you can expect any form of recovery or retribution the criminal case must be proved to this higher criminal standard.
• A variety of court orders are available to you to assist in preserving the defendant’s assets and obtaining information from the defendant and his/her bank, for example freezing orders, search orders, Banker’s Trust orders.
• It is much quicker to bring, complete and obtain judgment in civil proceedings than it is for the authorities to investigate and prosecute a criminal matter and then, following a conviction, seek a compensation order.
• Civil trials tend to be shorter than criminal trials.
• English civil judgments can be enforced in foreign jurisdictions enabling victims to seize the assets of the defendant even if held outside England and Wales.

• The police/SFO have wider powers of investigation than you or your lawyers, for example, entering homes and business premises to execute search warrants (without notice), accessing bank accounts, telephone records and confidential information not available to the public, as well as interviewing witnesses under compulsion. 
• If convicted, the defendant may receive a custodial sentence and/or a hefty fine.  The fact that the defendant has been sent to prison may go someway to compensating you, even though you may not receive any financial compensation. 
• If there are parallel investigations on-going in different jurisdictions the law enforcement bodies in those jurisdictions may cooperate, for example, by pooling evidence which may make it easier to obtain a conviction. 
• You are not responsible for the costs, whereas in civil proceedings you are responsible for the costs (although if successful you may obtain an order for costs against the defendant). 

You may be confident of successfully defending a claim, but at the same time, you may be seriously concerned that your opponent is not able to pay any legal costs awarded against it. The usual costs award rule in court proceedings is that the unsuccessful party will be ordered to pay most of the successful party's legal costs.

In certain circumstances, a defendant is able to make an application to the court early on in proceedings for an order that the claimant pays money into court as security for the legal costs that he might become liable to pay if he loses the claim. If the court grants this order, the claimant will not be able to proceed with his claim unless he makes a payment into court.

The legal issues surrounding such applications for security for costs are complex, and the court will only normally make such an order if you are able to present evidence to the court to show that your opponent's finances are, or will become, critically fragile. You must also be able to show that you have good prospects of successfully defending the claim. Alternatively, you may be able to show the court that your opponent is a company or individual resident outside England and Wales, or is nothing more than a nominee claimant, or has given unreliable address details with the intention of evading a costs order. If your opponent is resident abroad, you will also need to show that there may be difficulty in enforcing any costs order in that foreign jurisdiction. This is not normally the case where your opponent is resident in another EU member state.

Sometimes, circumstances exist where immediate action is required. For example,  a debtor may be about to flee the country with your money or dissipate assets in some way. It is always recommended to seek legal advice and take immediate action, if appropriate, by making applications to the court for emergency injunctions. These can include the following:

• Search and seizure orders - sometimes defendants are liable to destroy crucial documents and condemning evidence. It may be possible to apply to the court for an order to search their premises and take away and preserve these documents.
• Negative injunctions - these are orders that stop your opponent taking certain damaging action.
• Positive injunctions - these are court orders that positively require your opponent to take certain action.
• Freezing orders - it may be possible to obtain an order to freeze your opponents bank accounts and assets to prevent those assets being dissipated or moved out of the jurisdiction.

Litigation funding, also known as legal financing and third-party litigation funding (TPLF), enables a party to litigate or arbitrate without having to pay for it, whether because they are unable to pay for it or because they do not want to. A third party professional funder can pay some or all of the costs/expenses associated with a dispute in return for a share of the proceeds of the dispute if it is successful. If the litigation is not successful, the funder bears the costs it has agreed to fund.