Law firms could be incentivised to pursue civil prosecutions against suspected fraudsters including cyber-criminals under proposals currently being considered by the City of London Police.
Under the initiative, which is currently in a pilot stage, law enforcement authorities would work with the private sector to identify, seize and recover assets from criminals using existing civil law.
Civil recovery would mean assets can be identified and seized more quickly, “taking them out of the hands of criminals and back into the hands of the victims,” according to the City of London Police (CLP).
The scheme is designed as a two-year test and would be headed up by officers from the CLP's economic crime directorate. CLP is the national lead on Economic Crime and under this remit is host to Action Fraud (the national fraud and cyber-crime reporting service), the National Fraud Intelligence Bureau, the Insurance Fraud Enforcement Department and the Police Intellectual Property Crime Unit.
Civil recovery would take place in parallel with any criminal investigations that might be conducted by the police. Asset recovery would apply only to selected cases and would be used in addition to the recovery of assets under the Proceeds of Crime Act (POCA).
According to a CLP spokesperson, it is not always possible for the police to bring a case to a level where it would be possible to restrain assets under POCA. Civil recovery has a lower standard of proof which officers hope will speed up the process and enable them to seize assets before suspects are able to hide them.
A working group consisting of representatives from the National Crime Agency, Metropolitan Police Service, solicitors and private investigation firms is reviewing the scheme. A spokesperson told SCMagazineUK.com that the working group is still considering the practicalities of the scheme and no live cases have yet been assigned.
Conor Ward, a consultant at Hogan Lovells International LLP, told SC that he thinks the idea is interesting, particularly in relation to the bigger cyber-criminals.
“Law enforcement and the banks have not had great success in recovering say from phishing frauds whilst law firms have had some successes in asset tracing across borders: eg, a case we did for BTA Bank from Kazakhstan in tracing assets allegedly stolen by the bank's former chairman,” he said.
“Whether it is worthwhile or not for the victims will depend on what assets there are. In many cases, I suspect that there will be insufficient funds to seize, in particular [after] the investigators and lawyers have taken their share to cover costs,” he said.
“That said, it is better that some attempt is made to bring miscreants to account and if using the civil courts turns out to be effective, then why not? The downside is that the individual fraudsters will merely lose money which may not be seen as a major disincentive to turn to crime – ie, the worst that can happen is you are asked to pay the money back (or what's left of it)!”
However, some criminal lawyers are uneasy about the proposals. Katie Wheatley, joint head of criminal law at Bindmans based in London, told the Guardian the proposals would give police “what they would regard as an easy deterrent, without having the inconvenience of proving an offence to a criminal standard”.
Would it be right to use evidence that wouldn't stand up in a criminal court to strip a person of their assets – a potentially life-changing event?
However, there is a feeling that something must be done – police simply do not have the resources to investigate and pursue all the cases of cyber-crime that come to them.