Virgin Media Ltd, R (On the Application Of) v Zinga

Under section 17 of the Prosecution of Offences Act 1985, a private prosecutor may recover from central funds only costs that reasonably compensate for expenses properly incurred. The court must ask whether it was proper and reasonable to instruct the lawyers concerned and whether the costs charged were reasonable.

Reasonableness must be assessed in the relevant legal-services market and by reference to the particular proceedings. In a criminal appeal on legal issues, solicitors will rarely need to prepare legal argument or attend hearings, and one suitably experienced advocate will ordinarily suffice unless special circumstances justify more. Recoverable counsel fees should reflect an appropriate brief fee and reasonable preparation, rather than an hourly charge for unnecessary work.

Virgin Media Ltd, acting as a private prosecutor, had secured the conviction of Munaf Ahmed Zinga and others for conspiracy to defraud. It had obtained substantial central-funds costs for the trial and the earlier conviction appeal.

Following a confiscation order, Zinga's appeal against that order was dismissed by the Court of Appeal: [2014] EWCA Crim 52. At the end of that appeal, Virgin applied for its costs of responding to it under section 17 of the Prosecution of Offences Act 1985. It claimed £93,070.46.

The issue was which costs of the solicitors and two counsel were reasonably recoverable from central funds for a criminal appeal concerned with confiscation law.

1. The costs application was granted only to a substantially restricted extent. The court directed the Registrar of Criminal Appeals to determine the reasonable amount of the limited solicitor work that could properly be recovered.

2. Section 17 of the Prosecution of Offences Act 1985 required reasonable compensation for expenses properly incurred. The court adopted the two-stage approach stated in R v Dudley Magistrates Court ex p Power City Stores [1990] NLJR 360: it must be proper and reasonable to instruct the lawyers used, and their charges must themselves be reasonable. The materially identical earlier wording in section 16(6), and the reasoning in R (Law Society) v Lord Chancellor [2010] EWHC 1406 (Admin), supported that construction.

3. For future significant private prosecutions, the reasonableness of instructing particular lawyers would normally require examination and testing of the relevant market, including tenders or quotations. This issue did not arise here because it was reasonable, on an appeal, to retain the team that had acted below.

4. The claimed solicitor costs were nevertheless unreasonable. In a Criminal Division appeal on issues of law, absent special circumstances, counsel should prepare and present the legal argument, liaise with the court and arrange filing. The solicitors' preparation of legal argument and attendance at hearings were therefore irrecoverable. Only formal instructions, necessary communications and attendances on Virgin could be allowed, at the specified guideline-based rates.

5. One competent advocate could reasonably have prepared and presented Virgin's response. Two counsel were not justified merely because the appellant had leading and junior counsel. The recoverable preparation was limited to the reasonable time of one advocate, with specified brief fees for the two hearings and a reasonable hourly rate for subsequent documents.

The court also observed that effective prosecution of intellectual-property crime serves the public interest, but that a properly resourced CPS should be able to undertake such cases at materially lower cost to public funds than private prosecutors.

This was a costs application arising after appellate proceedings, rather than an appeal from a costs order.

• Court of Appeal (Criminal Division): Having dismissed Zinga's confiscation appeal in [2014] EWCA Crim 52, the court restricted Virgin's recoverable costs and directed assessment of the permissible solicitor costs.
• Court of Appeal (Criminal Division): Zinga's earlier appeal against conviction was dismissed in [2012] EWCA Crim 2357.
• Crown Court at Snaresbrook: Zinga and two others were convicted of conspiracy to defraud. A confiscation order was later made against Zinga.