City of York Council, R (on the application of) & v AUH & Ors

For paragraph 46(2)(d) of Consumer Rights Act 2015, an offence originates from an investigation into a consumer breach when it is connected with the consumer offending being investigated and is revealed by the facts and matters under investigation. Consequential offending, such as money laundering or violence used to enforce moneylending, may qualify. Unrelated offending does not.

A local authority prosecuting illegal moneylending under the post-transfer statutory scheme does not require DPP consent under section 401(2) of Financial Services and Markets Act 2000. A judge’s invitation to elect between counts, expressly made without an order or final decision, is an indication rather than an appealable ruling. Unauthorised Crown Court litigation breaches the regulatory scheme but does not make proceedings a nullity or, absent bad faith and prejudice, an abuse of process.

These linked appeals arose from preparatory-hearing rulings in prosecutions brought by City of York Council and Birmingham City Council concerning alleged consumer offending, conspiracy to defraud, money laundering and illegal moneylending. The York proceedings also concerned whether an in-house investigations officer could conduct Crown Court litigation and the consequences of doing so without authorisation.

An earlier appeal had held that paragraph 46(1) of the Consumer Rights Act 2015 conferred prosecutorial power irrespective of a local connection: [2022] EWCA Crim 1113. The court considered whether connected fraud and laundering offences were consumer offences, whether DPP consent was required, whether a judge’s indication was appealable, and whether unauthorised Crown Court litigation made the indictment void or abusive.

1. Consumer offences. Applying the whole-statute approach in Hurstwood (A) Properties Ltd v Rossendale Borough Council and another [2021] UKSC 16; [2022] AC 690, the court held that paragraph 46(2)(d) of the Consumer Rights Act 2015 concerns the subject matter of the investigation, not merely its conduct. There must be a connection between the consumer offence under investigation and the further offence revealed. Money laundering connected with consumer offending, and violence or intimidation used to enforce moneylending, may therefore fall within the provision. Unconnected offending does not. York and Birmingham consequently had power to prosecute. The issues under sections 101(1)(b) and 222 of the Local Government Act 1972 did not arise.
2. DPP consent. Section 401(2) of the Financial Services and Markets Act 2000 did not govern Birmingham’s prosecution of illegal moneylending. The power arose under section 107 of the Financial Services Act 2012 and article 9 of the 2013 Order, which enabled local weights and measures authorities to continue prosecuting relevant offences without DPP consent. The court applied the reasoning in R v Rollins [2010] UKSC 39; [2010] 1 WLR 1922.
3. Indication and appeal. Under sections 31(3) and 35(1) of the Criminal Procedure and Investigations Act 1996, an appeal required an actual ruling. HHJ Burn had invited the prosecution to elect between counts but had made no order and had reserved the question of severance. The Court of Appeal therefore had no jurisdiction on that issue.
4. Reserved legal activity. The court had jurisdiction to consider whether York’s in-house officer was an exempt person under paragraph 2(4) of Schedule 3 to the Legal Services Act 2007. Conducting Crown Court litigation was a reserved legal activity. York remained the party to the proceedings; its employee did not become a party or an exempt person. Section 223 of the Local Government Act 1972 authorised conduct in the Magistrates’ Court only and supplied no equivalent Crown Court power.
5. Consequences. Breach of the regulatory scheme did not invalidate the proceedings or indictment. Applying R v Soneji [2006] 1 AC 340 and Ndole Assets Ltd v Designer M&E Services UK Ltd [2018] EWCA Civ 2865, the court held that nullity was not the statutory consequence. The error was not bad faith, had caused no adverse impact, and did not meet the threshold for limb 2 abuse of process. The indictment remained valid and the abuse argument failed.

1. Court of Appeal (Criminal Division): determined the statutory and jurisdictional issues and held that the indictment was valid.
2. Earlier Court of Appeal (Criminal Division): held that paragraph 46(1) of the Consumer Rights Act 2015 conferred power to prosecute irrespective of local connection: [2022] EWCA Crim 1113.
3. Crown Court at Bradford and Crown Court at Snaresbrook: preparatory-hearing rulings were made by HHJ Burn and HHJ Southern respectively.