The prosecution powers of local authorities

John Sharland examines a recent Court of Appeal ruling following an attempt by a council to bring a prosecution for legal aid fraud and asks what lessons can be learnt by local authorities.

The case of R v AB and others [2017] EWCA Crim 534 is a useful clarification of the extent of a local authority’s powers to initiate a prosecution and a warning to authorities not to become too ambitious in their search for new sources of revenue.

The facts arose out of an alleged legal aid fraud. The Legal Aid Agency (LAA) had grounds for believing that the defendants had been submitting claims for work which had not been carried out on behalf of clients who did not exist. The total loss was in the region of £6m. The LAA needed help with investigating this and prosecuting if there was evidence on which they could do so.

There was evidence that they approached both the City of London and Metropolitan Police both of whom declined to take the case on although a Detective Sergeant from the Metropolitan Police provided some help and advice.

This sounds like encouraging news for anybody wishing to commit a multimillion pound fraud. If the police lack the resources to investigate complex crimes, then there is little risk of detection. It seems though that the LAA did not make much in the way of serious attempts to ensure that the issue was considered by more senior police officers. Instead they turned to Thurrock Borough Council.

Thurrock have a unit with expertise in computer fraud called the FID. This was set up originally to investigate housing benefit fraud. However, this function is now undertaken by the Department for Work and Pensions (DWP) so Thurrock no longer has the funds to support this service. Someone from the LAA had seen a presentation from the head of the FID and decided to enlist his help in the investigation.

Following this the council agreed to prosecute the identified defendants. The council assured the LAA that it had the power to do this and the LAA did not take any advice of their own as to whether they were right. The defendants did though and their lawyers argued that the council had no power to prosecute.

The council’s arguments were that the power to prosecute derived from s222 of the Local Government Act 1972 which is in the following terms:

Where a local authority consider it expedient for the promotion or protection of the interests of the inhabitants of their area – they may prosecute or defend or appear in any legal proceedings and, in the case of civil proceedings, may institute them in their own name.

This wasn’t a fraud which adversely affected the interests of the inhabitants of Thurrock as opposed to anywhere else. The taxpayers of the country as a whole lose out as a result of legal aid fraud. The council’s answer to this was that the inhabitants of Thurrock also lost out as a result of frauds on the public purse, that they were deriving a benefit from the money that the LAA were paying FID for their work and the increasing skills of the FID employees carrying out the investigation.

These arguments found favour with the judge but not with the Court of Criminal Appeal. The problem with the judge’s reasoning was that he didn’t really distinguish between the power to investigate and the power to prosecute. By the time the case reached the Court of Criminal Appeal, the defendants took no point on the power to investigate. The argument revolved around the power to prosecute.

There was no minute of the decision to prosecute, a fact which was the subject of adverse comment by the court. It was at this point that there should have been a decision about whether to invite the prosecution to be undertaken by the Director of Public Prosecutions (DPP).

The Court of Criminal Appeal categorised the issues they had to consider as being:

• Whether they had power to look behind the council’s decision to prosecute.
• If they could, whether the decision was so unreasonable that they should interfere.
• Whether the council had a common law power to prosecute.

The first question didn’t give them much trouble. There were precedents for saying that the courts could interfere with a decision of this nature. However there was a “high hurdle” to be overcome they would be empowered to do so. Although they don’t explicitly say so, the Court goes on to assume the high hurdle has been jumped.

With the second question they seem to be overcomplicating things. They are referencing here the “Wednesbury” test of irrationality. However, this misses the point. Decisions by public bodies may be impugned on the basis that even though they had a power to make the decision their exercise of the power is irrational. In this case though the real point is whether the authority had the power to initiate the prosecution in the first place. If they did not then it was unlawful. There is no need to go on to consider whether it is also unreasonable.

The court came to the view that although wider public policy considerations could be taken into account in deciding whether to prosecute, for the power under s222 to be exercised, the interests of the inhabitants of the area needed to be engaged over and above their interests as ordinary citizens of the nation.

The court concluded there were no proper grounds for thinking that it was expedient in the interests of the inhabitants of their area that the prosecution should be commenced by the council. They added that the council could not reasonably have thought there were. This was unnecessary. Once having decided that the council lacked the necessary power, their belief was irrelevant. It is moreover difficult to categorise this belief as irrational.

The Court also found that the council did not have any pre-existing common law power to prosecute, pointing out that if this was the position, s222 would be otiose. A good point, up to a point but it wouldn’t be the only otiose provision affecting local government. Under s1 of the Local Government (Contracts) Act 1997 local authorities are empowered to enter into contracts for assets, services or both. A useful power, but local authorities were entering into contracts long before 1997.

The Court’s decision is not relevant to this prosecution, which has now been taken over by the DPP. It does contain some useful lessons though:

Firstly, the case has clarified that there is no common law power to prosecute. If you can’t identify another statutory power, then you have to rely on s222 of the Local Government Act. This means that before starting proceedings you need to think about how this will benefit the inhabitants of the area. If the only reason is that it is in their interests that these types of crime are suppressed, there is no power to prosecute.

Secondly, whenever authorising proceedings there needs to be a note or minute recording this decision.

Thirdly, for prosecutions of very serious crimes which are going to require commitment of considerable resources, there needs to be liaison with the national authorities, the Crown Prosecution Service (CPS) and the DPP who are likely to be best placed to undertake these types of case.

John Sharland is a partner at Sharpe Pritchard. He can be contacted on 020 7405 4600 or This email address is being protected from spambots. You need JavaScript enabled to view it..