Financial Services and Markets Appendices to the Minutes of Evidence


Note by HM Treasury on double jeopardy

The Committee has asked for a note on the issue of double jeopardy, and on two issues in particular

  The phrase "double jeopardy" is used to express concern that people should not be tried or punished twice for the same offence. In practice, it is sometimes used loosely, and there is no general legal principle that the same conduct may never result both in criminal action and in civil or regulatory action. For example, if a doctor is tried for manslaughter as a result of his recklessness in treating a patient, this does not prevent action by the General Medical Council to remove him from practice, or civil action by the patient's family. What double jeopardy means is that the courts will sometimes stay one set of proceedings in order to allow another to be resolved first, particularly where the person concerned could not otherwise fairly prepare their defence. It also suggests that enforcement authorities should organise themselves efficiently to avoid imposing unnecessary burdens on those affected by their actions. The creation of a single regulator significantly reduces the exposure of firms to multiple jeopardy from the different constituent organisations of the FSA. The Bill also contains express provision allowing the FSA to limit the scope of concurrent investigations by exchanges or clearing houses, which would also have the effect of reducing exposure to double jeopardy in the loose sense.

I. The basis on which decisions are taken as to whether cases should be civil or criminal and the factors that are taken into account in making this decision

  In cases where the evidence available might support either a civil case or a criminal prosecution, the FSA would initially consider whether criminal proceedings were appropriate. In doing this, it will apply the principles of the Crown Prosecution Service's Code for Crown Prosecutors. This will require the FSA to consider:

    Firstly, whether there is sufficient evidence to provide a realistic prospect of conviction against each defendant on each criminal charge. (Which will mean, in practice, that the FSA must be satisfied that the evidence is such that a jury, properly directed in accordance with the law, is more likely than not to convict the defendant of the charge alleged.)

    Secondly, assuming the above test has been satisfied, the FSA must consider whether, having regard to the seriousness of the offence, and all the circumstances, criminal prosecution is in the public interest.

  If, in the light of these criteria, the FSA decides that it is not appropriate to prosecute, or to refer possible offences to another prosecuting authority—see below—it would consider the possibility of using its civil enforcement powers.

  The FSA has proposed—in its consultation paper CP17 "Financial services regulation: Enforcing the new regime"—to adopt a general policy that cases may be subject to either criminal prosecution or a civil fine, but not to both. However, it may nevertheless be appropriate to pursue other forms of civil or regulatory action in parallel with criminal proceedings. Examples might include an injunction to prevent a continuation of the behaviour concerned, or an order for restitution for the victims. In such circumstances, in deciding whether to take action, the FSA would have regard to the relationship between the civil and criminal proceedings. It would consider, in particular:

    Whether taking civil action might unfairly prejudice the criminal prosecution.

    Whether taking civil action might unfairly prejudice the defendants in the criminal proceedings.

    Whether it is appropriate to take civil action, having regard to the scope of the criminal proceedings and the powers available to criminal courts.

  The FSA, in consultation with other prosecuting agencies, is now working on guidelines on dealing with cases which might be taken down either the criminal or civil route. If guidelines cannot be agreed, then there is a reserve power, in clause 65 of the Bill, for the Treasury, with the consent of the Attorney General and the Secretary of State, to issue guidance.

II. How the overlap between bodies such as the FSA, SFO and the OFT will be avoided

  The FSA, together with other investigative and prosecuting authorities, e.g., the police, the CPS, the SFO, is currently working on draft guidelines covering the investigation of cases which might be of interest to two or more agencies. The intention behind the guidelines is to ensure close liaison and co-operation between these agencies, and avoid any unnecessary duplication of effort. When a case arises which appears to merit further investigation, this should allow for an early decision, in the light of the facts of the case, as to which agency is best placed to take the lead.

  Decisions on who should prosecute will, likewise, depend upon the facts of particular cases. If the FSA has taken the lead in investigation of the conduct concerned, then once it is satisfied that a prosecution is appropriate, it will liaise with other criminal prosecution authorities who have an interest and agree with them which would be the most appropriate body to pursue the prosecution. Similarly, if another agency believes that it has evidence to justify a prosecution for an offence which the FSA also has powers to prosecute, it will consult with the FSA to decide who should take the matter forward.

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