The document discusses private criminal prosecutions for dilapidations cases involving fraud. It notes that private prosecutions are allowed by statute and proceed like public prosecutions. They may be appropriate in cases of serious wrongdoing supported by evidence that proves criminality beyond reasonable doubt. Examples given include fraudulent misrepresentation to gain an advantage. Evidence gathering focuses on following money trails and obtaining documents, witness statements, and other circumstantial evidence. Care must be taken to ensure investigative and legal strategies are aligned, and that a private prosecution is truly warranted and not being pursued for tactical reasons alone.

1. PRIVATE CRIMINAL PROSECUTIONS
IN DILAPIDATIONS
KATE MCMAHON
IAN CASEWELL
DENNIS KAVANAGH

2. • The right for a private individual / charity / company to enforce
criminal law in this jurisdiction is preserved by statute – section 6(1)
of The Prosecution of Offences Act 1985
• Once initiated proceeds in precisely the same way as a public
prosecution, no different rules for private prosecutors
• Increasingly common in era of austerity for a private prosecution to
be considered, particularly instances of complex fraud where the
police or CPS will not action the case
• Advantages: generally quicker than public agency prosecutions,
Proceeds of Crime Act 2002 confiscation regime allows for simple
and quick compensation for wronged party, separate costs system
where private prosecutor can claim court costs back from public
funds
WHAT IS A PRIVATE PROSECUTION?

3. WHEN MIGHT A PRIVATE PROSECUTION BE
APPROPRIATE?
• Only in exceptional cases of serious wrongdoing where criminality is evidenced
and can be proved to the criminal standard (beyond reasonable doubt)
• Important in a dilapidations context to draw a distinction between cases where a
schedule of dilapidations / quantified demand / Scott Schedule entry is ambitious
or an arguable “try on” and when that tips into fraud.
• The dilapidations protocol itself is based on the idea that the Landlord and
Tennant will have different positions on the proper final figure, the mere fact of
deferring views per se is not necessarily criminal conduct
• Private Prosecution is not a substitute for mediation or ADR, nor would the court
be likely to regard tactical or precipitous deployment as proper, it will only be
necessary in exceptional cases, perhaps most straightforward example would be a
case with serious adverse comment from Court / RICS
• Likely to be particularly useful to combat systemic fraudulent schemes, Accident
Exchange v Broom & Others [2017] EWGC (Admin) 1530 following High Court
committal for contempt

4. WHAT OFFENCES MIGHT ARISE IN DILAPIDATIONS?
• Statutory Fraud (Fraud Act 2006) – Offence of fraud by misrepresentation
requires a dishonest misrepresentation by a person who thereby intends to
make a gain / expose another to loss
• Perverting the Course of Public Justice – An act tending to and intended to
pervert the course of justice
• Perjury – An untruth on oath evidenced from two sources independent of
each other
• Proceeds of Crime Act 2002 Offences – Possession / conversion / transfer
etc. of “criminal property”

5. WHAT EVIDENCE MIGHT BE GATHERED AND HOW IN A CASE
INVOLVING A FRAUDULENT CLAIM?
• Important to ensure investigative strategy is aligned with legal strategy
• Our role is often to uncover hidden relationships among businesses and
people, and “follow the money”
• Evidence gathering cycle: Collect – Analyse – Interview
• Direct and circumstantial evidence
• Primary types of evidence:
• Witness statements
• Documents and data
• Demonstrative evidence: photos, charts, graphs etc.
• Identifying disclosure targets, such as email accounts, telephone records,
banks…

6. COMPARISON TO OTHER AREAS INVOLVING
UNRELIABLE EXPERTS
• Though very small in number, expert witnesses have fallen foul of the court in many different jurisdictions,
examples include:
• In family law – Re F (a minor) [2016] EWHC 2149 (Fam)- Care proceedings, mother taped conversation with well
respected Consultant Clinical Psychologist proving the content of his report did not accord with the evidence. Serious
public rebuke for expert, new report from independent expert ordered.
• In criminal law – Regina v Stephen H [2014] EWCA Crim 1555- Allegations of serious sexual violence and abuse, defence
refused permission to rely on expert evidence of campaigning doctor who opined on “false/recovered memory
syndrome” based only on the papers in the case. Court of Appeal (Criminal) not pleased to see this doctor involved in
criminal proceedings for a third time despite attracting similar sanction in the past
• Personal Injury Claims – Accident Exchange litigation – Wholesale scheme of providing false and misleading evidence
designed to minimise liability for insurers, key figures committed for contempt and indemnity costs, also see cases
regarding whiplash and staged accidents some of which have grounded public and private prosecutions
• Property valuations – R v Rathie-(Considered in more detail further on) £900,000 cash bribes paid to chartered surveyor
to facilitate £10 million mortgage fraud, (agreed paper hearing and sanction of immediate expulsion at RICS following
the trial)
• Many other controversial areas from computer experts across jurisdictions to commercial valuations in novel areas
(LIBOR trial / Excalibur litigation)

7. CASE ANALYSIS – MARY-JANE RATHIE AND MARIA
MICHEALA
• Maria Micheala, 33 when she was jailed, accomplished conwoman thought to operate using more than a
dozen different identities approached surveyor Mary-Jane Rathie posing as a diamond heiress in dispute with
her family, sought inflated valuations of expensive properties in Chelsea and Belgravia for the purpose of
securing loans against them
• Clear criminal scheme emerged at trial with inflated valuations (some doubled), bribes paid by Micheala to
Rathie included £910,000 cash and a Bentley Continental and a Range Rover sports vehicle
• Rathie convicted for fraud and jailed for 6 years in July 2011, evidence at trial from members of her firm
including risk officer and partners who conducted review of files, Prosecution relied on their expert evidence
to prove beyond a reasonable doubt that the claims were inflated and connected to bribes
• Micheala left the country following the frauds but returned and was sentenced to 9 years imprisonment
(amounting to eight fraudulent deals worth £13 million)
• Clear evidence of (i) bribes, (ii) personal connection, (iii) scheme of offending by both parties and (iv)
valuations way above the normal variations one might expect satisfied the high standard of proof in crime
• Cases occurred in the context of an estimated cost of £3 Billion a year to the UK in property fraud, (mortgage
lenders don’t release their actual figures)

8. SECURING EVIDENCE OF CORRUPTION
• Determining the form of the bribe: money, gifts, favour, advantage can be challenging. Let’s consider that for
our purpose the bribe is in the traditional form of money
• The bribe may be nuanced in a retainer
or inflated fees
• Such schemes are setup with the
prospect of evading identification.
However at each junction of the
process there are evidence gathering
opportunities
• Each step can contain seeds of
their own destruction
• Get on the paper trail and speak with
people
• Identifying whistleblowers and
timing of interviews are important
considerations

9. INVESTIGATING FRAUDULENT VALUATIONS
• Fact checking: what elements of the valuation appear inflated, what is being alleged? Build a picture around
specifics.
• Identify patterns of behaviour
• Are there other instances where a valuation work has been questioned? Past regulatory sanctions, litigation etc.
• Any instances of dishonest behaviour
• What’s the relationship between the expert and the parties?
• Challenge expertise. What professional qualifications and practical experience does the said expert possess?
• Seek input from other experts to test expert’s valuations
• Challenge independence and demonstrate conflicts
• Case study:
• Property valuation team’s close relationship with a client led to inflated valuation
• Senior member of team was on a commission of the sale of the property
• Team had scattered to other employers
• Located and interviewed formers

10. CRIMINAL CONDUCT OR A FAILURE TO EXERCISE REASONABLE
CARE AND SKILL: A QUESTION OF DEGREE AND CONTEXT?
• 3 cases which could be considered for investigation and criminal prosecutions:
• Gordon & O’Kane: RICS Disciplinary Panel Hearing, 2017 10 30, Overvaluation of property at £4.5 and
subsequently £5 million, true value much closer to 3 / 3.5 Million, case subject of press attention and adverse
comment by High Court of Northern Ireland, charges framed on the basis of a failure to carry out
professional work with due skill, care and diligence with proper regard to technical standards contrary to Rule
4 of the Rules of Conduct for Members. Valuation for purposes of a loan and aggravated by fact second
valuation given in context of falling property market in 2009.
• Norfolk Square (Northern Section) Ltd. v M & P Enterprises (London) Ltd: (First instance) 8.2.2017,
quality of expert report (state of repair of property):
• HHJ Baucher: “An expert's obligation to the court is clear: see the decision of Cresswell J in The Ikarian Reefer [1993] 2 LI
rep 68, as summarised in note 35.3.3 of vol.1 of the White Book). In my judgment, Mr. Grove has failed to give objective
and independent evidence to the court on a number of important matters. I direct that the defendant's solicitor should
send him a copy of this part of the judgment. “
• Fitzroy House Epworth Street (No. 1) Ltd & Another v The Financial Times Ltd (2005): Only 10% of the
total value of Fitzory’s claim found to be justified at first instance with HHJ Thornton QC saying of the
Claimant surveyor: “He attempted to find all blemishes, defects, however small or insignificant or potential
defects which might emerge in the future. I formed the impression … he had, as he saw it, ascertained on site
that he saw his role as seeking to identify as many defects as possible”

11. QUESTIONS
• When would be the right time to consider a private prosecution against a party who lies in a witness
statement, particulars or expert report?
• Can criminal and civil proceedings run in parallel?
• Is litigation funding available?
• When, if at all, would it be appropriate to write to a person suspected of having committed a criminal
offence?
• Could it happen to you?
• Any other questions.