The New Cost of Proving Innocence

Government set to restrict access to Central Funds for acquitted defendants

"The Government believes that public funding should be prioritised on those who cannot afford to pay for their own representation and those who can afford to pay towards the costs of their defence should do so."

In June 2009, the Government published its response ("Response") to its consultation on 'The award of costs from Central Funds in Criminal Cases' 3 ("Consultation Paper"). The Response sets out important plans to reform the way in which an acquitted defendant in criminal proceedings is awarded costs from the public purse. The reforms are likely to have a major impact on those who insure against regulatory risk, not least providers of directors' and officers' ("D&O") liability insurance.

In summary, a successful defendant will only be entitled to claim for costs at legal aid rates. Unlike the present system which permits an acquitted defendant (whether an individual or a company) to claim all of the reasonable defence costs incurred in the proceedings, in future any costs in excess of legal aid rates will have to be borne by the defendant or, as is often the case, the defendant's legal expenses insurer.

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