Virgin Atlantic, Virgin Trains, Virgin Police?

Professor Ed Cape
Tuesday, 4 February 2014

In 2008 Virgin Media Ltd were investigating the sale of television set-top boxes that enabled purchasers to obtain access to premium services without a subscription. Rather than pursue civil proceedings, Virgin decided to conduct a private prosecution of Munaf Zinga and others for the offence of conspiracy to defraud. Lacking investigatory powers, they approached the Metropolitan Police to apply for and execute search warrants. This the police did, although when applying for the search warrants they omitted to tell the magistrates that the investigation and prosecution was being conducted by Virgin and not the police.

Shortly afterwards, Virgin entered into a written agreement with the Metropolitan Police Authority under which they would pay the authority 25% of any money recovered under a compensation order following conviction. Zinga was subsequently convicted, and although Virgin initially sought a compensation order, they subsequently abandoned this in favour of pursuing a confiscation order under the Proceeds of Crime Act 2002 (POCA). The court made a confiscation order in the sum of over £8 million, and under the terms of a so called ‘incentive scheme’ introduced by the Home Office in 2004, the Metropolitan Police would collect more or less the same as under the original agreement with Virgin.

Mr Zinga and a co-defendant appealed against their conviction on the basis that at the time the search warrant was issued, the relationship between Virgin and the Met had been concealed. Despite finding that failure to disclose the true identity of the prosecutor was unacceptable, the Court of Appeal upheld the validity of the warrant. Subsequently, Zinga appealed against the making of the confiscation order, arguing that a private prosecutor was not entitled to bring proceedings for confiscation under POCA, and questioning the propriety of the agreement between Virgin and the Met. He failed on both counts.

At first blush, this may seem something of a technical dispute. However, there are very significant dangers in the police becoming involved in private investigations and prosecutions, which were clearly set out by the Court of Appeal in the earlier case of R v Hounsham [2005] EWCA Crim 1366, where the police had solicited a contribution to investigation costs from potential victims of fraud:

‘[Such an arrangement] may compromise the essential independence and objectivity of the police when carrying out a criminal investigation. It might lead to police officers being selective as to which crimes to investigate and which not to investigate. It might lead to victims persuading a police investigating team to act partially. It might also lead to investigating officers carrying out a more thorough preparation of the evidence in a case of a “paying” victim; or a less careful preparation of the evidence in the case of a non-contributing victim’.

These concerns take on added significance in the context of massive cuts to police funds and resources. As the Lord Chief justice said in the second Zinga appeal:

‘… there is an increase in private prosecutions at a time of retrenchment of state activity in many areas where the state had previously provided sufficient funds to enable state bodies to conduct such prosecutions’.

To be clear, Virgin could, and arguably should, have made a civil claim against Mr. Zinga and his associates. In a different, but similar case involving BSkyB and the Premier League (FAPL), the High Court said that ‘what was in dispute could be viewed in substance and commercial reality as a civil matter between FAPL and/or BskyB and the claimants… [which] should be left to be decided in civil proceedings…’.

However, criminal proceedings have a number of attractions for large commercial organisations. They can use the police to carry out parts of the investigation on their behalf, criminal proceedings are generally quicker than civil proceedings, they do not have to pay civil court fees, they can recover the costs of a successful prosecution, and they can use state agencies to conduct a financial investigation for the purposes of confiscation proceedings.

The Lord Chief Justice said that it was essential that the Home Office, ACPO and the Association of Police and Crime Commissioners give urgent consideration to the issues raised by the case. However, can we trust a government that is keen on privatising prisons and probation, and just about everything else in the criminal justice system, to be worried by the implications of Virgin Police?