Civil and criminal proceedings: can convictions prove facts in a civil case?

Key points

• A conviction in a UK court can be used as evidence that the convicted party committed the offence, though the convicted party may still seek to prove that it was innocent.
• Convictions from foreign courts are not admissible in English proceedings.
• A statement of facts published as part of a Deferred Prosecution Agreement could be used as hearsay evidence to prove those facts.

As will be familiar to most, the standard of proof in a civil case is the balance of probabilities. A claimant will succeed in its case if it can show that it is more likely than not that the alleged events occurred. Criminal cases are tried to a higher standard of proof, with allegations needing to be proved beyond reasonable doubt, or so that the jury is sure.

Where a company or individual is convicted of a crime such as fraud or bribery, other parties may wish to pursue claims to recover losses they have suffered as a result. A company deprived of a contract by bribery in the tender exercise may seek to recover the profits it would have made, had its bid been successful. Does the higher burden of proof in a criminal trial mean that once a company or individual has been convicted of a crime, the fact of that conviction can be used as conclusive evidence by a party bringing a civil claim based on the same facts?

Previous convictions

The general rule was established in Hollington v F. Hewthorn & Co [1943] KB 587: the findings of courts, tribunals and inquiries are not admissible in subsequent proceedings. The reason for this is that findings of fact by one decision maker cannot bind the decision maker in a subsequent trial, where there may be different evidence.

An exception to this rule was introduced by the Civil Evidence Act 1968, where at section 11 it states that the fact that a person has been convicted of an offence in the UK shall be admissible in evidence for the purpose of proving that he committed that offence, where to do so is relevant to any issue in those proceedings. However, this does not mean that a conviction ends the issue within the civil proceedings. Instead it places the burden on the convicted party to prove that he did not commit the offence. This will obviously be a high bar.

Foreign convictions

The Civil Evidence Act refers specifically to convictions by a court in the UK. In white collar criminal matters it may often be the case that a party has been convicted abroad, but not in the UK. Can a claimant in a civil case use a foreign conviction as evidence to support its claim? The High Court considered this in July 2016, in the unusual case of Daley v Bakiyev. The backdrop to this case was the alleged expropriation of mining rights in the Kyrgyz Republic, but the case itself concerned the shooting of Mr Daley. Mr Bakiyev, the son of the former president, had been convicted in his absence in Kyrgyzstan of arranging the attempt on Mr Daley’s life. Mr Daley sought damages for his suffering in the UK, where Mr Bakiyev had fled following the overthrow of his father’s regime.

The court’s determination of the point was brief. Evidence of foreign convictions, to which the Civil Evidence Act does not apply, is not admissible at all in English proceedings. The rule in Hollington v F. Hewthorn & Co will still apply in these cases. The claimant’s attempt to argue that a foreign court’s finding was analogous to expert evidence, such as reports by the Ministry of Transport Air Accident Investigation Branch, was given short shrift.

Deferred Prosecution Agreements

Another question which arises is the status of findings made in the process of a company entering into a Deferred Prosecution Agreement (DPA). Here, the company has not been convicted, and so the exception in the Civil Evidence Act 1968 does not apply. But the DPA process requires the publication of a detailed statement of facts as to the underlying behaviour, which is signed by both the prosecutor and the defendant company. This is a publically available document and while it is hearsay, in that it is not direct evidence as to the truth of its facts, it could be admitted as evidence in any subsequent civil proceedings via s1 of the Civil Evidence Act 1995.

It should be noted that the head of bribery and corruption at the SFO, Ben Morgan, has stated that to obtain a DPA, disclosure of the facts must be “full and frank”. It is therefore unlikely that the admissions in these statements could be “wordsmithed” to avoid potential civil liability, whilst still meeting the threshold of candour required for a DPA. It is thus expected that DPAs may sometimes be followed by civil actions.

Causation and loss

Obviously establishing wrongdoing by a company will be made a great deal easier where the claimant can rely upon either a conviction or an agreed statement of facts published as part of a DPA. However, claimants will still need to show that they have suffered a loss caused by that wrongdoing. Following the SFO settlement with Innospec Ltd over bribes paid to Iraqi officials, a case was brought by a competitor who alleged that the bribery had deprived it of business. However, in Jalal Bezee v Innospec the court found that Innospec’s products were better suited to the Iraqi market and there was insufficient evidence that the bribery had caused a loss to the claimant company. DPAs may give claimants in “follow-on” civil actions a headstart, but there will still be much to argue over.