Draft prosecution policy

This draft policy forms part of the enforcement and prosecution policies consultation.

Introduction

1. This policy explains how we will approach the prosecution of workplace pension criminal offences and other types of offences that form part of the same facts or events or are otherwise related to our functions. See tables 1 and 2 in Appendix 1 of this policy.
2. Our regulatory remit extends across the legal jurisdictions of England and Wales, Scotland and Northern Ireland. Where this policy makes reference to legislation and guidance that applies in England and Wales, please read this as also referring to the Scottish and Northern Irish equivalents. You can read more about our approach to the codes that apply to prosecutions in England and Wales, Scotland and Northern Ireland in Appendix 2 of this policy.

Prosecution of criminal offences: general approach

3. Where we prosecute, we will apply our risk-based approach to prosecution decisions and consider each case on its particular facts.
4. Fair and effective prosecution is essential to maintaining law and order and good practice – prosecution punishes wrongdoing, deters repetition and acts as a warning to others. Where appropriate however, a caution or a warning can be considered as alternatives to prosecution – see paragraphs 31-33.
5. We prosecute pensions offences as a private prosecutor where the offences are created under pensions legislation or related to our functions, and we are a designated prosecutor for the offences of avoidance of employer debt in section 58A and conduct risking accrued scheme benefits in section 58B of the Pensions Act 2004. See Appendix 1.
6. When prosecuting we are acting not only in line with our statutory objectives (as set out in section 5 of the Pensions Act 2004), but also in the interests of justice and the public at large. Our objective in prosecuting is not to seek a conviction at all costs – rather, we will approach each stage of the process in a fair, balanced and impartial manner. We will review and, where appropriate, prosecute each case ensuring that the law is properly applied, that all relevant evidence is put before the court, and that we comply with our disclosure obligations.

Who we can prosecute

7. Depending on the circumstances, offences may be committed by individuals, companies or other entities. In some circumstances, the company (or entity) itself may be prosecuted where the commission of an offence is attributable to an individual or group of individuals who can be regarded as the “directing mind and will” of the company for the purposes of the offence. Where an offence has been committed by a company, relevant individuals associated with that company may be prosecuted if they consented to or were involved in the commission of the offence or otherwise caused it to be committed by their neglect.
8. In these circumstances, we will consider whether the interests of justice to prosecute the individual, the entity or both. This will include seeking to maximise the deterrent effect of the prosecution.

Investigation

General

9. We will carry out investigations in accordance with the relevant jurisdictional framework – so, we will act according to the Criminal Procedure and Investigations Act 1996 (CPIA) and the Police and Criminal Evidence Act 1984 (PACE) and their relevant codes of practice for investigations relating to conduct within England and Wales. We will also abide by the Regulation of Investigatory Powers Act 2000, and the Investigatory Powers Act 2016 when gathering information, where relevant.
10. We will pursue all reasonable lines of enquiry, whether these point towards or away from the suspect, and will record and retain all relevant material. We will disclose to the defence material that does not form part of our case and might reasonably be considered capable of undermining our case or assisting the case for the defence.
11. All personal data will be held securely and disposed of in accordance with the Data Protection Act 2018 and the UK General Data Protection Regulation (GDPR). We will conduct investigations in line with the Human Rights Act 1998 and the Equality Act 2010.
12. We will ensure that investigations relating to conduct within the jurisdiction of Scotland or Northern Ireland are carried out in compliance with relevant statutory and other requirements. For example, we will ensure that the relevant provisions of the Criminal Procedure (Scotland) Act 1995 (CPSA), the Criminal Justice and Licensing (Scotland) Act 2010 (CLSA) and the Criminal Justice (Scotland) Act 2016 (CJSA) are applied in relation to investigations applicable to Scotland.

Selecting cases for investigation and prosecution

Our initial approach

13. We can become aware of activity of concern in number of ways, such as a report, a whistleblowing or member complaint, information gained through our intelligence function or through some other TPR engagement or reports in the press or other public media.
14. We will generally carry out an assessment to identify which powers may be available to us, based on the facts of the individual case, and whether opening a criminal investigation will be appropriate.
15. If we conclude that we may be able to use our prosecution powers in a particular case, our decision to investigate will be risk-based and take into account all relevant factors. These may include the impact of the alleged offending on members, the funding level of a scheme, whether the report or information highlights any particular concerning features or behaviour, as well as consideration of our available resources. We might also decide that another regulator or law enforcement agency would be better placed to investigate or lead on a joint investigation, based on their remit.

Starting an investigation

16. If we decide to open an investigation, we typically do not start with a pre-determined action such as prosecution in mind, but assess any initial reports or material we obtain, gather further information and establish the facts. In most instances, this will start with the use of our regulatory information-gathering powers, such as information notices issued under section 72 of the Pensions Act 2004.
17. We will assess the powers and other regulatory tools available to us once we’ve gathered enough information to allow us to consider how to proceed, pursuing our statutory objectives in a risk-based and proportionate manner.
18. The presence of one or more of the following factors (which are not exhaustive) may indicate that we are more likely to focus our investigation on the potential use of our criminal powers:
    • non-compliance with our guidance, direction or the use of our civil powers
    • serious loss or harm to a scheme and/or members as a result of the conduct
    • extensive involvement or influence in the loss or harm
    • significant financial gain made to the detriment of the scheme and/or members
    • some other unfairness in the treatment of the scheme
    • evidence of deliberate or sophisticated offending, sustained over a lengthy period
    • risk to public confidence in pension schemes and pension saving
    • the trustees, TPR and/or the Pension Protection Fund (PPF) have been misled or not appropriately informed, (or where we are engaged in the matter, there has been a lack of openness and timeliness of communication)

How we will approach and communicate with subjects of our criminal investigations

19. When we decide to investigate criminal offences, we will typically engage with potential suspects and give them the opportunity to put forward their side of the story before deciding to prosecute.
20. We will consider any explanation given to us for a person’s actions. We would usually expect a person's actions and the reasons for them to be well documented and evidenced. We will generally give more weight to evidence given to us at the time the suspect’s initial explanation is provided, rather than later on in our investigation.
21. Where there are grounds to suspect that a criminal offence may have been committed and the person’s answers may be used as evidence in a prosecution, any discussion will be conducted in the form of a PACE interview under caution.
22. When an investigation is considering a possible criminal offence from the outset, we will make this clear to suspects when we engage with them.
23. If, during the course of a regulatory investigation, we later become aware that there may be grounds to investigate the person as a suspect in connection with a possible offence, we will inform the person concerned before we conduct a PACE interview with them.
24. If we interview a person as a suspect but later decide not to proceed with a prosecution, we will inform them. We will also let them know that we reserve the right to review our position if there is reason to revisit the decision and/or further evidence comes to light that affects our view of the evidence and the prospects of prosecution.
25. If any information has previously been obtained using our regulatory information-gathering powers, we will only use evidence that is admissible in criminal proceedings, see section 310 of Pensions Act 2004.

Choosing whether to prosecute

26. Where we prosecute, we will select cases for prosecution in light of the following.
    1. Any applicable code, guidance and/or our policy approach, where relevant, to the subject matter or the offence in question (eg our criminal offences policy on s58A and s58B of the Pensions Act 2004).
    2. Our statutory objectives and the outcomes that might be achieved from enforcement action based on the options available to us.
    3. Whether prosecution could deter future acts of the kind and signal to others within the regulatory community that this behaviour will not be tolerated.
    4. Whether the matter satisfies the applicable test(s) for prosecutors. This requires an assessment of the evidence and for us to be satisfied that a conviction is likely on the criminal standard of proof (the ‘evidential test’), and that pursuit of conviction is in the public interest (the ‘public interest test’).
27. This represents a high threshold, so criminal proceedings are reserved for only the most serious types of conduct or behaviour.
28. We cannot prosecute offences within the jurisdiction of Scotland, but we can investigate them and we are a designated specialist reporting agency to the Crown Office and Procurator Fiscal Service (COPFS). The decision to prosecute is one for COPFS. We will liaise closely with them to ensure that they are provided with all relevant evidence and material and they will make their decision whether to proceed.

Victims of crime

29. The position of victims of crime is covered in the Code of Practice for Victims of Crime in England and Wales and we will follow the standards in the code where it applies. There is also a Victims’ Code for Scotland and a Victims’ Charter in Northern Ireland, and we will follow the standards in those codes where they apply. You can find further details on our approach to victims of crime.

Regulatory action

30. In cases where criminal proceedings have started or are about to start, it may also be appropriate for us to use our regulatory powers. Our approach to this falls outside the scope of this policy, and you can find more information about our approach to our regulatory cases and our approach where we have a choice between use of regulatory and criminal powers in our scheme management enforcement policy and automatic enrolment compliance and enforcement policy.

Cautions

31. Where we have the power to prosecute, we may exceptionally consider seeking a caution, or warning as an alternative, if specific criteria are met, and the case is one we could take to court if the caution or warning were refused.
    • Cautions in England and Wales are usually aimed at less serious breaches of the law and provide an additional measure for us to use in those cases where the deterrent effect is considered a sufficient and suitable alternative to prosecution.
    • Cautions in Northern Ireland are usually aimed at less serious offending and provide an additional measure for us to use to where the case could be dealt with quickly and easily as a sufficient and suitable alternative to prosecution.
    • Warnings in Scotland are usually aimed at minor offences and provide an additional measure for us to use in those cases where they are considered a timely, justifiable and proportionate alternative to prosecution.
32. For a caution or warning to be considered, we would have to be satisfied that there was a realistic prospect of conviction were the person prosecuted and that the person has made an appropriate admission.
33. The ultimate decision whether to issue a caution or warning is for the police to take as they would be the authority that would administer it.

Proceeds of crime

34. We aim to prevent offenders from benefiting financially from their criminal activity. Where a defendant has obtained a benefit from their criminal conduct and has the means to pay a confiscation order, we may work with other agencies to ensure that criminal assets are restrained during an investigation and prosecution, and confiscated in the event of a conviction, using powers under the Proceeds of Crime Act 2002. We will invite the court to impose a confiscation order to punish convicted offenders, deter the commission of further offences and reduce the profits available to fund further enterprises.
35. Where applicable, we may invite the court to consider whether the defendant has a criminal lifestyle and benefited from general criminal conduct and, if so, to make assumptions regarding the defendant’s property, and make a confiscation order accordingly.
36. Where appropriate, we may ask the court to make an order to compensate the victims of the crime when the confiscation sum is paid, or through a separate compensation order.
37. We will assist the court in any enforcement action it takes to ensure that the confiscation order is complied with.

Other agencies

38. We will liaise and co-operate in cases where another regulatory or law enforcement authority has an interest in prosecuting any aspect of a matter that we are considering for investigation, investigating or considering for prosecution.
39. Where the subject of one of our investigations is also of interest to another agency, we will usually liaise with them before deciding whether an investigation or any prosecution should be carried out by us, the other agency, or whether a joint investigation is appropriate.
40. In circumstances where we uncover evidence of criminality that is not connected to our functions, we will pass this to the appropriate law enforcement agency, who will then determine whether to take the matter forward.

Appendix 1: Criminal offences

Table 1: Criminal offences under workplace pensions legislation

Offence	Legislation (England, Wales and Scotland)	Legislation (Northern Ireland)	Subject
Failing to comply with automatic enrolment duties	s45(1) Pensions Act 2008	s45(1) Pensions (No.2) Act (Northern Ireland) 2008	Automatic enrolment
Failing to comply with a contribution notice	s42A PA04	Art38A Pensions (Northern Ireland) Order 2005	Scheme regulation – avoidance
Avoidance of employer debt	s58A PA04	Art54A Pensions (Northern Ireland) Order 2005	Scheme regulation – avoidance
Conduct risking accrued scheme benefits	s58B PA04	Art54B Pensions (Northern Ireland) Order 2005	Scheme regulation – avoidance
Neglecting or refusing to provide information or produce document required in information notice	s77(1) Pensions Act 2004 (PA04)	Art72(1) Pensions (Northern Ireland) Order 2005 (PNIO05)	Automatic enrolment or scheme regulation
Delaying or obstructing inspector	s77(2)(a) PA04	Art72(2)(a) PNIO05	Automatic enrolment or scheme regulation
Neglecting or refusing to produce document required in inspection	s77(2)(b) PA04	Art72(2)(b) PNIO05	Automatic enrolment or scheme regulation
Neglecting or refusing to answer question or provide information	s77(2)(c) PA04	Art72(2)(c) PNIO05	Automatic enrolment or scheme regulation
Altering, suppressing, concealing or destroying document required in information notice or inspection	s77(5) PA04	Art72(5) PNIO05	Automatic enrolment or scheme regulation
Providing false or misleading information	s80(1) PA04	Art75(1) PNIO05	Automatic enrolment or scheme regulation
Disclosing restricted information	s82(5) PA04	Art77(5) PNIO05	Automatic enrolment or scheme regulation
Acting as trustee while prohibited or suspended	s6(1) Pensions Act 1995 (PA95)	Art6(1) Pensions (Northern Ireland) Order 1995 (PNIO95)	Scheme regulation
Acting as auditor or actuary of trust scheme while ineligible	s28(1) PA95	Art28(1) PNIO95	Scheme regulation
Acting as trustee while disqualified	s30(3) PA95	Art30(3) PNIO95	Scheme regulation
Exceeding permitted level of employer-related investment	s40(5) PA95	Art40(5) PNIO95	Scheme regulation
Fraudulent evasion of duty to pass on employee contributions	s49(11) PA95	Art49(11) PNIO95	Automatic enrolment or scheme regulation
Fraudulent evasion of direct payment arrangements	s111A(12) Pension Schemes Act 1993	s107A(12) Pension Schemes (Northern Ireland) Act 1993	Automatic enrolment or scheme regulation

Table 2: Other potential criminal offences

Please note this is not an exhaustive list.

Offence	Legislation (England, Wales and Scotland)	Legislation (Northern Ireland)	Subject
Fraud by abuse of position	s4 Fraud Act 2006 (England, Wales and NI)	s4 Fraud Act 2006	Scheme regulation
Fraud by false representation	s2 Fraud Act 2006 (England, Wales, and NI)	S2 Fraud Act 2006	Scheme regulation
Fraud	Common law (Scotland only)	No comparative legislation	Scheme regulation
Conspiracy to defraud	Common law	Common law	Scheme regulation
Money laundering	s327, 328, 329 Proceeds of Crime Act 2002	s327, 328, 329 Proceeds of Crime Act 2002	Scheme regulation

Appendix 2: Prosecution codes

Prosecutions in England and Wales

1. When we decide whether to bring criminal proceedings in England and Wales, or to refer the matter to another prosecuting authority (see paragraph 28), we will consider and apply the Code for Crown Prosecutors which sets out the general principles crown prosecutors should follow when they make the decision concerning cases.
2. The code contains a two-stage test to be applied when deciding whether to prosecute.

The evidential stage

3. We must be satisfied that there is sufficient evidence to provide a realistic prospect of conviction against each suspect on each charge. We will consider what the defence case may be, and how it is likely to affect the prospects of a conviction. We will also consider whether the evidence can be used in court and whether it is reliable and credible. A case that does not pass the evidential stage must not proceed no matter how serious or sensitive it may be.

The public interest stage

4. In every case where there is sufficient evidence to justify a prosecution, we will go on to consider whether a prosecution is required in the public interest.
5. It has never been the rule that a prosecution will automatically take place once the evidential stage is met. A prosecution will usually take place unless we are satisfied that there are public interest factors tending against prosecution which outweigh those tending in favour.
6. When deciding the public interest, we will consider various questions set out in the code to identify and determine the relevant public interest factors for and against prosecution. These factors should enable us to form an overall assessment of the public interest. The code contains explanatory text providing guidance to prosecutors when addressing each particular question and determining whether it identifies public interest factors for or against prosecution.
7. In addition, we will consider aggravating or mitigating factors specific to the regulatory offences under consideration.

Prosecutions in Scotland

8. We are a designated specialist reporting agency and will liaise with The Crown Office and Procurator Fiscal Service (COPFS) for offences that take place in Scotland.
9. The decision whether or not to prosecute is one for the COPFS. Before proceeding with a case, they must be satisfied by way of corroborated evidence that:
   • the case is within the jurisdiction of the court
   • an offence has been committed
   • the alleged offender committed that offence and is therefore liable to prosecution
   • there is sufficient evidence to prove beyond reasonable doubt both that the offence was committed, and by whom
10. The criteria that the COPFS will consider are explained in the Crown Office and Procurator Fiscal Service Prosecution Code. This also sets out the range of options available to prosecutors dealing with reports of crime.

Prosecutions in Northern Ireland

11. We will liaise with the Public Prosecution Service (PPS) for offences that take place in Northern Ireland.
12. In deciding what action to take, we will consider and apply the basic principles set out in Chapter 4 of the PPS Code for Prosecutors. These accord broadly with the principles in the Code for Crown Prosecutors, in that they require consideration of an evidential and public interest test.

Back to top

Is this page useful?