Overview
If your charity is the victim of a fraud, trustees, acting in the best interests of the charity, may wish to consider pursuing either criminal and/or civil
recourse. Some insurers make it a condition that the matter is reported to the police before cover will be validated. In Scotland, broadly speaking, there is no duty in law to report a crime to the police. However, in certain circumstances, there may be a duty to report where an indictable offence (which includes fraud) is suspected and it involves two or more people acting together.
Scottish Criminal Justice System
In Scotland, there is one independent prosecutor, the Lord Advocate who heads up the Crown Office and Procurator Fiscal Service (“COPFS”). Whereas in England, various organisations can raise prosecutions, only COPFS can in Scotland. All reports of criminal conduct, including fraud, will be dealt with by COPFS, who determine if a prosecution should be raised. Whilst “on paper” private prosecutions are possible in Scotland, the bar for raising one is extremely high; the last private prosecution which proceeded was over 100 years ago.
Pursuing a Criminal Prosecution
Reporting to police does not guarantee that a criminal investigation will be carried out or it will lead
to a prosecution. It should be remembered, however, that law enforcement agencies have the power to search for materials and to restrain bank accounts/other assets where criminality is suspected. Where the ill-gotten gains have not been dissipated, there is therefore greater cope for recovery.
Timescales for investigating and prosecuting
It is difficult to estimate how long a criminal investigation will take. More complicated cases involving multiple suspects and a string of bank accounts will take longer to investigate than a straightforward one where one accused has transferred all the money into the same bank account. Any police investigation process may require employees of the charity to provide witness statements, the business to provide copies of business documents/access to system. Where it goes to trial, witnesses will be required to come to court to give evidence.
Victims’ Right to Review
Victims have the right to request a review of any decision taken to not raise a prosecution2. Such a review may lead to a reversal of that decision, though there is no guarantee this will be the case.
Court process
A prosecution is raised, the court process will begin with a person appearing in court. This is either done by way of a “complaint” or a “petition”. Whether it is on complaint or by petition will give a good indication of how the case is likely to be prosecuted and potential penalties. It will also influence the timescale.
Summary Procedure (proceedings begin by way of summary complaint)
These cases will be heard by a sheriff sitting alone. If the accused pleads not guilty, a trial date will be fixed normally a few weeks to a few months from the date of that first appearance3. Maximum sentence on summary procedure is 12 months’ imprisonment and/or a fine of up to £10,000.
Solemn procedure (proceedings begin by way of a petition)
These cases will be heard by either a sheriff sitting with a jury or in the high court by a judge, also sitting with a jury. If a person is not in custody, an indictment must be served with a view to a trial starting within 12 months of the first appearance. Although a trial date must, by law, be fixed for no more than 12 months from first appearance, in practice there is no guarantee that the trial will take place on that first trial date given. Maximum sentence for a sheriff and jury case is 5 years’ imprisonment and/or an unlimited fine and for a high court judge with jury, maximum sentence is life imprisonment and/or an unlimited fine.
Compensation
Following a conviction, compensation may be considered as part of the sentencing process. Where there are identifiable victims, priority will be given to compensating those victims over “confiscation” (the process whereby the state seeks to recover any benefit the accused has gained from their
conduct).
The amount of compensation payable will be determined at a post-conviction hearing. It is open to victims of crime to make representations/write to the court about their loss. It is important to note the amount the accused has available to meet any confiscation or compensation order will be considered when an award of compensation is made. An accused cannot be made to pay over more than he/she has (although occasionally this can be revisited if the accused later comes into funds).
Civil Option
An alternative/additional option would be for a charity to raise a civil claim against the fraudster. Civil claims are proved on the lower standard of proof, the balance of probabilities. There may also be scope for civil claims against third parties such as auditors (if they have been negligent and should have identified the fraud), and co-conspirators of the fraudsters.
Depending on the route chosen for raising a civil action, the costs can vary. The route is dictated by the value of any claim. Generally, delictual claims like fraud need to be raised within five years. After that, your ability to raise a claim will be extinguished by a legal process called prescription. This is similar to the process of limitation in English law, where the period is six years. In practical terms, the five-year clock for prescription will start ticking from the point you discover the fraud. This creates a tension between the often lengthy fraud investigations (whether civil or criminal) and the need to act quickly in civil matters. In order to avoid a claim being “time-barred”, proceedings should be raised before the five-year period ends. Proceedings can be ‘sisted’ (known as a ‘stay’ in England), which means that they are suspended until certain conditions are met/ information becomes available.
This often happens when a criminal prosecution arises from the same facts – in that situation, the civil case may be sisted until the criminal matter is concluded. In the event of a successful civil claim, recovery is entirely dependent on the means of the defender. That decree is granted in your favour for £x does not mean that you will necessarily receive £x unless the defender has the means to pay. The same is true of an award of expenses.
| Forum/Procedure | Financial threshold | Cost to raise an action |
| Sheriff Court – Simple Procedure
(Note: As the name suggests, this is a simplified procedure that doesn’t require instructing Solicitors) |
Claims up to £5,000 | To lodge Summons for actions valued at £300 or less – £22
All other actions – £123 |
| Sheriff Court – Summary Cause | Claims up to £5,000. Largely superseded by Simple Procedure for money claims; still used for specific residual categories. | To lodge Summons for actions valued at £300 or less – £22
All other actions – £123 |
| Sheriff Court – Ordinary Cause | Claims over £5,000 and up to £100,000. | To lodge an initial writ – £171 |
| Court of Session – Outer House | Typically claims over £100,000 in damages | To Signet Summons:£157 To Lodge Summons: £373 |
DISCLAIMER
Published 2025. © Fraud Advisory Panel and Charity Commission for
ACKNOWLEDGEMENT
Written by Sally Clark, Of Counsel, CMS England and Wales, 2025. Fraud Advisory Panel and Charity Commission for England and Wales will not be liable for any reliance you place on the information in this material. You should seek independent advice.
