In criminal law cases, the issue of who bears the cost of legal proceedings is a vital one, particularly when it comes to defendants who are acquitted or have their cases discontinued. In cases where defendants are entitled to recover their legal defence costs, this may be done via Central Funds. Central Funds are a government fund designed to reimburse costs incurred during criminal proceedings in certain circumstances.

The Criminal Procedure Rules 2020 (as amended) govern the practice and procedure in criminal courts in England and Wales, including the recovery of Central Funds costs. 

If you wish to recover Central Funds costs, contact ARC Costs today for assistance.

What are Central Funds?

Central Funds refer to government-allocated funds managed by the Ministry of Justice (MoJ) to cover costs incurred by individuals involved in criminal proceedings. These funds serve a dual purpose:

• To reimburse acquitted defendants for their reasonable legal expenses.
• To pay witness expenses and interpreter fees when summoned or appointed by the court.

The main principle is to ensure that innocent individuals are not left out of pocket for defending themselves against criminal allegations, especially when legal aid is unavailable or refused.

The primary legislation governing cost recovery in criminal cases includes:

• Prosecution of Offences Act 1985 (POA 1985) – especially Sections 16 to 21, which outline when and how costs may be awarded out of Central Funds.
• Criminal Defence Service Act 2006
• Costs in Criminal Cases (General) Regulations 1986 – as amended, these regulations detail the process for claiming and assessing costs.
• Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012) – especially relevant due to the introduction of key reforms affecting the right to recover legal costs for privately paying defendants.

Who Can Claim Central Funds Costs?

Under Section 45.4 (10) of the Criminal Procedure Rules,

“An order for the payment of costs out of central funds can be made—

(a)for a defendant—

(i)on acquittal,

(ii)where a prosecution does not proceed,

(iii)where the Crown Court allows any part of a defendant’s appeal from a magistrates’ court,

(iv)where the Court of Appeal allows any part of a defendant’s appeal from the Crown Court,

(v)where the Court of Appeal decides a prosecutor’s appeal under Part 37 ([F3Appeal to the Court of Appeal against ruling at preparatory hearing or in response to jury tampering]) or Part 38 (Appeal to the Court of Appeal against ruling adverse to prosecution),

(vi)where the Court of Appeal decides a reference by the Attorney General under Part 41 (Reference to the Court of Appeal of point of law or unduly lenient sentence),

(vii)where the Court of Appeal decides an appeal by someone other than the defendant about a serious crime prevention order, or

(viii)where the defendant is discharged under Part 1 or 2 of the Extradition Act 2003;

(See section 16 of the Prosecution of Offences Act 1985 and regulation 14 of the Costs in Criminal Cases (General) Regulations 1986(1); section 36(5) of the Criminal Justice Act 1972 and paragraph 11 of Schedule 3 to the Criminal Justice Act 1988; article 14 of the Serious Crime Act 2007 (Appeals under Section 24) Order 2008; and sections 61 and 134 of the Extradition Act 2003.)”

Acquitted or not prosecuted defendants

Under Section 16 of the Prosecution of Offences Act 1985, a defendant may be awarded costs out of Central Funds if:

• They are acquitted of all charges.
• The prosecution offers no evidence, and the case is dismissed.
• The prosecution discontinues the case before trial.
• Central Funds costs may also be awarded if a case is discontinued due to mental health findings or he defendant is ultimately found not guilty by reason of insanity under the Criminal Procedure Insanity Act 1964

Costs can be awarded either upon application by the defendant or at the court’s discretion using a Defendant’s Costs Order, and they typically include:

• Solicitor fees
• Barrister fees (if instructed)
• Travel and accommodation (in limited situations)

Self-funding defendants

Historically, self-funding defendants who were found not guilty could recover their private legal fees in full. However, following LASPO 2012, the position changed significantly:

• In the Magistrates’ Court, only defendants who qualify for and are refused legal aid can recover costs, and even then, only at legal aid rates, which are significantly lower than private rates.
• In the Crown Court, acquitted defendants who chose private representation may still recover costs, but again only at legal aid rates.

This change aimed to reduce public expenditure but has sparked criticism for its impact on access to justice.

Can Private Prosecutors Recover Costs?

Private prosecutors may recover costs from Central Funds under Section 17 of the Prosecution of Offences Act 1985 (‘the Act’) in relation to proceedings involving indictable offences, certain either-way offences, and in some cases, summary matters—provided that the prosecution was not conducted by the Crown Prosecution Service during the relevant period.

This provision should be read alongside Part 45 of the Criminal Procedure Rules 2020, which sets out the procedural framework. In essence:

• The default position is that the court must make an order for costs.
• If the court finds that the full amount claimed is not reasonable, it must award a reduced sum that is just and reasonable.
• The court may refuse to make an order if there is a good reason to do so—for example, where a prosecution was brought or continued without good cause.
• Where misconduct is found on the part of the private prosecutor, no costs should be awarded from Central Funds.

The principle underpinning this provision is that private prosecutors should not be expected to bear the financial burden of bringing a prosecution where it was properly undertaken. Accordingly, the court may award recovery of reasonably incurred costs from Central Funds.

What Costs are Recoverable?

Costs awarded from Central Funds must be “reasonably incurred” and “reasonable in amount.” Courts have wide discretion in determining what qualifies.

Recoverable costs may include:

• Legal representation (solicitor and/or barrister) at applicable legal aid rates
• Expert witness fees (if approved and used in the defence)
• Administrative disbursements (e.g., photocopying, postage)
• Interpreter or translation fees (if privately sourced)

However, the claim must be itemised and evidenced. Lump-sum claims are rarely accepted unless costs are minimal or straightforward.

The Assessment Process

Once the court agrees to award Central Funds Costs, the process proceeds to the Legal Aid Agency (LAA) for assessment.

The key steps involved include the following.  General guidance can also be found here.

1. Submit a Claim – Claimants can submit their claim using the applicable form (there are various forms such as the DCO1 and DCO2), which may be emailed to the Criminal Cases Unit (CCU) for assessment.  This should be done within 3 months of the order, though an extension can be applied for via email.
2. Itemise Costs – Claimants should evidence costs with supporting invoices, time logs, and receipts.  The CCU will not pay for items which cannot be substantiated with evidence.
3. Assessment by LAA – An assessment will be conducted by a costs officer who determines whether the claimed amount is reasonable.
4. Payment – The payment will be made directly to the legal representative or to the defendant if they paid personally.

If a party disputes the assessment, there is a right of appeal to a costs judge.

Impact of LASPO 2012 and Legal Aid Restrictions

The introduction of LASPO 2012 led to significant changes in criminal costs recovery:

• Private Legal Costs Limited: Defendants in the magistrates’ courts can only recover legal aid-equivalent rates if they are refused legal aid and are later acquitted.
• Means-Tested Legal Aid: Legal aid applications are subject to strict financial criteria, which has left many middle-income defendants ineligible for free representation.
• Financial Disincentive: Acquitted individuals may still be left with substantial unrecoverable costs, discouraging private representation and creating inequality in the system.

The reforms were justified by the government as a cost-saving measure, but critics argue they undermine the principle that an innocent person should not suffer financial loss for defending themselves.

Costs Against the Prosecution

In rare cases, a defendant may seek a costs order against the Crown Prosecution Service (CPS) or private prosecutor, especially if the prosecution was deemed malicious, negligent, or vexatious.

However, courts are cautious in making such awards. The burden lies on the defendant to show that the prosecution acted improperly or unreasonably. Most cost recovery is still made from Central Funds, not directly from the prosecuting authority.

Special Cases: Private Prosecutions

If a person initiates a private prosecution, they may seek to recover their costs from Central Funds if the prosecution is successful. This is permitted under Section 17 of the Prosecution of Offences Act 1985. If the prosecution fails, however, they may face cost liabilities themselves.

Courts are increasingly scrutinising private prosecutions to ensure they are not used abusively or without merit. Cost awards are not automatic and depend heavily on the circumstances of the case.

How can ARC Costs Assist?

ARC Costs are a team of experienced Costs Lawyers and Costs Draftsmen who regularly assist solicitors in recovering Central Funds costs. Should you wish to discuss your costs query with us, please contact us on 01204 397302 or email the team at info@arccosts.co.uk. Alternatively, you may complete the enquiry form on our website and a costs expert will contact you to discuss your query.

Follow Us