What is Civil Prosecution?

By the Editor-in-Chief, Neil V. Getnick

Published in Civil Prosecution News, Vol. 1, No. 1, Fall 1995

Civil Prosecution encompasses the field of law aimed at fashioning civil remedies for commercial fraud and related criminal misconduct.

Its principal statutory tools are Civil RICO and False Claims Acts supplemented by various common law state causes of action such as fraud, conversion, and unjust enrichment.

The term prosecution is most often considered in its criminal context. Criminal prosecution involves a public authority. Such a prosecution is framed in terms of “The Government” or “The People.” The remedies sought are likewise so geared (albeit within the past several years public prosecutors have focused more on addressing victim’s needs). Civil prosecution involves a private party or a governmental entity acting in a non-prosecutorial capacity. Accordingly it is targeted directly to the aims of that party. Those aims include stopping the activity, compensating the aggrieved party, deterring future similar behavior, and laying the predicate for criminal action.

Civil prosecution of business crime includes the following steps:

  1. investigating the fraudulent activity;
  2. initiating legal action;
  3. encouraging parallel public prosecution;
  4. tracing funds and locating assets;
  5. obtaining a judgment for money damages and, where appropriate, an injunction prohibiting continuing fraudulent activity; and
  6. effecting recovery, including attaching funds and property.

Civil prosecution differs from traditional civil litigation by recognizing the relative ineffectiveness of the discovery process as the sole or the principal means of uncovering evidence of fraud and by emphasizing an investigative approach focused on the pre-litigation phase. The investigation is conducted by a multi-disciplinary team coordinated by legal counsel working together with investigators, forensic accountants and industry experts. The investigation is geared to the requirements of subsequent litigation. Furthermore, such litigation continues to be supported by the civil prosecution team.

Thus, effective civil prosecution involves the coordination of varying expertise – a team approach. “Can Do” lawyering is the central tenet to guiding that team. “Can Do” lawyering is as much an attitude as an approach. “Can Do” lawyering should direct itself at all stages to identifying and pursuing the goals of the affected client. From the outset, the attorney must be thinking of the final summation at trial and gearing all efforts to assembling the evidence allowing for a successful lawsuit.

The methodology associated with civil prosecution is highly compatible with the development of effective corporate compliance programs focusing on the Federal Sentencing Guidelines and other regulatory requirements. The careful drafting of employee and third party vendor contracts, the implementation of comprehensive loss prevention mechanisms, and the institution of monitoring programs all are part of a comprehensive civil prosecution approach. Ideally, prevention programs would serve to minimize theft and fraud. Monitoring would serve to uncover it. And civil prosecution would provide the means to deal with it.

In this first issue of Civil Prosecution News, we explore the utilization of a cutting edge compliance vehicle, the Independent Private Sector Inspector General; we examine a specialized evidence gathering tool, the private search warrant, exploring its potential broader applicability; and we analyze proposed legislation seeking to amend and enhance, the Federal False Claims Act. “Recent Developments” reports on breaking news in the civil prosecution area. With each issue, we will report on the state of the art in fashioning civil remedies for commercial fraud and related criminal misconduct.