Prior to 1 October 2012 a defendant acquitted following a criminal trial was entitled to apply for a Defence Costs Order (DCO) from Central Funds.

The Legal Aid, Sentencing and Punishment of Offenders Act 2012 introduced a new provision which applied to cases committed or sent to the Crown Court after 1 October 2012.

Schedule 7 of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) 2012 amended the Prosecution of Offences Act (POA) 1985, which meant that from 1 October 2012 the ability to claim a DCO had dramatically altered in the following ways:

• Defendant companies who are successful at either the Magistrates or Crown Court are not allowed to claim back a DCO for any case prosecuted post October 2012 - they could only do so in Supreme Court proceedings;
• Individuals acquitted in the magistrates court can claim back a DCO but capped at legal aid rates;
• Individuals on a successful appeal to Crown Court against conviction or sentence imposed in the Magistrates Court can claim a DCO again capped at legal aid rates;
• Individuals successfully acquitted at trial on Indictment at Crown Court are not entitled to claim back DCO at all between 1 October 2012 and 27 January 2014; and
• Since 27 January 2014 - there is a new legal aid threshold test in the ‘Transforming Legal Aid’ Reforms which applies to individuals. If a defendant has an annual household disposal income of £37,500 or more, then they would not be eligible for legal aid and can only pay privately for legal representation. For a DCO to be made in this case, section 16A (5A) POA states that the Director of Legal Aid Casework has to have made a determination of the defendant’s financial ineligibility. If a DCO is made under these provisions, it is again capped at legal aid rates.

On 9 July 2012, the Ministry of Justice published guidance which stated in any of the above scenarios where a DCO can be awarded, if the defence is of exceptional complexity or exceptional expertise is brought to the case, a 100% uplift on costs can be sought.

To date Keoghs’ crime and regulatory team have recovered costs in the total sum of £1,099,345.80 on behalf of insurer clients from claims made by way of a DCO. This includes costs recovered both prior to and after the introduction of the new provisions as stated above.