Obtaining civil remedies in criminal cases: the UAE, Switzerland and France

Introduction

Fraud and matters involving asset tracing very often have a cross-border, international flavour to them, and in order to pursue such claims effectively and maximise the chances of making a recovery, it is important to have a clear strategy from the outset which can be implemented quickly and efficiently.

Challenges can arise when a wronged party has to navigate through the complexities and peculiarities of different jurisdictions and the specific tools available to them in each. For example, in the UK, where the wronged party’s primary aim is to recover losses and get compensation, the most likely course of action is for the victim to instigate civil proceedings against the perpetrator. Criminal proceedings in the UK have as their focus the punishment of the offender, not necessarily the compensation of the victim. There does exist the possibility of a criminal court making a confiscation or compensation order from which the victim might recover some of its losses. However, that is not the driving force behind criminal proceedings in the UK, and is rarely an alternative to a victim bringing civil proceedings.

In this article, we consider the different frameworks and toolboxes available to wronged parties in three of the jurisdictions where Charles Russell Speechlys operate: the United Arab Emirates, France and Switzerland. In those jurisdictions, there is an enhanced role, to varying degrees, of the criminal court in seeking redress for the victims of financial crime.   

Civil and Criminal Proceedings

The UAE

When it comes to civil and criminal proceedings, the UAE distinguishes between civil claims, governed by the Civil Code^[1], and criminal matters, which are governed by the Penal Code^[2]. The Criminal Procedure Code^[3] allows for a civil lawsuit which arises from the facts of a criminal case to be filed before the criminal court in certain circumstances, and later referred, if necessary, to the civil courts by the criminal court. The criminal court may award civil damages to a victim, although in practice, the criminal court will typically refer the matter back to the civil courts.

There is provision in the Criminal Procedure Code for victims of fraud to apply for a temporary award of damages from the criminal court pending resolution of a civil claim against the defendant.

France 

As in the UK, criminal proceedings in France have as their focus the punishment of the offender. However, under French law, criminal proceedings encompass in the same procedure (i) the prosecution of the offender (“Action Publique”) that could lead to criminal punishment (imprisonment and/or a fine) and (ii) the action to compensate the harm resulting from the offence (“Action Civile”)^[4] that allows the victim to obtain a judgment for its loss and damages. This offers the wronged party a real option between the civil and criminal routes.

Switzerland

In Switzerland, it is possible to pursue civil claims within criminal proceedings through a mechanism known as an "adhesive procedure" (“Adhäsionsverfahren” in German, “action civile adhésive” in French)^[5]. This allows the victim of a crime (the claimant in the civil claim), to seek compensation for damages directly within the criminal trial, without having to initiate separate civil proceedings for civil claims that can be deduced from a criminal offence. Contractual claims are not included in the adhesive procedure.

An adhesive claim is essentially a civil action that is attached to a criminal proceeding. The purpose of this procedure is to streamline the process for injured parties seeking compensation for harm suffered as a result of a criminal offence. It is particularly useful in cases where the criminal act has caused financial losses, property damage and personal injury.

It is often recommended in practice to bring an adhesive claim rather than separate proceedings. The victim of a fraud can benefit from the extensive investigative and evidence-gathering work conducted by the prosecutor’s office, evidence that might otherwise be difficult to obtain in a civil proceeding, and to seek compensation for damages directly within the criminal trial, saving time and resources for the victim.

Parallel Proceedings

The UAE

Whilst victims of fraud in the UAE have the option of pursuing both civil and criminal claims at the same time, both under the Criminal Procedure Code and in practice, any civil claim will be stayed pending the outcome of the criminal action and the criminal conviction is typically used as the basis for substantiating the civil claim.

France

It is also possible to bring separate parallel proceedings in front of a civil judge at any time during the criminal proceedings^[6]. However, once the victim has opted to bring separate civil proceedings, they can no longer participate in the criminal proceedings for their redress^[7]. The decision to pursue separate proceedings is irrevocable.

There are various situations where criminal and civil proceedings can exist in parallel: where the criminal proceedings are commenced by the prosecutor or by a third party for instance, however the victim of a fraud has to decide its path and cannot pursue the two at the same time. The decision has to be made at the beginning of the process and is critical. Each route has advantages and disadvantages, which will be explored in the more detailed article about the French jurisdiction which will be published in the coming weeks.

Switzerland

In Switzerland, it is also possible to bring separate civil proceedings, although they may be stayed if they are likely to be influenced by an ongoing criminal trial.

Further detail on the procedure and its advantages will be set out in the article on the Swiss regime which will be published in the coming weeks.

Interim Remedies

Interim remedies are available in all three jurisdictions, albeit with some differences. Common to all three jurisdictions is the use of travel bans as an interim remedy. The UAE offers precautionary attachments, with the DIFC and ADGM courts capable of issuing common law interim measures like freezing orders. As set out above, it is also possible for a victim who has instigated a civil claim in the UAE to benefit from a temporary award of damages from the criminal court.

In France and Switzerland, as well as freezing orders and travel bans, interim measures may also include provisional imprisonment.

Statute of Limitations

The statute of limitations is a critical factor for clients to consider.

The UAE does not impose time limitations for civil actions arising from fraud or bribery offences. France has a twenty-year limitation for crimes and a six-year limit for other offences if they are brought within criminal proceedings, with a separate five-year limit for civil proceedings. Switzerland has a tiered approach with thirty, fifteen, ten, or seven year limitation periods depending on the nature (seriousness) of the crime. In Switzerland, the longer criminal statute of limitations extends to civil claims if the perpetrator is convicted, which is an advantage if separate civil claims are only instigated after the criminal case has been decided.

Summary

Here we have set out a summary of the main features of the regimes across the three jurisdictions in a table for quick reference.

Concluding remarks

The speed and ease with which perpetrators of financial crime can transfer and conceal assets across multiple jurisdictions means that international asset tracing and recovery is a complex are. It is necessary to have a sophisticated understanding of both civil and criminal proceedings across various jurisdictions. As we have discussed in this article, and as we will explore further in the next insights in this series, the approaches to asset recovery in the UAE, France, and Switzerland offer unique advantages, including the ability to rely on the wide investigative powers of the criminal prosecution authorities.  

Further insight

Over the coming weeks, we will be releasing a series of articles discussing the law in this area in the UAE, France, and Switzerland in greater depth.

Our expertise

We have deep expertise and the ability to operate seamlessly across these diverse legal regimes. We are adept at leveraging the interplay between civil and criminal remedies to maximise recovery for our clients, understanding when to take advantage of the criminal courts’ role in asset recovery. In particular, the benefits that can be obtained across a wider investigation from the input of a criminal prosecutor in one or more jurisdictions.

With offices in many of the world’s major financial centres, including London, Paris, Geneva, Zurich, Dubai, Hong Kong and Singapore, we are ideally placed to work with you to prevent, resolve and assist with financial crime disputes and investigations as they arise, whatever the law, language, rules, industry sector, or subject matter of that dispute may be. Our dedicated multicultural and multilingual specialists conduct proceedings under both common law and civil systems and regularly act in fraud-related proceedings.

Whether you are an individual or a business, our strategically focused specialists will work alongside you through every aspect of any proceedings. Please contact the authors or your usual Charles Russell Speechly LLP contact if you would like to get in touch.

 
[1] Federal Law No. 5 of 1985 on the Civil Transactions Law of the United Arab Emirates (as amended)
[2] Federal Law No. 31 of 2021 on the Issuance of the Crimes and Penalties Law
[3] Federal Law No. 38 of 2022 on the Issuance of the Criminal Procedure Law
[4] Code of Criminal Procedure, article 3
[5] Articles 122 et seq. of the Criminal Code of Procedure
[6] Code of Criminal Procedure, article 4
[7] Code of Criminal Procedure, article 5