GPSolo Magazine - September 2004

Trial Practice

Civil Remedies for Criminal Conduct: Representing the Crime Victim

Representing crime victims raises thorny legal and ethical questions that many experienced civil practitioners, seasoned by years of contract disputes, are ill prepared to answer. The first question, however, is relatively easy: whether to advise your client to contact law enforcement authorities. The answer is almost always yes. Criminal conduct implicates both public and private concerns. Even in those situations where your client might be temporarily embarrassed by the disclosure of criminal activity, or where the prospect of pecuniary recovery might be complicated by the involvement of law enforcement authorities, these private concerns must yield to the public need for disclosure of serious criminal activity.

Next, your client must decide whether to let the criminal investigation run its course in the hopes that prosecutors will win a conviction that requires victim restitution or asset forfeiture, or whether the client should strike out independently by filing a civil suit. These choices usually are not mutually exclusive, and your client ordinarily will not forfeit her status as a crime victim by commencing suit.

The sit-and-wait approach should not be entirely discounted. The resurgent victims’ rights movement has brought strong laws and policies that afford numerous protections to victims of criminal activity. Moreover, some federal and state statutes create special liquidated damages for victims of criminal activity. Apart from court-ordered restitution, crime victims may also benefit from the aggressive use of civil and criminal forfeiture laws by federal and state prosecutors. In addition, many states have enacted crime victims’ compensation funds, which provide financial compensation to certain crime victims.

The civil practitioner should be aware that the sums recoverable by way of restitution may reflect the totality of the criminal defendant’s actual wrongdoing or may be limited to the sums involved in the conduct upon which a criminal conviction was obtained. The practitioner should counsel clients that the mere fact of a criminal conviction may not ensure a full recovery by way of restitution. A further limitation on a restitution recovery is the defendant’s ability (and willingness) to pay.

An obvious advantage of deferring to government investigation and prosecution of criminal activity is that your client will incur little or no out-of-pocket expenses. The obvious disadvantage is that your client will lose control over the process. The prospect of a criminal prosecution is never guaranteed, and the likelihood of a conviction and meaningful restitution judgment must be discounted even further. Of course, acquittal of the defendant in his criminal trial is not fatal to the civil case, as demonstrated by the O.J. Simpson trials. On the other hand, criminal proceedings are frequently slow moving and expensive, and the wrongdoers will have ample opportunity to spend or hide the money diverted from your client’s business before a restitution judgment can be entered and enforced.

These considerations suggest that your client will be well advised to move quickly and independently to seek civil remedies for criminal conduct. A proactive approach may be particularly beneficial in cases where your client is competing with other crime victims for limited restitutionary funds. A client who acquires an attachment or similar lien on criminal proceeds will likely prevail in collateral litigation with other crime victims.

One important complication that often arises in the course of parallel civil/criminal proceedings is the defendant’s invocation of the constitutional privilege against self-incrimination. Parties may invoke it in any proceeding, criminal or civil. Civil defendants facing criminal charges can be expected to invoke it as an effective means to avoid critical civil discovery. The invocation of the Fifth Amendment is not a substitute for relevant evidence, however, and a litigant claiming the privilege against self-incrimination is not “freed from adducing proof in support of a burden which would otherwise have been his.” The claim of privilege will not prevent an adverse finding or even summary judgment if the litigant does not present sufficient evidence to satisfy the usual evidentiary burdens in the litigation.

If the wrongdoer refuses to testify based on an invocation of Fifth Amendment rights, your client may be entitled to an adverse inference that the testimony, if given, would not have supported an innocent version of events. On the other hand, courts are highly respectful of the sacred constitutional privilege against self-incrimination and will frequently grant protective orders, or even stays, of civil litigation during the pendency of criminal proceedings in order to avoid placing an “unnecessary” burden on civil litigants by forcing them to choose between the invocation of their constitutional rights and their defense of related civil litigation.

Another complication that may arise in parallel civil and criminal litigation is the risk that the prosecutors may seek to stay related civil litigation. This is owing to the prosecutors’ desire to control the fact-finding process and the courts’ recognition of this need. Effective prosecutors typically seek to build their cases incrementally, locking cooperating witnesses into versions of the facts during interviews and proffer sessions. Your civil suit threatens the prosecutor’s control of this process by offering an alternative forum—civil discovery—for the investigation of related factual issues.

Courts may be less receptive to a prosecutor’s application to stay related civil litigation if your client can demonstrate that the civil discovery he requires is not likely to intrude on the prosecution’s development of its case, or if your client can demonstrate the compelling need to proceed quickly, before valuable assets that could satisfy a judgment are lost, or before witness recollections are dimmed. Alternatively, the prosecutor may be amenable to a stipulation that would allow your client to proceed with discovery or motion practice in limited areas, while steering clear of areas that are highly sensitive to the development of the criminal case.

Suppose your client has pleaded a triable cause of action and her standing to sue is unquestioned. The obstacles to discovery have been identified and circumvented. The day of trial is drawing near. But days before opening statements, the criminal wrongdoer enters a guilty plea in the criminal case. This is good news for your client and might obviate the need for a trial at all. A criminal conviction will likely have broad preclusive effect that will free your client from the burden of establishing important elements of her civil action.

If certain conditions are present, the doctrine of collateral estoppel bars a party from relitigating, in a second proceeding, an issue of fact or law that was actually litigated and decided in a prior proceeding. A conviction after trial may preclude the wrongdoer from disputing important elements of a parallel civil action, thus sparing your client significant litigation burdens and expenses.

Finally, your client has made a claim for punitive damages. The wrongdoer objects, noting that he is going to jail and thus already being punished by the government for the same conduct giving rise to your client’s civil suit. Punitive damages would, in his estimation, violate the Double Jeopardy Clause. Not to worry. The U.S. Supreme Court has held that double jeopardy does not apply to actions involving private individuals.

David L. Goldberg is associate general counsel and corporate vice president of UBS Financial Service, Inc., in New York City. He can be reached at david.l.goldberg@ubs.com.

for more information about the Section of Litigation

- This article is an abridged and edited version of one that originally appeared on page 32 of Litigation, Spring 2004 (30:3).

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