It seems that the answer is unclear.
It may often be the case that a civil litigator drafting a settlement agreement in full and final settlement of a civil claim has not considered the possibility of a private criminal prosecution being brought. Indeed, the claimant’s solicitor may not even have suggested that the defendant has committed a crime.
Even if the solicitors representing the parties have considered the possibility of a private criminal prosecution being brought, there is a risk that such an agreement may be considered as stifling a prosecution and therefore unenforceable. Paragraph 16-046 of Chitty on Contracts (32nd edition incorporating the first supplement) states:
“Whether… agreements, for example, one involving a promise not to bring a criminal action, would not be unenforceable is not clear”.
Treitel on The Law of Contract (14th edition) posits the view that the legality of an agreement to stifle a prosecution (which does not amount to a conspiracy to pervert the course of justice or to the offence of concealing a relevant offence under section 5 of the Criminal Law Act 1967) should depend on whether it is in the public interest that a prosecution should be brought. He goes on to say at paragraph 11-046 that:
“An ordinary civil claim can, of course, be validly compromised, even though the facts giving rise to the claim may also amount to a crime. But in such a case an agreement to abandon “any legal proceedings” may be illegal, as this phrase is wide enough to refer to possible civil and criminal proceedings”.
Any attempts to compromise liability for a private criminal prosecution should be treated with caution. Litigators acting for defendants in civil disputes where criminal activity is relevant would probably be wise to warn their client of the risk that their opponent might later try to pursue a private criminal prosecution.
We would be interested to hear of your experiences.