Either fish or an aquarium, either mismanagement or fraud.

A subsidiary indictment is often used in trials for acting to the company’s detriment, i.e. in cases of managerial mismanagement (Article 296 of the Code of Criminal Procedure). When preparing for such a trial, it is worth remembering who can represent the company and take this into account already at the stage of filing a notice of possible criminal offence.

In the case at hand, a subsidiary indictment was filed against the Client by a company, let’s call it “Aquarium”, where the subject of the dispute between the parties was the right to represent it. The Client had been on its board of directors for years and maintained that he still had the right to represent the company. Meanwhile, his litigation opponents, at the stage of filing the subsidiary indictment, usurped the right to represent the Aquarium company. Indeed, at the filing of the indictment, they claimed that they were the ones who had always managed the Aquarium company and that they were still entitled to represent it. They are therefore entitled to bring an indictment on its behalf. In the meantime, a careful analysis of the material gathered in the case has led to the conclusion that the Client’s opponents have become entangled in their argumentation, ultimately falling into contradiction. But let us start at the beginning.

The criminal proceedings were initiated as a result of a notification filed, in which an allegation was formulated against the Client that, being a person usurping the right to perform a function in the management of the company Akwarium, he committed mismanagement, which resulted in causing the company multi-million damage. To the Client’s surprise, the notifying party did not indicate the realisation of the elements of the offence of mismanagement (i.e. a prohibited act under Article 296 of the Penal Code), but indicated Article 286 § 1 of the Penal Code as the legal basis for the notification charge. This provision of the Criminal Act establishes the offence of so-called fraud, and its elements refer to leading the wronged party to a disadvantageous disposition of property as a result of misleading him/her, which is to be done for the purpose of gaining financial benefit.

It should be added that the notification also contains a separate allegation of committing a prohibited act of forging a document, i.e. a prohibited act specified in Article 270 of the Code of Criminal Procedure.

In view of this construction of the accepted allegations, it should first be noted that, as a rule, the prohibited act specified in Article 296 of the Penal Code may be committed only by a person holding a position in the management board of a company (this is the so-called individual offence), while the prohibited act specified in Article 286 of the Penal Code may be committed by anyone (the so-called common offence). The Client’s opponents adopted such – undoubtedly breakneck – qualification precisely to avoid admitting that he was authorised to represent the Aquarium company.

In the course of an extensive prosecutorial investigation, no charges were ultimately brought against the Client. The public prosecutor discontinued the case twice in the course of the pre-trial investigation, each time assuming that the investigation concerned acting to the detriment of the Aquarium company – in accordance with the actual content of the notification, and not the ‘artificially’ adopted legal qualification indicating fraud. The first of the decisions to discontinue the investigation was appealed by the notifier to the court, which overturned the decision to discontinue. Soon afterwards, however, the prosecutor issued a second decision to discontinue the case, which was no longer subject to complaint. Such termination of the investigation, however, opened the way for the victim to file a subsidiary indictment.

And this is where the first problem arises. While two discontinuation of pre-trial proceedings is a necessary prerequisite for an effective subsidiary indictment, it is not a sufficient one. A subsidiary indictment may only be brought (subject to additional conditions) by a victim of the offence in question. If there is no such victim and the public prosecutor has decided not to prosecute, the case ends definitively.

Significantly, however, the subsidiary indictment did not charge the Client, in accordance with the direction of the investigation, with the criminal act of acting to the detriment of the Aquarium company, in order to avoid admitting that the Client had ever been entitled to represent the company. The Client’s litigation opponents filed a subsidiary indictment on behalf of the Aquarium company, claiming that they were the ones who had always been entitled to represent the company. The subsidiary accuser alleged in the indictment that the Client had committed the offence set out in Article 286 § 1 of the Code of Criminal Procedure. (according to his notification), but substantially changed the description of the perpetrator’s action so that this time it fit the legal basis of the charge. Thus, the Client was this time accused of usurping the Aquarium company’s right of representation through misrepresentation and consequently causing damage to it. The litigation opponents also did not fail to accuse the Client of committing the offence of document forgery (Article 270 of the Code of Criminal Procedure).

Such a construction of the charges of the subsidiary indictment made it necessary to raise the question of the right of the procedural opponents to make such amended charges. In their attempt to avoid ascribing to the perpetrator the commission of a prohibited act specified in Article 296 of the Code of Criminal Procedure and admitting that he was authorised to represent the company, they accused the Client of an activity, the subject of which was not subject to preparatory proceedings at all. This is because it escaped the “accusers” that the effective filing of a subsidiary indictment required the formulation of a charge identical to the scope of the previously conducted investigation. In other words, the procedural opponent could change (correct) both the legal qualification and partially the description of the charge itself, but he could not go beyond the previous subjective scope of the investigation. Thus, if the notifier had so far indicated, for example, that the Client had usurped the right to act on behalf of the Aquarium company, thereby causing it financial damage, he, as a subsidiary accuser, was not entitled to attribute to him the act of misrepresentation (of another entity) in order to gain a financial benefit.

In other words, the Client’s opponents could not claim that he had represented the company and that he should bear criminal liability for this (in which case the charges in the subsidiary indictment would be the same as the scope of the investigation) at the same time pointing out that he had not actually represented the company, and that they were always entitled to do so, and that the damage was caused by an unspecified misrepresentation. Figuratively speaking: either an indictment or an Aquarium.

Let us also note that the second of the charges brought against the Client concerning forgery of documents, as proposed, could not be the subject of a subsidiary indictment at all. In the case of offences against the credibility of documents (and document forgery is such an offence), the victim can only be referred to in strictly defined cases, which the forgery alleged against the Client did not fall into.

Unfortunately, the problems outlined above not infrequently arise in practice. Participants in the pre-trial proceedings often usurp the right to prosecute in court instead of the prosecutor, using all sorts of legal “tricks” in the construction of a subsidiary indictment. It happens that such practices are not immediately noticed by the courts, resulting in the need for defendants to take up a defence by means of a subsidiary indictment. As a consolation, it may be added that sometimes defects in a subsidiary indictment may be the subject of a cassation plea to the Supreme Court. However, it is worth verifying the correctness of a drafted subsidiary indictment already during the initiation of jurisdictional proceedings.