Our present institutions for financing criminal investigations are odd and inconsistent. If a policeman needs a tank of gas, he buys it. If he needs the use of my office for a week or my body for three months, he takes it. When the government seizes land by eminent domain it pays, in theory at least, its market value. But when the government imprisons a suspect, there is no reimbursement for his lost time. When the government closes down a firm in order to search its office or its books, the firm is expected to swallow its lost profits.
One might argue that a criminal is responsible not only for the damage done by his crime but for the cost of catching him as well. If so, perhaps it is just, when one of the costs of catching a guilty criminal is imprisoning him while collecting enough evidence to prove his guilt, or one of the costs of proving that a firm has been doing something illegal is closing down the firm while the investigation proceeds, that the guilty criminal or firm should bear that cost. Under present law, however, the innocent suspect or the innocent firm receives no more reimbursement than the guilty. Indeed, the situation is worse than that. If a suspect is convicted, time served before trial is likely to count towards his sentence, so the guilty suspect is reimbursed, in time, for the time he was held. The innocent suspect is not.
So far I have referred to "suspects," but a firm may be required to bear such costs even when there is no reason to believe it has done anything illegal. In the notorious case of the secret service's 1990 raid on Steve Jackson Games, the stated basis for the search was not evidence that Steve Jackson had done something illegal but that one of his employees, acting as a private individual on his own time, had. The secret service's theory, insofar as it had a coherent theory, was that the firm's computers might contain evidence of illegality by that employee or others.[1] The fact that seizing all of the firm's computers, disks, and papers and holding them for several months resulted in nearly putting the firm out of business was merely a side effect, possibly regrettable, but with no implications for the legal liability of the agents responsible.
In that particular case, the agents responsible for the raid made some serious legal mistakes, with the result that Steve Jackson is currently suing them for two million dollars in damages, and may well collect. If so, it will not be because he was innocent but because he is a publisher; publishers, under existing federal statutes, have special protection against the seizure of works in progress. The mere fact that he was an innocent party forced to bear large costs as part of a federal investigation of someone else's purported crimes[2] gives him no claim for reimbursement. The obvious response of most libertarians, myself included, to considering such situations is that government agents should be fully liable for costs imposed, at least on innocent parties.[3] While that may be the right answer, the case for it is not so clear as it at first seems.
The acquittal of the defendant in a criminal case does not imply that he is innocent in any save a legal sense-only that the prosecution has failed to prove guilt beyond a reasonable doubt. Suppose we interpret "beyond a reasonable doubt" as meaning "at least 90% probability of guilt," and suppose a particular defendant is acquitted because the court believes his probability of guilt is only 80%. If we require the police to reimburse him for the cost of his pre-trial imprisonment,[4] we are punishing them for an offense--imprisoning an innocent man--of which there is only one chance in five that they are guilty.
This argument suggests two alternatives for altering the present legal system. One is to imitate the Scottish system, in which there are three possible verdicts--guilty, innocent, and not proven. A defendant found innocent would be reimbursed for his costs. A defendant against whom the verdict was "not proven," corresponding, let us say, to a probability over 50% but insufficient for conviction, would not be.
A second alternative would be to provide compensation through civil law. After a defendant is acquitted, he can sue the agency that arrested him for the (newly created) tort of imprisoning an innocent suspect.[5] Under civil law, he must prove the tort "by a preponderance of the evidence" in order to prevail--commonly interpreted to mean that he must show it is more likely than not that the accused tortfeasor is guilty. Since one element of the new tort is that the suspect was actually innocent, that means that he must show that the probability of his guilt was less than 50% in order to prevail.[6]
So far, I have treated the probability of guilt as a fact, determined through some objective legal process. The real situation is not so simple--which brings me to a second problem with making government agents responsible for the costs they impose.
The outcome of a criminal case depends, among other things, on decisions made by police and prosecutors. Consider a situation where, at some point in the proceedings, the police begin to suspect that they may have the wrong man. Suspicion is not certainty; they can choose to ignore the evidence that their suspect is innocent or someone else is guilty. They can also choose to do their best to keep such evidence out of sight of the defense. How likely they are to do so depends in part on the cost to them of being proven wrong. Under a legal system in which acquitting the defendant, or dropping charges after he has been imprisoned for some time, results in sizable cash penalties against the police department or its individual officers, the police have a strong incentive to repress their doubts and push for a conviction.
How serious this problem is depends on a variety of factors. If there is a substantial chance that the conviction of an innocent will eventually be discovered and reversed, a police department that suppresses such evidence risks having to pay for years in jail instead of months. If, on the other hand, such a reversal is unlikely, suppressing evidence may be an attractive gamble.
Another factor, of course, is how honest the police are. Few people like to believe that they are personally responsible for putting an innocent man in jail. Unfortunately most of us, including, I suspect, most police officers, are fairly good at bending our beliefs to fit our interests.
Should we change our legal institutions and if so how? Conclusions are left as an exercise for the reader.
Published in Liberty Magazine, reprinted by permission