Chief prosecutor could potentially challenge decision to let ...

Victorian prosecutors could force Daylesford crash driver William Swale back before the courts, saying they will "carefully review" a magistrate's decision to dismiss the charges against him.

Mr Swale walked free from Ballarat Magistrates' Court on Thursday after a magistrate dismissed 14 charges, relating to the deaths of five people and six others who were injured.

Mr Swale was in the midst of a medical episode when the SUV he was driving crashed into the group outside a pub last November.

Pratibha Sharma, her partner Jatin Kumar, and her daughter Anvi were killed in the Daylesford crash.  (Facebook)

Prosecutors still have the option of employing a rare legal tactic, known as a direct indictment, to take Mr Swale to trial in the County Court.

"The Office of Public Prosecutions acknowledges the decision of Magistrate Guillaume Bailin not to commit Mr William Swale for trial over the tragic crash in Daylesford last year," a spokesperson for the Director of Public Prosecutions (DPP) said.

"As is the usual course, His Honour's decision will be carefully reviewed in accordance with Prosecution Guidelines with a view to considering whether the matter should nonetheless proceed to trial.

"Our Office reiterates its deepest sympathies to the victims injured in this tragic event, and all the families of those who lost their lives."

Vivek Bhatia and his son Vihaan were killed in the Daylesford crash, while his wife and youngest son were hospitalised. (Facebook)

RMIT law expert Greg Barns said the DPP could use the direct indictment avenue if they believed the magistrate had made an error in dismissing the case at the committal stage, which is when prosecution evidence is tested before a trial.

Mr Barns said the magistrate's decision to dismiss the charges at committal was "uncommon", but not unique.

"The law in Australia says that people who commit what are otherwise criminal actions, or might be criminal actions, have to do so consciously, deliberately and voluntarily," he said.

"And there are those cases where the standard is not able to be met by the prosecution. They're not particularly common but they do happen."

A DPP policy document, which was authorised by outgoing director Kerri Judd last year, said the department could also pursue a direct indictment if it believed there was a reasonable prospect of a conviction, the case was in the public interest, and there had not been "an unreasonable" delay after a magistrate's decision to discharge a case.

The decision to throw out the case against Mr Swale on Thursday was a highly technical one.

At the heart of it, Magistrate Bailin said prosecutors had failed to demonstrate that Mr Swale's decision to get behind the wheel half and hour before the crash was a voluntary act.

This was because a hypoglycaemic attack the type 1 diabetic suffered was so severe that it could not be proved he was aware of what he was doing.

"The evidence is so weak that the prospects of convictions are minimal," the magistrate said.

While the criminal case against Mr Swale has collapsed, a coronial inquest will continue to examine the deaths of Pratibha Sharma, her daughter Anvi, Ms Sharma's husband Jatin Kumar, and Vivek Bhatia and his son Vihaan.

Mayor of Hepburn Shire Brian Hood says the incident has left lasting impacts for the families of the victims and the Daylesford community.

"My thoughts are with the families of the victims at this time, given this outcome.

"And with the community, who were devastated at the time that it happened. This is going to be very traumatic for them."

Preet Singh, a family friend of Vivek and Vihaan Bhatia, told ABC Radio Melbourne the magistrate's decision was "extremely shocking and really hard to comprehend".

"Someone's literally just got away from five deaths, all innocent, beautiful souls — two of them young children who had a full life in front of them," he said.

"So very, very shocking for the whole community.

"We were actually looking forward to justice being delivered to both these families."