Proceeds of Crime Act 2002 - Civil Recovery Proceedings

Overview of the Proceeds of Crime Act 2002 (POCA)

Part 5 of POCA has provided an increased likelihood for investigating agencies undertaking civil recovery proceedings to recover property and/or assets which they believe are the proceeds of crime or criminal conduct e.g. money laundering.Civil recovery for investigating and enforcement agencies, is an alternative option to bringing criminal proceedings against individuals suspected of being involved in unlawful activity. The aim of the civil recovery process is to reach an outcome where the property and/or assets in question are seized, not the individual (despite any suspected criminal guilt). Proceedings can now be undertaken even if an individual has been found not guilty of an offence(s) during criminal proceedings.Part 5 of POCA defines recoverable property as property that is, or represents, property obtained through unlawful conduct, or which is intended to be used in unlawful conduct. Investigating agencies will be aiming to prove that the target property is recoverable (can be forfeited). These investing agencies may include the Serious Fraud Office, National Crime Agency, Financial Conduct Authority, Crown Prosecution Service and HM Revenue and Customs.Whether the property is 'recoverable' or not is to be determined by the High Court and is the responsibility of the investigating agency to prove on the civil law standard of proof - the balance of probabilities - that the assets in question are the proceeds of crime, and therefore should be seized.

Procedure

A Property Freezing Order (PFO) is applied for by the investigating agency and, if successful it is granted by the High Court. A PFO freezes and may allow forfeiture of the defendant's assets including, but not limited to, their bank accounts, houses and cars. This is often the first point at which a defendant would be aware of an investigation.The PFO will require a defendant to explain how they were able to purchase the property/assets in question by disclosing documentation that would prove the legitimacy of their income e.g. tax returns. The investigating agency will rely on a varied portfolio of evidence of their own to argue against this legitimacy, and a defendant must be prepared for this.In order to successfully deal with what can be a drawn-out and complex process, it will be essential for a defendant to be prepared for the questions asked by the Court and to be able to challenge certain aspects of the PFO that would have a major impact on continuing daily life. It is therefore the important job of the solicitor instructed to prepare early and be ready to present a strong and detailed defence before the High Court, arguing against the allegations of illegitimate income and involvement in criminal conduct made within the PFO. Where this is successful, a PFO may be lifted at an early stage.It is common for investigating agencies to enter negotiations with the defendant in order to settle the case. This is another crucial element to this type of claim which requires the expertise and skill of a solicitor that is trained in managing these complicated negotiations, whilst also dealing with the serious allegations made.If the case reaches the final stage, a civil recovery hearing before the High Court, and the investigating agency has been able to prove on the balance of probabilities that the property is in fact recoverable, they will then have the ability to seize it. However, where the property is not considered recoverable by the High Court, there is the possibility for the defendant to claim for compensation. This outcome may be possible where a defendant seeks expert advice, as soon as they are aware of an investigation against them, with skilled and qualified solicitors who are trained in putting forward a complete and thorough defence.

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If you need assistance with any of the issues referred to above, please do not hesitate to reach out to one of our experienced Commercial Dispute Resolution solicitors Michael Miller and Tristan Duncan.