MEETING LEGAL COSTS IN CIVIL RECOVERY

The Ministry of Justice (MoJ) practice direction of 30.04.10 details, inter alia, the circumstances and procedure for an application to vary or set aside a property freezing order, an interim receiving order or a management receiving order. The one piece of good news for the affected individual is that funding is available.

When the court makes an initial freezing order in civil recovery proceedings it will also consider a variation to allow the affected person to meet his or her reasonable legal costs. However, unless a statement of assets has been filed it will only allow for up to £3,000 worth of legal advice to deal with general advice, the preparation of a statement of assets and an application for the order to be varied or set aside. It is crucial therefore to ensure that a specialist firm is instructed at the earliest opportunity.

It is the statement of assets that is the key to further legal representation and meeting fees in respect of that representation.

The statement of assets is a witness statement which sets out details of all assets owned, held or controlled by a defendant or property in which he has an interest giving details, value and location of all such property. In view of the fact that the SFO, the CPS and SOCA can all make civil recovery applications under the Proceeds of Crime Act 2002, it is not surprising that many defendants are extremely reluctant to comply. The fact that, in theory at least, information can only be used in the civil recovery proceedings may be of little reassurance.

Only when the statement of assets has been provided can additional funding be authorised. If serious consideration is to be given to having the order varied or set aside this can only happen after the statement of assets has been completed.

If a defendant has assets that are not subject to the order then the court will not exclude property from the order to allow for the payment of legal expenses because those assets should be utilised first.

An exclusion for the purposes of meeting legal costs must satisfy the conditions contained in Part 2 of The Proceeds of Crime (Legal Expenses in Civil Recovery Proceedings) Regulations 2005.

These Regulations contain conditions relating to specifying what work may be covered by the exclusion from the freezing order, the amount of work that can be undertaken and provides for the release of funds.

The Regulations also provide for agreement of funds by the prosecuting authority, and for the basis for assessment of legal expenses. In the event that the prosecuting authority are not prepared to agree the figure then 65% of the requested sum can be released.

In circumstances where a Recovery Order is made then there will be provision in the order for payment of reasonable legal costs, and also a detailed assessment of such costs.

If no Recovery Order is made then the individual can apply for Costs so that they are not out of pocket. From the perspective of the affected individual there is therefore nothing to lose by instructing legal representatives immediately.

Olliers
Castlefield Chambers,
Manchester,
M34NF.
0161 827 7010
www.olliers.com
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Notable cases

2011:R –v- B, Liverpool Crown Court, acquittal of defendant in multi-million pound class A drugs conspiracy.
2011:R –v- B, Northampton Crown Court, Olliers act for Company Director in multi-million MTIC fraud.
2011:R v S,York Crown Court instructed by accountant alleged to have conspired to defraud HMRC.
2011:R –v- B, York Crown Court, representation of defendant facing allegation of conspiracy to steal from department for Food and Rural Affairs.
2011: R –v- B, Manchester Crown Court, acquittal of client on murder allegation.
2010:R –v- T, Bradford Crown Court. acquittal of client in conspiracy to supply Class B.
2011:R-v-E, Manchester Crown Court. acquittal of client in multi-handed local council fraud.
2011:R –v- F, Manchester Crown Court, Company Director acquitted in multi-million pound alcohol diversion fraud.
2011 : R –v- G, Kingston Crown Court, representation of Company Director in connection with £20million MTIC fraud.
2011:R –v- P, Birmingham Crown Court, Olliers instructed by defendant alleged to have been involved in largest ever attempt to import Class A drugs into the UK.
2011:R –v- J, Manchester Crown Court, representation of financial advisor facing allegation of conspiracy to commit fraud during the course of a buy to let business.
2011:R –v- B, Mold Crown Court, Olliers act for charity co-ordinator facing allegations of misappropriation of funds received from Welsh Government Assembly.
2011: R –v- B, Southwark Crown Court, representation of Director of a potato company facing bribery allegations involving major supermarket.
2011:Olliers instructed by former Managing Director plc in connection with SFO investigation into collapse of business with bank debts of £75million.
2011: R –v- C, Southwark Crown Court, representation of former solicitor accused of conspiring to defraud Building Society of £500,00.00.
2010: R –v- S, Manchester Crown Court, Acquittal of defendant in Facebook Juror Case, multi-million pound drugs conspiracy.
2011: R –v- A, Kingston Crown Court, Olliers act for a CEO of Dubai company alleged to have been involved in multi-million pound money laundering offences
2010:R –v- G, Mold Crown Court, Company Director acquitted following 5 week Trading Standards Timeshare prosecution.