Supreme Court Rules That Suspected Fraudsters Can Spend Frozen Assets On Statutory Costs

The Supreme Court ruled today that fraudsters could spend frozen assets on reasonable legal costs in civil proceedings prior to a criminal trial over the £ 15.25 million Ponzi scheme.

The Criminal Proceedings Act of 2002 (POCA) does not preclude "exceptions to legal costs in civil proceedings", which proceedings are subject to "same or similar allegations, alleged facts and / or evidence". It will be raised in connection with it Caused the creation of a detention order, "convened by the British Supreme Court.

Independent Financial Adviser Andrew Luckhurst, 71, was sued by an investor in his financial services business in 2016 and was dismissed after a partial settlement of civil proceedings the following year for £ 2.71 million worldwide. It was subject to a freeze order.

Police have already investigated allegations of fraud, and the public prosecutor's office obtained a detention order for Luckhurst's assets under POCA shortly after the freeze order was lifted. Luckhurst, among other things, has applied to change the order so that £ 3,000 can be spent on legal advice in initially denied civil proceedings.

However, his appeal was granted by the Court of Appeals. The Court of Appeals allows POCA Section 41 (4) to make reasonable legal expenditures in civil proceedings solely because they are engaged in the same fact-finding, in whole or in part. We have ruled that it does not prevent us from doing so. In a criminal trial that gives rise to a detention order. "

The Supreme Court unanimously dismissed the CPS appeal today, and Sir Burrows said: A certain kind of reasonable cost. "

"The policy of the binding order clause is not just to ensure maximum confiscation," he added. Therefore, it is argued that legal costs that are clearly unrelated to criminal offenses may be incurred, such as when the (accused) criminal seeks to bear the legal costs of a divorce or party wall dispute. Not done. This will inevitably reduce the amount of profit available for divorce, but is allowed.

"Therefore, the general purpose or policy of the binding order clause is to balance the goal of ensuring confiscation with the need to allow the (accused) criminal to bear certain types of costs. is."

The judge concluded that "legal costs related to civil lawsuits for the cause of the proceedings (tort, tort, etc.) are not excluded, but are controlled at the discretion of the court, for example, like living expenses."

Jeremy Lederman, a civil fraud and freeze order expert at boutique company Harold Benjamin, commented: In such cases, there is always a balance between the defendant's right to access frozen funds to pay the legal costs of dealing with a civil procedure and the consequences of the same facts regarding the criminal procedure. Is taken. 'Right to be properly compensated.

"The Supreme Court yesterday modified the pursuit of a policy of maximizing confiscation by the need to ensure that detention orders do not unreasonably prevent criminals who bear certain types of reasonable costs (alleged). It has been revealed that it will be done. "... And the provisions of the binding order, which emphasized that policy, do not merely guarantee maximum confiscation. Therefore, the court ruled that reasonable legal costs in civil proceedings could be accessed from frozen assets at the discretion of the court.