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Civil Recovery
The Proceeds of Crime Act (POCA) 2002 combines previous legislation and introduced wide-ranging, groundbreaking powers to enable the police and law enforcement authorities to reduce the harm caused by crime and the perceptions of crime.
POCA was intended to enforce the 'crime does not pay' message by depriving offenders of the benefits obtained from their criminality (i.e. preventing them living the life of luxury on the proceeds of their crimes). The civil recovery powers are a powerful tool in the asset recovery process and POCA is now the primary legislation used in financial investigations.
On this page:
What are the civil recovery powers?
The civil recovery powers under Part V/VI of POCA and the Serious Organised Crime and Police Act 2005 (SOCPA) provide for:
- Interim Receiver Orders;
- Property Freezing Orders;
- Civil Recovery Orders; and
- Taxation.
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What are Interim Receiver Orders?
Interim Receiver Orders (IRO) prevent named persons from dealing with worldwide property (of all types including "money") and also place restrictions on third parties dealing with the property. The purpose of an IRO is to protect property from potential disposal, diminishment and/or dissipation whilst the origin of the property is investigated. Whilst an IRO is in place the origin of the suspected 'recoverable property' has to be investigated by a receiver appointed by the Court.
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What are Property Freezing Orders?
SOCPA introduced Property Freezing Orders (PFO) with effect from 1 January 2006. The effect of a PFO is much like an IRO, to prevent named persons from dealing with property and to place restrictions on third parties dealing with the property whilst its origin is investigated. However, a PFO allows law enforcement authorities to investigate the origin of the suspected 'recoverable property' themselves and thus avoid the expense of interim receiver fees.
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What are Civil Recovery Orders?
Civil recovery proceedings typically follow a civil recovery investigation. They are instituted against any person believed to hold 'recoverable property' obtained by a person through 'unlawful conduct'. It is immaterial that the person who holds the 'recoverable property' did not perform the 'unlawful conduct' (e.g. an asset stolen on behalf of the holder). If a Court is satisfied that the property is recoverable then it must make a Civil Recovery Order requiring the respondent to forfeit assets believed to be the proceeds of 'unlawful conduct'. No criminal conviction is needed!
A law enforcement authority and the respondent can settle a matter by way of a 'Consent Order' provided that the case is suitable for settlement and that the settlement will not undermine the strategic aims of the law enforcement authority.
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What taxation powers does POCA provide for?
Part VI of POCA provides taxation powers to carry out tax investigations and raise assessments, penalties and enforce tax debts. Tax assessments can be levied where reasonable grounds are suspected that income/gains to a person or profits of a company arise or accrue as a result of the person's or another's 'criminal conduct'. The source of the income does not have to be identified.
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What Court has the power to apply civil recovery provisions?
The High Court has the power to apply the civil recovery provisions.
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Can legal costs be met if civil recovery proceedings have been instituted?
When POCA was introduced, it prevented funds under an IRO being released to the suspect/defendant for legal expenses incurred in relation to POCA Part V civil recovery proceedings. SOCPA amended this with effect from 1 January 2006 and provided for funds to be released to meet reasonable legal expenses incurred or to be incurred in relation to POCA Part V civil recovery proceedings.
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What is the standard of proof in civil recovery proceedings?
The standard of proof is on the balance of probabilities.
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Are Civil Recovery Orders and Consent Orders being extensively sought?
Yes. Following the abolition of the Asset Recovery Agency in April 2008, the powers of civil recovery in England and Wales were transferred to other law enforcement agencies including the Serious Fraud Office (SFO) and HM Revenue & Customs. Within six months of having these powers the SFO agreed a £2.25 million settlement with Balfour Batty plc (plus a contribution to its costs) following an investigation into payment irregularities.
In 2010/11, the Serious Organised Crime Agency (SOCA) alone obtained Civil Recovery Orders and Consent Orders (civil recovery settlements) totalling £9.5 million and froze £13.7 million of assets under civil and tax powers. In 2009/10, these figures were £22.3 million and £89.7 million respectively.
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I am subject of civil recovery proceedings. What should I do?
If you are subject of civil recovery proceedings the worst thing you can do is nothing. Specialist advice is essential and OneE TDI can help.
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How can OneE TDI help?
POCA is a draconian piece of legislation. In many cases, it has been properly used and led to criminals losing their 'ill-gotten gains'. However, OneE TDI has acted or been instructed in a number of cases where we have successfully demonstrated that the Prosecution's assertions either had no supporting evidence, were unjust or there would be a serious risk of injustice were the Court to agree them.
At the core of OneE TDI is a highly experienced team specialising in all areas of POCA investigations. Mark Taylor was a Case Director in HMRC's Restraint, Confiscation & Civil Forfeiture Unit and became an Accredited Financial Investigator authorised by the Asset Recovery Agency. He successfully obtained and executed POCA Court Orders and so knows how best to present and defend a case. He is now an associate member of the Proceeds of Crime Lawyers Association (POCLA) and is a recognised expert in this area of law.
We offer confidential, non-judgemental and invaluable advice and have a proven track record in successfully challenging Prosecution assertions that property was derived from (or to be used in) crime, defending clients facing POCA tax assessments and negotiating civil recovery settlements with law enforcement authorities.
Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.
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How can I contact OneE TDI?
If you would like a free, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below:
Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.
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Proceeds of Crime Act (POCA) Investigations