An increasing number of people are finding themselves on the receiving end of summary forfeiture proceedings in the magistrates’ court, a system that is designed to be simple and efficient from the point of view of law enforcement, but which carries significant risks for the owners of the property at stake.
Why is my property frozen?
Until relatively recently these proceedings were solely concerned with seized cash, sometimes arising from a criminal investigation, sometimes simply picked up by security checks on arrival into the country. Such cases are still very common, and further detention orders are often granted by magistrates for several months while the source of the cash is investigated. Now, though, magistrates’ courts can also order the detention of ‘listed assets’ (including precious metals and stones, watches, artistic works, face-value vouchers, and postage stamps), and the freezing of funds in bank and building society accounts (by way of so-called ‘Account Freezing Orders’).
What is going to happen?
What these proceedings have in common is that they can ultimately lead to the forfeiture of the property concerned on the basis that it represents the proceeds of unlawful conduct (a broad category, which can cover anything from low-level tax evasion to gross human rights abuses), or is intended for use in such conduct. At the detention or freezing stage, which can last up to two years, all the authorities need to show is that there is a reasonable basis to suspect that the property will be recoverable on these grounds.
Am I accused of something?
It is important to recognise that these proceedings are not criminal in nature, and will not in themselves involve the person from whom the cash or assets are seized, or to whom the account belongs, being arrested for, charged with, or convicted of any offence. Nevertheless, they can have significance beyond the recovery or otherwise of the property in question: adverse findings can have an effect in related criminal cases, for example, in family proceedings, or on a person’s immigration status.
Should I cooperate?
The fact that such proceedings take place in the magistrates’ court, with a deliberate lack of formal procedures (it is common, for example, for the respondent to be served with little more than a short statement from the investigator, rather than a proper evidence bundle), might tend to lead a respondent to think it is safe to respond in kind. An investigator might ask, for instance, for copies of bank statements or receipts, details of witnesses or travel arrangements, proof of the respondent’s income, or consent for a short interview. It may be that in some cases this can all be provided easily, and yield a prompt and positive result. But it may just as easily be the start of a long and onerous enquiry that could lead in unexpected directions.
Do I need advice?
People with an interest in such proceedings (whether are not they are formally the respondent) should consider taking legal advice about the options and risks arising. Of course, it will always be sensible to weigh up the costs of obtaining advice against the value of the property concerned (and to bear in mind the sadly strict limits on recovery of costs, even where the case is won), but responding in the wrong way can have costs and risks of its own. A proper and considered response, conversely, might be capable not just of ensuring the return of the property, but of resolving any related issues that might be lurking in the background.
John Binns is a partner at BCL specialising in all aspects of business crime, with a particular interest in confiscation, civil recovery and money laundering under the Proceeds of Crime Act 2002 (“POCA”). His business crime experience includes representing suspects, defendants and witnesses in cases invoking allegations of bribery and corruption, fraud (including carbon credits, carousel/MTIC, land-banking, Ponzi and pyramid scheme frauds), insider trading, market abuse, price-fixing, sanctions-busting, and tax evasion. He has coordinated and undertaken corporate investigations and defended in cases brought by BEIS, the FCA, HMRC, NCA, OFT, SFO and others.