Restraint orders are court orders that prevent someone who is either under criminal investigation or who is being prosecuted for a crime from dealing with property such as companies, bank accounts, real estate or other assets.
The orders are obtained from a Crown Court by a prosecutor or accredited financial investigator in respect of an individual they consider may have benefitted from criminal conduct.
The requirements necessary to obtain a restraint order are set out in the Proceeds of Crime Act 2002 and vary slightly depending on the stage criminal proceedings have reached.
It is possible both to challenge a restraint order and also to apply to vary it. The orders can be made subject to exceptions, such as to pay reasonable living expenses. They can also be discharged altogether if the investigation or proceedings are unreasonably delayed.
The applicant does not need to provide the Crown Court with a huge amount of evidence in order to obtain a restraint order against an individual.
For anyone under criminal investigation in England and Wales the applicant needs only to show that there are ‘reasonable grounds to suspect’ the individual in question has benefited from criminal conduct.
When granting the order, the court should include a requirement that the applicant periodically report to the court on the progress of the investigation. It must discharge the order if criminal proceedings are not started within a reasonable time.
The evidential situation changes slightly once criminal proceedings have started (normally defined as being once someone has been charged with an offence). The applicant must instead demonstrate that there is ‘reasonable cause to believe’ that the individual has benefited from their criminal conduct. This is a higher evidential threshold than that required at the investigation stage.
The Proceeds of Crime Act states that the court cannot make a restraint order if there has been undue delay in continuing the proceedings or if the prosecutor does not intend to continue with the criminal proceedings.
Restraint orders can apply to any asset, anywhere in the world. They can also apply to any property which has been given to another person for less than its true value.
Restraint orders can be subject to certain exceptions. These include enabling the individual to make legal aid payments as well as to cover reasonable living and legal expenses. The legal expenses exception does not permit the use of funds to pay legal expenses relating to the criminal offences under investigation.
A restraint order may also make provisions to enable any person to carry on any trade, business, profession or occupation.
In addition to the restraint order, the court has the ability to make an ancillary order, for the purpose of ensuring that a restraint order is effective. This secondary order could include a requirement to provide certain information to the law enforcement agency applicant, such as the details of bank accounts or other property. The court may also consider whether it is necessary to restrict or prohibit travel outside the UK in order to ensure that the restraint order is effective.
Restraint orders can be applied for by a criminal prosecutor or an accredited financial investigator. In most cases the application is made in private without any advance notice to its intended target.
The applicant must provide the court with a witness statement setting out the basis for the application. If the application is made without notice, the applicant should also provide the court with any information which might undermine its own application. If the applicant is subsequently shown to have failed to provide important information to the court, then it may be possible for the order to be challenged on this basis.
An application can be made to the Crown Court to vary a restraint order, for example to change the amount of money provided to meet reasonable living expenses or to run a business. It is also possible to apply for specific variations, for example to permit the sale of a property (though in most cases like this the proceeds of resulting sale will then need to be subject to restraint).
If the order was made before criminal charge, then it is possible to apply to discharge the order if criminal proceedings are not started within a reasonable time. All restraint orders must be discharged at the conclusion of proceedings.
It is possible to challenge a restraint order on the basis that the requirements for making one were not met, or if there was a failure to disclose information which could have resulted in the court refusing to make the order. Anyone seeking to do this is advised to do so without delay.
Hickman & Rose’s lawyers have a wealth of experience dealing with restraint orders, particularly as they relate to complex financial investigations and proceedings. We can advise on whether there is basis for challenging or discharging any order and can assist with making applications to vary the order to meet living and business expenses.
Anyone who is a regulated professional or who runs their own business may find that the imposition of a restraint order also results in action being taken against them by other regulatory agencies.
Hickman & Rose is vastly experienced in defending against the criminal and regulatory investigations which run alongside restraint orders. Our criminal, regulatory and civil lawyers work together to ensure a strategic consistency of approach, which prioritises our clients’ ultimate goals over any one discrete issue.