Price, Re

When considering whether restrained funds may be released to pay legal expenses under the former restraint-order legislation, the availability of public legal funding is ordinarily irrelevant. The governing question is whether releasing the restrained funds is just, including whether the defendant has other available assets. Where the defendant has no funds other than those restrained, access to restrained funds may be permitted for reasonable legal representation, including representation in confiscation and restraint proceedings. Payment remains limited to expenses actually, reasonably and properly incurred. A receiver who is not satisfied on that issue must seek assessment and act in accordance with its outcome.

The receiver and manager appointed under a restraint order made in 2000 sought directions under CPR 69.6(1). The order permitted payment from restrained assets of legal expenses actually, reasonably and properly incurred in the criminal and ancillary proceedings. The defendant had been convicted of drug trafficking and excise-duty offences, and a confiscation order had subsequently been made.

The receiver was concerned about releasing further funds, particularly because public legal funding was available and the existing order provided no effective mechanism for interim payments pending detailed assessment. The central questions were whether restrained funds could be released for the confiscation proceedings, a possible appeal against the confiscation order, and the present restraint proceedings, and how clause 14 of the order should be construed.

1. Permission to release funds. The receiver was permitted to release restrained funds to the defendant’s solicitors for legal expenses actually, reasonably and properly incurred in respect of the confiscation-order hearing, any appeal against that order, and the present restraint proceedings.
2. Effect of public funding. The court was bound by Norris (1991) 2 AER 395. Where there is a real appeal, the defendant may ordinarily access restrained money which might prove to be his own if the appeal succeeds. The availability of public funding does not, of itself, make release of restrained funds unjust or prevent the expenditure from being properly incurred.
3. The approach was consistent with SFO v X [2005] EWCA Civ 1564. That decision confirmed that the defendant bears the burden of persuading the court that variation or use of restrained assets is just, but also recognised that where the defendant has no funds other than the restrained funds it will ordinarily be just to permit their use for reasonable defence costs.
4. Assessment of costs. Clause 14 did not oblige the receiver to pay sums merely because they were claimed. The proper construction was that the receiver need pay only where satisfied that the expenditure had actually, reasonably and properly been incurred. If not satisfied, the receiver had to exercise the power to seek detailed assessment and then act in accordance with the assessment.
5. The unusual order contained no adequate cap or interim-payment mechanism. The parties were expected to agree a sensible mechanism protecting both the restrained assets and the defendant’s legitimate interests. Failing agreement, the receiver could apply to vary the restraint order.