AP U Ltd v Crown Prosecution Service & Anor

A statutory prohibition on using restrained property for legal expenses relating to an investigated offence is compatible with Article 1 of the First Protocol where Parliament has provided state funding as the alternative. In a field of broad social policy, isolated hard cases do not establish disproportionality. The alternative funding would need to be illusory before the statutory choice fell outside permissible bounds.

Article 6 requires effective access to a court, not a present entitlement to use restrained assets. A stay for unfairness may be required if an actual inability to present the case arises. Proceedings sufficiently connected with suspected offending also relate to that offending for the purpose of the prohibition.

The appeals concerned restraint orders under the Proceeds of Crime Act 2002. AP, who faced confiscation proceedings after convictions, sought release of restrained funds because the available public funding was said to be inadequate to secure suitably experienced counsel. HHJ Mole refused the application.

U Ltd and its directors were subject to restraint orders during a money-laundering investigation. HHJ Goymer refused to release funds for proceedings concerning the restraint order, but allowed funds for the company’s judicial-review proceedings concerning consent for banking facilities. U Ltd challenged the refusal to vary the order. The Crown challenged the judicial-review variation.

The central issues were whether section 41(4) was compatible with Article 1 of the First Protocol and Article 6, and whether the judicial-review costs related to the investigated offences.

1. Disposition. The court dismissed AP’s appeal and U Ltd’s appeal. It allowed the Crown’s appeal and refused U Ltd’s application to vary the restraint order for judicial-review expenses.
2. Article 1 of the First Protocol. Section 41(4) of the Proceeds of Crime Act 2002 prevents an exception permitting payment, from restrained assets, of legal expenses relating to the relevant offence. The restriction serves the legitimate objective of preserving property which may be criminal proceeds for a possible confiscation order. Parliament was entitled to decide that assets with a possible criminal origin should not fund the defendant’s lawyers, while providing state aid as the alternative.
3. The proportionality assessment required a fair balance between the public interest and property rights, with substantial weight given to Parliament’s judgment in broad social policy. The possibility that funding arrangements produce hardship in atypical cases did not show that the statutory restriction was incompatible. The position would be different only if state aid were illusory. Any actual unfairness to an individual or company could be addressed under Article 6 in the proceedings themselves. The court therefore refused the requested declaration of incompatibility.
4. Article 6. The court accepted that Article 6(1) was engaged in U Ltd’s civil litigation. The relevant question was whether the company had effectively been prevented from presenting its case. It had not: it had exercised its rights fully to that point. Article 6(1) access rights were less stringent than the minimum criminal-defence rights in Article 6(3). A future stay might be required if unfairness actually arose, but no such case had then been shown.
5. Connection with the offence. Applying the construction accepted in In re S (Restraint Order; Release of Assets) [2005] 1 WLR 1338, restraint-order expenses related to the relevant offence. The judicial-review proceedings also related to the investigated offences. They arose from transactions suspected of forming part of a dishonest money-laundering scheme. Consent could relieve a bank of criminal responsibility, but did not sever the connection between those transactions and possible offending by others.

• Court of Appeal (Criminal Division) — in AP U Ltd v Crown Prosecution Service & Anor [2007] EWCA Crim 3128, dismissed the appeals by AP and U Ltd, refused a declaration of incompatibility, and allowed the Crown’s appeal against release of funds for judicial-review costs.
• First-instance proceedings — on 4 April 2007, HHJ Mole refused AP’s application to vary the restraint order. On the same date, HHJ Goymer refused U Ltd’s application for restraint-order expenses but allowed judicial-review expenses; on 12 April 2007 he dismissed the application to discharge the restraint order.
• Earlier Court of Appeal stage — on 8 August 2007, the court dismissed U Ltd’s appeal against refusal to discharge the restraint order and adjourned the remaining variation issues.