Serious Organised Crime Agency (SOCA) v Azam & Ors

When considering an exclusion from a property freezing order to meet legal expenses, the court must limit any exclusion to reasonable expenses reasonably incurred and must consider whether the respondent has other property outside the order from which those expenses can be paid.

The desirability of legal representation is important, but it does not require an exclusion where the statutory and procedural conditions are not met. Mere suspicion that other assets exist is insufficient. However, deliberate non-disclosure of assets, coupled with unreliable statements of truth and evidence indicating further undisclosed resources, may satisfy the court that other assets are available.

SOCA brought civil recovery proceedings under the Proceeds of Crime Act 2002 and obtained a property freezing order against Amir Azam. Azam had been represented by Saunders Law Ltd, and later instructed Rahman Ravelli Solicitors.

Saunders sought release of approximately £223,796 plus VAT for past legal expenses. Azam sought release of funds for his present and future legal expenses. SOCA opposed both applications, relying on the reasonableness of the sums claimed and on evidence that Azam had assets outside the property freezing order, including an undisclosed Luxembourg bank account.

1. Both applications were dismissed, with costs to be assessed in the absence of agreement.

2. Under section 245C(5) of the Proceeds of Crime Act 2002, an exclusion for legal expenses must be confined to reasonable expenses reasonably incurred, specify the total amount releasable, and be subject to the required conditions. The court was not conducting a taxation exercise, but the material supplied had to provide a sufficient explanation of the work claimed.

3. The court considered the interaction between section 245C(6), which requires regard to the desirability of representation, section 245C(8), concerning prejudice to the enforcement authority’s recovery rights, and paragraph 7A.4 of the Civil Recovery Proceedings Practice Direction. An exclusion should not be made where the court is satisfied that the respondent has property outside the order from which reasonable legal expenses may be met.

4. The bill submitted by Saunders included 943 hours of preparation and total claimed costs of about £350,000, including sums already paid. Despite the acknowledged difficulty of the proceedings and Azam’s imprisonment abroad, the supporting material did not sufficiently establish that the bill was reasonably drawn or that the claimed sum was due. Saunders’ application therefore failed independently on reasonableness.

5. Points concerning other possible sources of funding raised suspicion but, standing alone, did not establish the existence of unfrozen assets. The decisive matter was the deliberate omission of the Banque de Luxembourg account from Azam’s statement of assets. The court found that Azam knew of the account, understood the obligation to provide full and complete disclosure, and deliberately failed to disclose it.

6. That finding meant that Azam’s statements of truth could not be relied upon and that his assertion of having no unfrozen assets was unreliable. The court was satisfied that he had not provided full and frank financial information and that further sizeable assets existed from which both his past and present solicitors could be paid.