Nuttall & Anor v National Crime Agency

A disclosure order under the Proceeds of Crime Act 2002 does not require reasons when made on paper, although the statutory threshold must be met. Delay in using the order is not automatically abusive; its justification depends on the scale and complexity of the investigation and the risk of frustrating recovery proceedings.

A property freezing order does not require proof of a risk of dissipation. The court must instead consider whether there is a good arguable case that knowledge of the investigation or assets could lead to dissipation. Ancillary disclosure requirements may be imposed where they facilitate the freezing order. Searches of electronic devices may be lawful where safeguards, including targeted keyword searches and identification of irrelevant personal material, adequately protect privacy rights.

The applicants challenged orders made during a civil recovery investigation under the Proceeds of Crime Act 2002. The first application sought discharge of a disclosure order made by Simon J in 2011 and information notices issued in 2015. The second sought discharge of a property freezing order made by Phillips J in 2015.

The challenges concerned delay, the absence of reasons for the paper disclosure order, access to data on seized electronic devices, the alleged need to prove dissipation under section 245A, and an obligation to provide information about the acquisition of frozen assets.

1. The application to discharge the disclosure order and information notices was dismissed. A disclosure order made on consideration of the papers is lawful if the judge is satisfied that the statutory grounds are established. There is no general legal duty to give reasons for making such an order on paper. The safeguard is that the supporting evidence must be disclosed as necessary if the order or an information notice is challenged.

2. Delay does not, without more, make later use of a disclosure order an abuse of process. The court must assess whether the lapse of time and the enforcement authority’s conduct are justified. Here, the extensive and complicated investigation, the need to obtain a fuller picture before questioning the applicants, and the first applicant’s bankruptcy justified the delay.

3. Access to material on seized computers and telephones engages privacy and correspondence rights under Article 8 of the ECHR and Articles 7 and 8 of the EU Charter. The law does not require an independent counsel in every case. It was sufficient that the applicants could identify devices containing sensitive family material and that the NCA proposed principally to use keyword searches to exclude irrelevant material.

4. The application to discharge the property freezing order was refused. Section 245A does not require proof of a risk of dissipation. The judge must consider whether the circumstances establish a good arguable case that knowledge of the investigation or the assets could lead to dissipation and frustrate recovery.

5. The requirement in paragraph 8 of the property freezing order to provide information about how identified assets were acquired was lawful. It was ancillary to the injunction and fell within the power under section 37(2) of the Senior Courts Act 1981 to impose such terms and conditions as the court considered just.

6. The applicants were required forthwith to make the disclosures required by the information notices and paragraph 8 of the property freezing order.