The National Crime Agency v N & Anor (Rev 1)

The statutory consent procedure under Part 7 of the Proceeds of Crime Act 2002 does not oust the court’s jurisdiction to grant interim relief. The procedure is, however, highly relevant to discretion. The public interest in preventing money laundering will ordinarily be decisive, and judicial intervention during the notice or moratorium period is likely to be exceptional.

Consent to a transaction does not imply that the National Crime Agency regards the property as clean or lacks evidence or suspicion of criminality. An interim declaration effectively determining criminal liability requires, if available at all, a high degree of assurance. A mandatory injunction should not compel a bank to commit or risk committing an offence.

A payment institution held numerous accounts with a bank. The bank suspected that funds in some accounts were criminal property, froze the accounts and made disclosures to the National Crime Agency. Although the Agency consented to returning account balances to the institution, it had not consented to all the specific third-party transactions subsequently requested.

Burton J granted mandatory injunctions requiring specified payments and interim declarations that the bank would neither commit an offence nor be obliged to make disclosures by executing them. The Agency appealed to prevent the orders from establishing a precedent, although the completed transactions were not challenged.

The central questions were whether Part 7 of the Proceeds of Crime Act 2002 excluded or restricted interim relief, whether the evidential and discretionary requirements for declarations and injunctions were satisfied, and whether the orders conflicted with European Union law.

1. Appeal allowed. Part 7 of the Proceeds of Crime Act 2002 did not oust the court’s jurisdiction to grant interim relief. Removing such important powers and corresponding rights of access to justice would require clear legislative wording. The statutory procedure nevertheless governed the exercise of discretion.

2. Parliament had entrusted decisions on consent following an authorised disclosure to the National Crime Agency and had prescribed notice and moratorium periods representing a workable and reasonable balance of competing interests. A court should ordinarily refrain from intervening during those periods. The private parties’ balance of convenience could not displace the public interest in preventing money laundering. Intervention was likely to be exceptional, although exceptionality was not itself the legal test.

3. The bank ordinarily had the stronger balance of convenience because an order might compel it to commit or risk committing an offence. That prejudice might be overcome by showing no real prospect of criminal liability or no genuine suspicion. The limited evidence and the restrictions against tipping off would commonly prevent such findings at an interim hearing.

4. The Agency’s consent to returning funds did not imply that it possessed no evidence or suspicion of criminality. Consent could be given for several reasons, including operational reasons connected with combating money laundering. The judge’s contrary findings and conclusion that liability was fanciful were unsupported by the evidence.

5. The declarations purported temporarily to answer substantive questions about criminal liability which naturally required a final determination. Assuming such interim relief was legally available, the court needed the high degree of assurance generally required for a mandatory injunction, particularly because payment under the declarations would determine the practical issue permanently. That threshold was not met.

6. The declarations were integral to the mandatory injunctions. Without protection from possible criminal liability, the injunctions could not stand. The judge had also omitted the statutory public interest from the balance of convenience. The declarations and mandatory injunctions should not have been granted.

7. It was unnecessary to decide the European Union law ground. The orders concerned specified transactions rather than granting the bank general immunity from disclosure duties or criminal liability.

Hickinbottom and Simon LJJ agreed with Hamblen LJ.

• Court of Appeal (Civil Division): By [2017] EWCA Civ 253, unanimously allowed the National Crime Agency’s appeal and held that the interim declarations and mandatory injunctions should not have been granted.
• High Court (Queen’s Bench Division): Burton J made orders on 19, 20 and 22 October 2015 requiring specified transactions and declaring that the bank would not thereby commit an offence or incur disclosure obligations. The citation of those decisions is not stated in the judgment.