A v ACC

For compensation under section 72 of the Proceeds of Crime Act 2002, a serious default in seeking a restraint order is insufficient by itself. The claimant must also establish that the investigation would not have continued to the stage at which the order causing the claimed loss was made.

An application for a restraint order without notice attracts a duty of full and frank disclosure of material which might assist the affected person. That duty may be breached by a collective systems failure, without identifying an individual officer at fault. The statutory causation condition remains distinct from the test used to set aside an improperly obtained order.

The claimant sought compensation from the police under section 72 of the Proceeds of Crime Act 2002. He alleged that the police had seriously defaulted by failing to disclose, when seeking a restraint order, that he was a covert human intelligence source who had supplied valuable information against the suspected source of the property funds.

The police conceded serious default. The issues were whether the investigation would have continued to the making of the restraint order if proper disclosure had been given, and whether the claimant had suffered loss in consequence of the order.

1. The claim failed. The claimant had to prove the statutory conditions on the balance of probabilities.
2. An applicant for a restraint order without notice must make full and frank disclosure of all relevant material, including material which might support the affected person’s response. The duty applies to restraint-order applications under the Proceeds of Crime Act 2002 in the same way as to other without-notice applications: Re Stanford International Bank Ltd [2011] Ch 33. The restraint application should have disclosed the claimant’s CHIS status, his information against X and his asserted defence.
3. A serious default under section 72 may be established as a collective failure of the police force. It is unnecessary to identify an individual officer as responsible. The police conceded that this condition was satisfied.
4. The phrase “would not have continued” in section 72(4)(b) refers to whether the investigation would have continued to the stage of making the order which caused the claimed loss. This was a different question from whether an improperly obtained order would be set aside. The practice concerning unlawful orders obtained without proper disclosure, described in R v (Mills and Mills) v Sussex Police and Southwark Crown Court [2014] 2 Cr App R 34, did not determine the statutory compensation question.
5. On the evidence, the investigation would have continued even if the judge had received full disclosure. The investigation had in fact continued after the officers knew the full facts. The property would also have been restrained under an order concerning X’s assets. The second statutory condition was therefore not established.
6. The court did not need to determine loss. It nevertheless considered that the claimant’s financial difficulties pre-dated the restraint order and were principally caused by the continuing investigation. The third condition was not established either.

First-instance decision. No prior appellate decision is stated in the judgment.