Proceeds of Crime Act 2002, section 245C

Exclusions

Part 5 Civil recovery of the proceeds etc. of unlawful conduct

(1)The power to vary a property freezing order includes (in particular) power to make exclusions as follows—

(a)power to exclude property from the order, and

(b)power, otherwise than by excluding property from the order, to make exclusions from the prohibition on dealing with the property to which the order applies.

(2)Exclusions from the prohibition on dealing with the property to which the order applies (other than exclusions of property from the order) may also be made when the order is made.

(3)An exclusion may, in particular, make provision for the purpose of enabling any person—

(a)to meet his reasonable living expenses, or

(b)to carry on any trade, business, profession or occupation.

(4)An exclusion may be made subject to conditions.

(5)Where the court exercises the power to make an exclusion for the purpose of enabling a person to meet legal expenses that he has incurred, or may incur, in respect of proceedings under this Part, it must ensure that the exclusion—

(a)is limited to reasonable legal expenses that the person has reasonably incurred or that he reasonably incurs,

(b)specifies the total amount that may be released for legal expenses in pursuance of the exclusion, and

(c)is made subject to the required conditions (see section 286A) in addition to any conditions imposed under subsection (4).

(6)The court, in deciding whether to make an exclusion for the purpose of enabling a person to meet legal expenses of his in respect of proceedings under this Part—

(a)must have regard (in particular) to the desirability of the person being represented in any proceedings under this Part in which he is a participant, and

(b)must, where the person is the respondent, disregard the possibility that legal representation of the person in any such proceedings might, were an exclusion not made, be [F797 made available under arrangements made for the purposes of Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 or funded byF797] [F798 the Department of JusticeF798] .

(7)If excluded property is not specified in the order it must be described in the order in general terms.

(8)The power to make exclusions must, subject to subsection (6), be exercised with a view to ensuring, so far as practicable, that the satisfaction of any right of the enforcement authority to recover the property obtained through unlawful conduct is not unduly prejudiced.

(9)Subsection (8) does not apply where the court is acting as required by section 245B(3) or (4).

Definitions used in section 245C 8

property freezing order

“property freezing order” has the meaning given by section 245A(2);

Defined in s.316(1) · see it in the full Act
dealing

“dealing” with property includes disposing of it, taking possession of it or removing it from the United Kingdom,

Defined in s.316(1) · see it in the full Act
the court

(10) In this section, sections 120 to 140 and Schedule 3 “the court” means—

(a)the Court of Session, where a trial diet or a diet fixed for the purposes of section 76 of the Procedure Act in proceedings for the offence or offences concerned is to be, is being or has been held in the High Court of Justiciary;

(b)the sheriff exercising his civil jurisdiction, where a diet referred to in paragraph (a) is to be, is being or has been held in the sheriff court.

Defined in s.119(10) · see it in the full Act

“the court” (except in sections 253(2) and (3) and 262(2) and (3) and Chapters 3, 3A , 3B, 3C, 3D, 3E and 3F ) means the High Court or (in relation to proceedings in Scotland) the Court of Session,

Defined in s.316(1) · see it in the full Act
part

“part”, in relation to property, includes a portion,

Defined in s.316(1) · see it in the full Act
respondent

“respondent” means—

(a)

where proceedings are brought by the enforcement authority by virtue of Chapter 2, the person against whom the proceedings are brought,

(b)

where no such proceedings have been brought but the enforcement authority has applied for a property freezing order, an interim receiving order, a prohibitory property order or an interim administration order, the person against whom he intends to bring such proceedings,

Defined in s.316(1) · see it in the full Act
the Department of Justice

“the Department of Justice” means the Department of Justice in Northern Ireland;

Defined in s.316(1) · see it in the full Act
enforcement authority

“enforcement authority”—

(a)

in relation to England and Wales, means the Financial Conduct Authority, Her Majesty's Revenue and Customs, the National Crime Agency , the Director of Public Prosecutions ... or the Director of the Serious Fraud Office,

(b)

in relation to Scotland, means the Scottish Ministers,

(c)

in relation to Northern Ireland, means the Financial Conduct Authority, Her Majesty's Revenue and Customs, the National Crime Agency , the Director of the Serious Fraud Office or the Director of Public Prosecutions for Northern Ireland,

Defined in s.316(1) · see it in the full Act
property obtained through unlawful conduct

“property obtained through unlawful conduct” has the meaning given by section 242,

Defined in s.316(1) · see it in the full Act

Cases considering section 245C 9

Luckhurst, R. v

[2020] EWCA Crim 1579 · 24 November 2020Interprets

Section 245C(6) was used in contrasting Part 5 property freezing orders. It expressly permits limited reasonable legal expenses in proceedings under that Part. (see paras [26]; [51]-[52]) Section 245C(7) was used to contrast the Part 5 requirement to consider the desirability of representation in recovery proceedings with the section 41 regime. (see paras [26]; [51]-[52]) Section 245C(8) provides a different preservation steer for Part 5 property freezing orders, requiring recovery not to be unduly prejudiced. This supported the contrast with section 69(2). (see paras [26]; [51]-[52])

The Serious Organised Crime Agency v Azam

[2013] EWCA Civ 970 · 31 July 2013Limits

The court interpreted the power to exclude property from a freezing order for legal expenses. An applicant must show that release would be just in all the circumstances, but need not prove positively that no other assets exist (see paras [24]-[28]; [53]-[66]). The desirability of representation in civil recovery proceedings is an expressly prioritised consideration. It weighed strongly in favour of permitting frozen assets to fund representation where no other assets were shown (see paras [26]; [60]; [77]). The power must be exercised, so far as practicable, without unduly prejudicing the recovery authority’s right to recover property obtained through unlawful conduct. This consideration follows the statutory priority given to representation (see paras [26]; [60]).

National Crime Agency v Ayodele Odewale & Anor.

[2018] EWHC 3903 (QB) · 19 December 2018Limits

The court treated section 245C(3)(a) as conferring the power to vary a property freezing order to permit a respondent to meet living expenses. The application was assessed under that power and dismissed because other assets were likely to be available. (see paras [1], [24], [49]) The court noted that section 245C(6) requires regard to the desirability of representation when considering an exclusion for legal expenses. The present application concerned living expenses, so that requirement did not determine the result. (see para [24]) The court applied the requirement that exclusions be made, so far as practicable, without unduly prejudicing the National Crime Agency’s right to recover property obtained through unlawful conduct. That consideration supported requiring other available assets to be used first. (see paras [24], [37]-[38])

What each judgment says about section 245C is in the case-law panel in the full Act.

Amendments and notes

2 notes from legislation.gov.uk

Amendments

  1. F797Words in s. 245C(6)(b) substituted (1.4.2013) by Legal Aid, Sentencing and Punishment of Offenders Act 2012 (c. 10), s. 151(1), Sch. 5 para. 59; S.I. 2013/453, art. 3(h) (with savings and transitional provisions in S.I. 2013/534, art. 6) this amendment is subject to savings and/or transitional provisions, see the commentary.
  2. F798Words in s. 245C(6)(b) substituted (N.I.) (1.4.2015) by Legal Aid and Coroners‘ Courts Act (Northern Ireland) 2014 (c. 11), s. 12(1), Sch. 2 para. 4 (with ss. 2(3), 9, Sch. 1 para. 3(3)); S.R. 2015/193, art. 2(e)