Proceeds of Crime Act 2002, section 280

Applying realised proceeds

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

(1)[F845 Subsection (2) applies to sums which are in the hands of the trustee for civil recovery if they areF845] —

(a)sums which represent the realised proceeds of property which was vested in the trustee for civil recovery by a recovery order or which he obtained in pursuance of a recovery order,

(b)sums vested in the trustee by a recovery order or obtained by him in pursuance of a recovery order.

(2)The trustee is to make out of the sums—

(a)first, any payment required to be made by him by virtue of section 272,

[F846 (aa)next, any payment of legal expenses which, after giving effect to section 266(8B), are payable under this subsection in pursuance of provision under section 266(8A) contained in the recovery order,F846]

(b)[F847 thenF847] , any payment of expenses incurred by a person acting as an insolvency practitioner which are payable under this subsection by virtue of section 432(10),

and any sum which remains is to be paid to the enforcement authority.

[F848 (3)The [F849 enforcement authority (unless it is the Scottish Ministers)F849] may apply a sum received by [F850 itF850] under subsection (2) in making payment of the remuneration and expenses of—

(a)the trustee, or

(b)any interim receiver appointed in, or in anticipation of, the proceedings for the recovery order.

(4)Subsection (3)(a) does not apply in relation to the remuneration of the trustee if the trustee is a member of the staff of the [F851 enforcement authority concerned [F852 (but it does apply in relation to such remuneration if the trustee is a person providing services under arrangements made by that enforcement authority)F852,F851]] .F848]

Definitions used in section 280 2

recovery order

“recovery order” means an order made under section 266,

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

Cases considering section 280 3

Gale and another v Serious Organised Crime Agency

[2011] UKSC 49 · 26 October 2011

The subsection identifies payments made by the trustee before net sale proceeds are paid to SOCA. It formed part of the context for section 280(3) (see para [82]). SOCA’s power to use recovered money to pay an interim receiver did not prevent those payments from also being recoverable from an opposing party as litigation costs (see paras [82]-[83]).

Gale & Ors v Serious Organised Crime Agency

[2010] EWCA Civ 759 · 7 July 2010

Section 280(2) prescribes the order in which realised proceeds are applied. The statutory distribution scheme was material to the conclusion that Part 5 did not confer a general interim-receiver lien over the assets (see paras [66], [76], [138]). Section 280(3) gives the enforcement authority power to apply sums received from the trustee towards the remuneration and expenses of an interim receiver. It supports contractual payment by SOCA but does not prevent a separate costs order (see paras [66]-[68], [99], [135]-[150]).

Serious Organised Crime Agency v Szepietowski & Ors

[2009] EWHC 1560 (Ch) · 1 July 2009Limits

The provision was considered as part of the statutory framework for payment of legal expenses following a recovery order. It did not alter the discretionary nature of the power under section 266(8A). (see paras [36], [42]-[44])

What each judgment says about section 280 is in the case-law panel in the full Act.

Explanatory note

384.This section governs the use of sums in the hands of the trustee for civil recovery. The sums may have reached his hands because:

  • it was the proceeds of sale of non-cash property recovered under section 266 orsection 276, or

  • it was itself vested under section 266 or section 276, or

  • it was paid under the provisions of section 271 as a result of an agreement between the enforcement authority and other persons with non-recoverable interests in the property for them to ‘buy out’ the value of the recoverable property, or

  • it was an amount equal to the value of rights under a pension scheme, paid to the trustee under section 273 or 277.

385.The trustee must first make any payment required to be made by him following an order made under section 272. Second, he must pay expenses incurred by a person acting as an insolvency practitioner. The balance must be paid to the Director or the Scottish Ministers.

All the explanatory notes for the Act

Amendments and notes

9 notes from legislation.gov.uk

Amendments

  1. F845Words in s. 280(1) substituted (E.W.S.) (retrospectively) by Crime and Courts Act 2013 (c. 22), ss. 48(7), 61(11)(d), Sch. 18 para. 5 (with s. 48(8), Sch. 25); this amendment extended to N.I. (20.3.2015) by The Crime and Courts Act 2013 (National Crime Agency and Proceeds of Crime) (Northern Ireland) Order 2015 (S.I. 2015/798), arts. 1(2), 7(a)
  2. F846S. 280(2)(aa) inserted (1.1.2006) by Serious Organised Crime and Police Act 2005 (c. 15), s. 178(8), Sch. 6 para. 18(a); S.I. 2005/3136, art. 3(c)
  3. F847Word in s. 280(2)(b) substituted (1.1.2006) by Serious Organised Crime and Police Act 2005 (c. 15), s. 178(8), Sch. 6 para. 18(b); S.I. 2005/3136, art. 3(c)
  4. F848S. 280(3)(4) inserted (1.7.2005) by Serious Organised Crime and Police Act 2005 (c. 15), ss. 99(2), 178(7)(a); S.I. 2005/1521, art. 2(1)(b)
  5. F849Words in s. 280(3) substituted (1.4.2008) by Serious Crime Act 2007 (c. 27), s. 94(1), Sch. 8 para. 88(2)(a); S.I. 2008/755, art. 2(1)(a) (with arts. 3-14)
  6. F850Word in s. 280(3) substituted (1.4.2008) by Serious Crime Act 2007 (c. 27), s. 94(1), Sch. 8 para. 88(2)(b); S.I. 2008/755, art. 2(1)(a) (with arts. 3-14)
  7. F851Words in s. 280(4) substituted (1.4.2008) by Serious Crime Act 2007 (c. 27), s. 94(1), Sch. 8 para. 88(3); S.I. 2008/755, art. 2(1)(a) (with arts. 3-14)
  8. F852Words in s. 280(4) inserted (1.4.2008) by Serious Crime Act 2007 (Amendment of the Proceeds of Crime Act 2002) Order 2008 (S.I. 2008/949), arts. 1, 2

Commencement

  1. I262S. 280 in force at 24.2.2003 by S.I. 2003/120, art. 2, Sch. (with arts. 3, 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)