Legal advice – Living expenses – Money laundering – Proceeds of crime

Crown Prosecution Service v Susan Jane Campbell: Michael Joseph McInerney v Financial Services Authority: Medicines & Healthcare Products Regulatory Agency v Graeme Trevor Carlton: CA (Crim Div) (Lord Justice Hooper, Mr Justice Clarke, Judge Roberts QC): 22 May 2009

The appellant (M) appealed against a decision not to vary a restraint order to allow him to pay a contribution to the Legal Services Commission out of his allowance for ordinary living expenses.

M was the subject of a restraint order made by the Crown Court under the Proceeds of Crime Act 2002 in connection with alleged money laundering offences. The order restrained all known assets of M but allowed him £250 per week towards ordinary living expenses. M applied to the LSC for public funding to seek judicial review of the decision of the Financial Services Authority to commence a prosecution of the money laundering offences. The commission offered the requested funding, subject to the condition that M made a contribution of £117.66 per month from his income. That assessment was made on the basis that M’s income was the £250 per week excluded as living expenses from the restraint order. The commission rejected M’s argument that his income should have been assessed as nil because of the restraint order. The FSA took the view that the payment of the contribution would be a breach of section 41(4) of the 2002 act because it was not possible to make an exception to the order for legal expenses. M applied to the Crown Court for a variation of the order which was refused. The secretary of state for the home department, the secretary of state for justice and the Legal Services Commission submitted that it was the intention of parliament that contributions to the commission would not fall foul of section 41(4) because parliament intended public funding on standard conditions to be available, and that contribution payments by M to the commission as a condition of the funding of the legal costs of his proceedings were not ‘legal expenses’ for the purposes of section 41.

Held: (1) The wording of the restraint order prohibited M from spending the sum of £250 per week for other than ordinary living expenses. Payments to the commission were not ordinary living expenses and M would be in contempt of court to pay money to the commission and the commission would be in breach of the restraint order to receive it. (2) Section 41(3)(a) of the 2002 act made a distinction between living expenses and legal expenses and, if a contribution to the commission was a legal expense, then it would not be a payment towards ordinary living expenses. A contribution to the commission to institute judicial review proceedings in connection with the offence in respect of which the restraint order was made was a legal expense. It followed that a judge who discovered that a contribution was being made to the commission was likely to impose a condition that no such contribution should be made, if not bound to do so in the light of sections 41(4) and 69.

Appeal dismissed.

Jonathan Kirk for the CPS; Dean George for Campbell; Mohammed Khamisa QC, Neil Hawes (instructed by Irwin Mitchell) for McInerney; Simon Gerrish for the FSA; Kennedy Talbot for the MHRA; Nigel Soppitt for Carlton.