It is estimated that organised crime costs the UK some £40bn a year. The Proceeds of Crime Act 2002 ­trailblazed some unprecedented powers of asset restraint and confiscation in an attempt to remove the profit and, ultimately, motivation for committing economic crime.

The unapologetically pervasive reach of the definition of ‘criminal lifestyle’ undoubtedly increases the commercial risk of committing such crime to such an extent that, even if it were accepted that an offender will probably be successful most of the time in avoiding detection, the authorities only have to be lucky once to potentially recover the proceeds of a lifetime of crime.

These new powers, acknowledged as being draconian, have been embraced by the police, the Crown Prosecution Service and other prosecuting agencies to such an extent that it seems to be more the exception than the rule for a restraint or confiscation order not to be on the prosecution agenda.

Applications for restraint orders regularly need to be made during the embryonic stages of an investigation. As a consequence, the Association of Chief Police Officers and the CPS entered into a service level agreement (SLA) which was intended to, among other things, serve as a general guide for co-operation and provide protocols for making applications for restraint under the act. It is the consequence of this agreement, more specifically the CPS applying for a restraint order prior to charging a suspect, which is the focus of this article.

On close examination, it is arguable that the CPS may not have locus standii to apply for restraint orders prior to a suspect being charged. That is, any such order made may be ultra vires the act and void ab initio. There are five conditions that may invoke the jurisdiction of the Crown court to exercise its powers to make a restraint order, only two of which are relevant to this discussion: if a criminal investigation has been started; or if proceedings for an offence have been started.

The law is clear as to the relevant stage at which the power to restrain lies. The legislation deals separately with the ‘criminal investigation’ and the ‘proceedings’ stages – they are not interchangeable. The issue therefore is whether the CPS has locus standii to apply for a restraint order while the case is still at the pre-charge criminal investigation stage.

Who has the power to apply for a restraint order?The applicants for a restraint order include the prosecutor and an accredited financial investigator. It is interesting to note that the act refers to ‘the prosecutor’ not ‘a prosecutor’, yet the SLA seems to be premised on a number of presumptions, namely that:It must be remembered that the CPS might not be the prosecuting authority. Prosecutions may also be mounted by other agencies – in fact, it may not be until the investigation has been substantially completed that the prosecuting agency is determined. Therefore, until that decision is made, one may not know the identity of ‘the prosecutor’. Of course, none of this would ever be a problem if the applicant was the accredited financial investigator.

  • the CPS will always be the prosecuting authority;
  • any CPS prosecutor can make an application for a restraint order; and
  • the application can be made at any time by a prosecutor.

Issues that require resolution are:

  • What is a criminal investigation?
  • When does a suspect become a defendant?
  • When does a potential prosecutor become ‘the prosecutor’? For example, can there be a prosecutor before there is a defendant?

A criminal investigation is an investigation that police officers or other persons have a duty to conduct with a view to it being ascertained whether a person should be charged with an offence. Note that at this stage, as there is a possibility that a person is not going to be charged, there would not seem to be any role for a prosecutor, and it must also be accepted that there is no person who could properly be referred to as ‘the prosecutor’. Therefore, if an application for a restraint order is premised on the first condition of a criminal investigation having commenced, it is arguable that the CPS would not have locus standii, because there is neither a defendant nor a prosecutor.

When does a suspect become a defendant?The power under the act is to grant a restraint order prohibiting ‘any specified person’ from dealing with realisable property. There is no requirement for there to be a defendant, and orders are regularly made against innocent third parties, including financial institutions. One will also note that, when comparing paragraphs 40(2)(b) and (3)(b), the act does differentiate between ‘the alleged offender’ and ‘the defendant’.

A defendant is a person against whom proceedings for an offence have been started. Therefore, unless the criminal investigation stage can be classified as falling within the definition of proceedings for an offence, an alleged offender cannot be properly described as a defendant. Section 85 actually defines when proceedings for an offence are started, which seems to coincide with the end of the criminal investigation as it relates to the particular suspect.

Surely you can’t have a prosecutor if you don’t have a prosecution? Without an identified defendant, proceedings for an offence cannot be started, so how can there be a prosecutor? If there is no prosecutor, an application for restraint cannot be made pursuant to section 42(2)(a) of the act.

This may be the reason for granting an accredited financial investigator the power to make an application for a restraint order. If a prosecutor has locus standii to make an application at the investigation stage, why give the power to an investigator at all? Surely it would seem to be an unnecessary duplication of powers.

The act has made a deliberate demarcation between the criminal investigation and commencement of proceedings, and with that distinction follows defined powers in relation to applications for restraint orders. That is, until the proceedings for an offence are started, there is no prosecutor. A potential prosecutor still falls short of being ‘the prosecutor’.

Does section 3 of the Prosecution of Offences Act 1985 provide the authority? While section 3 of the 1985 act deals with the various roles of the director of public prosecutions, it does not seem to provide pre-charge locus standii for the purposes of restraint applications. Not all functions performed by the DPP are in his capacity of being a prosecutor: that is, being a prosecutor is only one important function of the director. It at least must be highly questionable whether when, for example, the director gives advice to police under subsection 3(e) of the act, that advice automatically makes him the prosecutor. What if, for example, the advice is that there has not been a criminal offence committed or that another agency should assume the prosecutorial duties – how on any interpretation can the advice giver be considered ‘the prosecutor’?

The legal status of restraint ordersIf the CPS is the applicant and turns out not to have legal standing, the restraint order must be void ab initio. Those who chose not to comply may well be able to avoid prosecution for breaching the order. Furthermore, the improper granting of the order may be sufficient for an aggrieved person to commence civil action against the CPS for damages. There is also a significant risk of compromising international mutual legal treaties and assistance.

It is interesting to note that when the Cayman Islands chose to model its new Proceeds of Crime Law 2008 on POCA, it avoided any possibility of doubt surrounding who in fact has locus standii to apply for restraint orders. While, not unlike in the UK, a restraint order may be granted at the criminal investigation stage, only the attorney general may make an application for the order, regardless of the stage of the investigation or proceedings.

There needs to be an urgent audit to establish how many pre-charge POCA restraint orders are in existence and whether they are valid. Potentially depriving a criminal of a lifetime of proceeds of crime is motivation enough to test the legal point, and if the concerns raised have merit, the damage caused is most unfortunate as the solution was so simple.

John Masters is Crown counsel in the attorney general’s chambers in the Cayman Islands