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SFO Confirms the Use of Civil Recovery Orders

Tuesday, 7 May 2013

Any doubts about the continued use of civil recovery orders as a means to tackle criminal activity such as serious or complex fraud have recently been dispelled. There were some indications that these orders might be dropped to emphasise a tougher approach by authorities but the SFO has recently confirmed that they will still be used as ‘an additional means of dealing with certain cases’.

Proceeds of Crime Act 2002

Under Part V of the Proceeds of Crime Act 2002, investigating agencies such as the Crown Prosecution Office and the Serious Fraud Office may issue proceedings to recover property obtained through unlawful conduct. The proceedings themselves are against the property rather than the individual so can be used without the need for the actual criminal conviction of a person.

Standard of Proof

While the standard of proof remains, as in all civil proceedings, ‘on the balance of probabilities’; the courts require strong evidence which point towards the property being obtained through unlawful conduct. However, the conviction of a particular individual is not required as proof that the property was obtained through the commission of crimes such as racketeering, fraud etc.

Although a lack of a lawful explanation from an individual as to how property was obtained is not satisfactory proof, an inference can be drawn by the court that such property was obtained through unlawful means. Since the civil recovery proceedings are against the property, it is superfluous whether the individual with possession of the property may or may not have carried out the unlawful conduct.

Civil Recovery Orders Remain Useful

The appointment of David Green in April 2012 as Director of the Serious Fraud Office had placed some doubt on whether Civil Recovery would remain as a tool used by the agency. Such doubt was a consequence of changes made by Mr Green to the SFO’s guidance on self-reporting offences under the Bribery Act, whereby he said no guarantee could be made that civil settlement would preclude prosecution.

However, guidance published in November 2012 by the Attorney General’s (AG) Office recognised the usefulness of Civil Recovery in contributing to harm reduction where it was in the public interest, and emphasised that it was open to investigating agencies to use it regardless of whether a decision to criminally prosecute had been taken or not.

Furthermore, in a press statement released a year after his appointment; Mr Green confirmed that it would very much be remaining on the agenda in “cases of serious or complex fraud involving bribery and corruption”, and that the SFO would be following the AG’s guidelines.

The statement also referred to the SFO’s policy to make available in the public domain sufficient information surrounding civil recovery cases “demonstrate transparency in its decision making”. That policy was demonstrated in July 2012 following a settlement with Oxford University Press over its admission of unlawful conduct in Tanzania and Kenya.

For more information about civil recovery orders please contact us on 0207 611 4848.

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