Can you recover the costs of challenging a Restraint Order?
A Restraint Order (‘RO’), made under ss.40-41 of the Proceeds of Crime Act (‘POCA’), can have a devastating effect on a person’s finances, effectively preventing them from accessing their money. It is possible to challenge an RO on several grounds – this firm has successfully applied to discharge and / or vary ROs for clients. Opposing an RO costs money; is it possible to recover any of that money if you are successful?
Rule 12 the Crown Court Rules 1982, made under s. 52 of the Senior Courts Act 1981 gives the Crown Court (which deals with RO matters) the power to award any costs it ‘thinks just’. Rules 33.47 to 33.50 of the Criminal Procedure Rules deal specifically with costs in Restraint proceedings, and say that the Crown Court can order a party to pay the other party’s costs. By r 33.47(5)(a), the general rule is that the unsuccessful party must pay the successful party’s costs, although the Court can make a different order.
The case law dealing with how and when public authorities will have to pay costs in civil matters heard by the criminal courts is not straightforward. In cash forfeiture and regulatory proceedings, the case law[1] states that the starting point is that no order as to costs should be made even where a party had successfully opposed an order sought by a public authority. Absent unreasonable conduct on the part of the public authority, it is unlikely that a respondent will be able to recoup the costs of opposing an order in such cases.
Recently, in the joint appeals in CMA v Flynn Pharma and CMA v Pfizer Inc,[2] the CMA argued that the principle in the case law referred to above applied to all proceedings involving a public authority exercising a statutory power. The Supreme Court rejected this argument, stating that “there was no generally applicable principle that all public bodies should enjoy a protected status as parties to litigation”.[3]
In cases where there is a clear precedent for the proposition that adverse costs orders would have a ‘chilling effect’ on the public authority’s exercise of its statutory powers (regulatory and cash forfeiture matters, i.e.), the lower Courts do not need to consider the point afresh on each occasion a respondent applies for their costs. Conversely, in cases not covered by specific case law, the Court must consider the risk of the ‘chilling effect’ when deciding whether to award costs against the public authority. The simple fact that a case involves a public authority does not mean that they are protected from having to pay costs.
In the case of Restraint Orders, however, given the provisions in r. 33.47(5)(a) and the recent case law, the CPS can expect to have to pay the respondent’s costs of successful opposing the order.
We have recently agreed the CPS will pay our client’s costs in applying to discharge an RO, so it seems the Crown is aware of this risk, and willing to settle without the Court’s intervention in the matter of costs.
If you have been made subject to a Restraint Order please contact the Crime and Regulatory Department on 020 7632 4300.
[1] See R (oao Perinpanathan) v City Westminster Magistrates’ Court and another [2010] EWCA Civ 40 and City of Bradford Metropolitan DC v Booth [2000] 164 JP 485 re cash forfeiture and Baxendale-Walker v The Law Society [2007] EWCA Civ 233 re regulatory matters.
[2] [2022] UKSC 14
[3] Ibid, per Lady Hall at [97]