Are POCA restraint orders a significant change?

On 1 June 2015 the Restraint Orders (Legal Aid Exception and Relevant Legal Aid Payments) Regulations 2015 came into force, which, together with amendments made to section 41 of the Proceeds of Crime Act 2002 (POCA), now permit the assets of a defendant, subject to a restraint order, to be used to meet defence costs.

While that proposition may make the ears of defence lawyers prick up, it is not a change that is going to permit the use of any assets to directly meet defence costs. The beneficiary will be the legal aid fund, and the change will affect few cases. The change has more to do with correcting an anomaly in liability to make legal aid contributions than with making any significant contribution to recouping legal aid expenditure.

Since the coming into force of POCA, it has been impermissible to use restrained funds to finance defence costs in the proceedings or in respect of
the restraint order itself.
An exception to the restraint order remains available to permit unrelated reasonable legal expenses.

Any restraint order under section 41 POCA post 1 June 2015 must contain a legal aid exception. The change will not, therefore, apply to restraint orders imposed before that date, although there would appear to be nothing to prevent a prosecutor applying for a new restraint order. Whether that happens in practice will depend on the memorandum of understanding to be reached between the legal aid authorities and prosecutors.

This change permits the continuance of a restraint order after the point at which any confiscation order has been satisfied or discharged. Assets may remain under restraint until any contribution to legal aid costs has been satisfied. It is not obligatory that the restraint order remain in place. Where it is unnecessary for securing the contribution, the order will still be discharged, and control of the remaining assets returned to the defendant.

Same position

The restrained defendant will now be in the same position in respect of legal aid contributions as an unrestrained defendant, save that the contribution will be made at the very end of the case. If the party had not been restrained, they might not have been entitled to legal aid in any event due to their means, so in that respect may be considered better off than the unrestrained person, albeit deprived of the ability to engage representation privately.

Consistency between those restrained and those not in this respect must be right in principle. Why should a defendant with plentiful assets, or who has benefited from crime to such an extent as to attract restraint, be excused from making a contribution to legal aid where able to do so?

Where a defendant is convicted but no confiscation order is made, the restraint order must be discharged. If the rationale is that the wealthy defendant should pay the costs of their defence and a restraint order is necessary to enforce that, there is no logical difference between a case where a confiscation order has been made and satisfied and one where no order is made. This eventuality may simply have been overlooked.

Patchy recovery

The government remains unwilling for understandable policy reasons to allow defence costs to take priority over payment of compensation or confiscation orders. While the headline may be that wealthy fraudsters and major criminals should not have their defence paid for by the public through legal aid, the reality is that will continue to be the position. Cases where substantial assets are restrained tend to be complex and take time to investigate, prepare, and try. Confiscation proceedings can be lengthy. Assets are likely to have been restrained for several years, and diminished in value.

By the time confiscation, compensation, and costs orders are satisfied, there is unlikely to be anything left in most cases, and even where assets remain it will be years before the legal aid contribution is actually made.
The government is aware of this, estimating that the measure might raise some £2m per annum and that it would not affect a significant number of people.
It is also to be expected that recovery will be patchy, and vary significantly from year to year.

The defendant most likely to be affected by this change is therefore not Mr Big, but the defendant who has acquired substantial wealth legitimately, including those employed in the financial and business sectors. SJ

Tim Bowden is a barrister practising from 7 Bedford Row