Restraint orders: Reasonable suspicion and reporting

On 1 June 2015 a number of ?provisions took effect as a result of the implementation of the Serious Crime Act 2015 (SCA). One of the most notable changes was that section 11 of the Act amended section 40 of the Proceeds of Crime Act 2002 (POCA) to adjust the threshold for applying for a restraint order from ‘reasonable cause to believe’ to a ‘reasonable suspicion’ that the suspect has benefited from criminal conduct.

The threshold is notably lower. As was said in ?R (on the application of Eastenders Cash and Carry Plc) v South Western Magistrates’ Court [2011] EWHC 937 (Admin): ‘It is plain that a belief is more than a suspicion and that the need to have reasonable grounds for a belief imposes a higher threshold than the need to have reasonable grounds for a suspicion’.

The term ‘suspicion’ denotes ‘a degree of satisfaction, not amounting to belief, but at ?least extending beyond speculation’.  

The other well-known requirements to apply ?for a restraint order remain in place, namely that there must be a fear of dissipation of assets, and that there must be full and frank disclosure to the court when the application is made. 

The reason for the change is stated in the ?second report of session 2014 to 2015 by the ?Joint Committee on Human Rights, where the government could be seen to confess that the number of restraint orders granted in recent ?years had steadily declined since the judgment ?in Windsor v Crown Prosecution Service [2011] ?EWCA Crim 143 because ‘the prosecution [had] to show not only that there [was] a likelihood that somebody [would] be convicted and that there [would] be a confiscation order in place but also [a] likelihood that they [would] dissipate their assets’. 

In fact, this was no new requirement arising in Windsor, but the very cornerstone upon which any application for a restraint should be built. It is trite law to recognise that a restraint order interferes with a person’s right to peaceful enjoyment of possessions pursuant to article 1, protocol 1 of the European Convention on Human Rights (ECHR) and potentially the right to respect for private ?and family life pursuant to article 8, and that any lowering of the threshold to obtain such an order inevitably involves a relaxation of the safeguards essential to ensure compliance with the requirements of the convention.

Whether this lower threshold will be seen ?by the courts as a sufficient check on this intrusive power to make the measure compatible and proportionate with the interference with the fundamental rights engaged will take time to ?be tested through the courts.

Further, the lower test does not affect the assessment of the risk of dissipation of assets, which remains the same, but the court’s assessment of the quality of the criminal conduct alleged. Therefore the reasons given by the government to the committee do not appear ?to justify the alteration made.

One effect of reducing the threshold will be ?that when a person’s arrest is lawfully effected, which requires a police officer to have reasonable grounds to suspect that the arrestee is guilty of ?the offence and that the arrest is necessary, this ?will mean that there will similarly be justification ?for imposing a restraint order as long as a risk ?of dissipation of assets can be demonstrated. ?This may be an unintended consequence of a desire simply to make it easier to obtain the order, but it means the same reasons for arrest, if accepted by the court, will be sufficient to justify the restraint.

Even if a watering down of the test could be justified on this basis, one wonders if this will encourage more speculative and ill-thought-out applications to take place. However, while one might mourn the passing of the ‘reasonable belief’ test from a human rights perspective, what is interesting is that section 11 of the SCA inserts a new section 41(7B), which is intended to soften the blow in terms of the lower test by placing a positive requirement on the court to give ongoing scrutiny to the appropriateness of the order. The longer it remains in existence, the greater the interference with the individual’s rights, and so the harder it will be to justify.

‘Full and frank’ disclosure

The first question is whether the duty to provide the report is only a duty to provide a copy to the court and not the subject of the restraint order. ?The legislation only refers to there being a duty ?to provide the court with the report. It is difficult ?to see how the requirement of ‘full and frank’ disclosure, which is an ongoing obligation in restraint proceedings, can be met if no copy is provided to the defendant. Will it be the case ?that, as a result, applications for restraint orders routinely attempt to argue that reporting conditions should not be imposed, or that ?if they are, a copy of the report should not be ?given to the defendant on the basis that this is likely to prejudice lines of enquiry being adopted by the investigating authorities?  

It is hard to imagine that a report could ?be kept from the defence unless there were to be something sensitive contained within it, in which case an application for public interest immunity would need to be made in that individual case. ?To deny the defence access to the report would ?be to deny them any right to respond, and would undermine the seeming purpose of the provision. 

If an enquiry were so sensitive that even supplying the ‘gist’ of the sensitive information would prejudice the investigation, will closed hearings with appointed special advocates be utilised? If so, what funding will be available for this, bearing in mind that section 41(4) expressly prohibits the release of money to pay for legal expenses to which the restraint order relates. ?It is likely that the investigating authorities would want to adopt a restrictive interpretation and approach in relation to section 41(7B).  

Reasonable time

Furthermore, upon receiving the report the court ?is under a duty to give reasons as to whether it is satisfied that proceedings will be started within a reasonable time. It is axiomatic that the subject of the order would be entitled to know the reasons for the court’s decision, and might wish to challenge those reasons on appeal. Therefore it must be envisaged that the person subject to the order would be entitled to know the contents of the report, or at least the gist of them, in order to ascertain whether the reasons given are legally sustainable or whether they should be subject to further challenge.  

Though the court will be under a duty to proactively discharge the order if proceedings are not started within a reasonable time, in practice many applications for restraint orders, which are routinely made ex parte, are granted by judges working under significant time restraints. It is hard to envisage that already overworked judges will be able to engage in detailed reviews of the minutiae of the reports made by the investigating authority. This leads one to wonder whether in practice judges will be minded to discharge restraint orders on their own initiative, without a formal application from the subject of the order highlighting why they consider that it is unlikely proceedings will ?be commenced within a reasonable time. 

It seems likely that as a result of this, as well ?as a general desire to reveal the bare minimum, investigating authorities will take one of two approaches: 

• They will routinely apply for reporting requirements not to be put in place on the ?basis that they may prejudice the investigation, with the proviso that if the court considers it necessary they can be imposed at a later date; or

• They will adopt a very restrictive approach with only the ‘bare bones’ of the investigation being provided to purportedly comply with the section. 

It also seems inevitable that arguments will exist over what amounts to ‘a reasonable time’, bearing in mind the amount of criticism currently being made in relation to the period of time upon ?which suspects are remaining on bail pending proceedings, and the current proposed changes ?in that regard.  

The changes made are likely to cause more problems than they have solved. 

Rupert Bowers QC is a barrister practising from Doughty Street, which was counsel in Windsor @DoughtyStCrime www.doughtystreet.co.uk

Daniel Godden, pictured, is a partner and the head of serious fraud at Hodge Jones 

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