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Proceeds of Crime Act 2002

Vesting and realisation of recoverable property
Section 266: Recovery orders

348.This section sets out what the court must do if it finds any property to be recoverable. Under subsection (1), if the court finds, on the trial of a civil recovery action or after a proof in Scotland, that any property is recoverable, it must order its recovery. Under subsection (2) a recovery order vests the recovered property in the trustee for civil recovery, whose appointment and functions are set out at section 267. The making of the order is subject to the limitations set out in subsections (3), (4), (5), (6) and (8), and to sections 270 to 278. There are also certain exemptions set out in sections 281 and 282.

349.Under subsection (3) a court may not make any provision in a recovery order that would contravene the European Convention on Human Rights. Under subsections (3) to (5) the court may not make a recovery order if all of the following conditions apply and it would not be just and equitable to make the recovery order. The conditions for England, Wales and Northern Ireland are:

  • the respondent obtained the recoverable property in good faith;

  • before or after the respondent obtained the property, without knowing that the property was recoverable, he took action which he would not have taken if he had not anticipated receiving or had not received the property (for example, he spends his own money as a result of receiving the recoverable property);

  • the making of a recovery order would be detrimental to the respondent, due to the action he had taken in relation to the property.

Subsection (5) makes similar provision in relation to Scotland.

350.In deciding whether it would be just and equitable to make provision in a recovery order in such cases, the court must weigh the detriment to the respondent if the provision were to be made against the interests of the enforcement authority, as well as any other factors that would go to the justice and equity of the case (Subsection (6)).

351.The recovery order may sever the recoverable element of the property from the remainder if recoverable property and associated property subsist in the same property, for example, where property is mixed under section 306 (subsection (7)). The order may also impose conditions on how the trustee may deal with the property (subsection (8)).

Section 267: Functions of the trustee for civil recovery

352.Where it makes a recovery order, or a consent order under section 276, the court must appoint a trustee for civil recovery. The enforcement authority is required by subsection (2) to nominate someone suitably qualified, and may do so from its own staff (this is because unlike the interim receiver or interim administrator the trustee acts in the interests of the enforcement authority following the court’s judgment in favour of that authority and has no investigative functions). Subsection (3) places the trustee under a duty to secure the property which will be vested in him, and to liquidate non-cash assets for the benefit of the enforcement authority. Subsection (4) states that the trustee acts as such on behalf of the enforcement authority and on its instructions. Subsection (5) places the trustee under a duty to maximise the amount realisable from the property vested in him. These provisions together make clear that the trustee must approach his functions with a view to giving the fullest effect to the enforcement of the authority's right of recovery.

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