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Proceeds of Crime Act 2002

Interim receiving orders (England and Wales and Northern Ireland)
Section 246: Application for interim receiving order

305.Sections 246 to 255 make provision for ‘interim receiving orders’ in England, Wales and Northern Ireland; equivalent provisions for Scotland are at sections 256 to 265. Under subsection (1) interim receivership procedure may – but need not always – form the preliminary stage of civil recovery procedure.

306.An ‘interim receiving order’ is, as subsection (2) explains, a court order for:

  • the detention, custody or preservation of property which is claimed to be recoverable property or associated property, and

  • the appointment of an interim receiver in respect of that property.

307.Under subsection (1), the first step in the procedure is for the Director to make an application to the High Court for an interim receiving order. The Director may do this even though he has not yet issued the claim form. And he may do so without putting any interested party on notice that he is doing so, if giving notice would prejudice the Director’s right to recover the property (subsection (3)). It may be necessary to act swiftly and without alerting potential parties, for example, to prevent property from being concealed or disposed of.

308.The court may make an interim receiving order only if the conditions set out in subsections (5) and (6) are satisfied. The Director must satisfy the court that:

  • there is a ‘good arguable case’ that the property in question is either recoverable or associated property (the ‘good arguable case’ test is already used by the civil courts for applications for injunctions to freeze disputed property during litigation so that ultimate enforcement of judgment cannot be frustrated. Freezing injunctions were formerly known as ‘Mareva’ injunctions (and this is still the appropriate term for such orders in Northern Ireland)), and

  • if the property in relation to which the order is sought includes associated property, he has either identified or has taken all reasonable steps to establish the identities of the person(s) holding that property (if the interim receiving order is made or the proceedings otherwise go ahead, the Director will have to put these persons immediately on notice under section 243(2)).

309.The Director must also, under subsection (7), nominate someone suitably qualified to act as interim receiver. But the Director may not nominate a member of his own staff. This is because the interim receiver on appointment becomes an officer of the court and has investigatory duties (see section 247(1) and (2)) and it is thought appropriate that the interim receiver should be independent of the Director, who is a party to the litigation. The characteristics of an interim receiving order are spelled out more fully at sections 247 to 255, but under subsection (8) these sections do not limit the extent of the power to make the order. Subsection (8) has been included to make clear that the High Court retains the inherent discretion which it has in civil litigation to make appropriate orders when making interlocutory injunctions.

Section 247: Functions of interim receiver

310.The detailed functions of an interim receiver will be conferred by the High Court’s order itself. The Court’s discretion to confer whatever powers it considers appropriate to the circumstances of an individual case are at large, provided always they are for the purposes set out at subsections (1) and (2), i.e. the detention, custody or preservation of the property or establishing whether it is recoverable or associated property or whether other property is recoverable property in relation to the same unlawful conduct.

311.Subsection (1)(a) introduces Schedule 6, which makes explicit mention of some of the more significant powers that the court may choose to confer on an interim receiver. An explanatory note about Schedule 6 is included below.

312.Although the High Court has a wide discretion over the powers and functions that may be conferred on an interim receiver, there are some duties under which he must always be placed. Subsection (2) sets these out. He will always be required to take the necessary steps to establish:

  • whether in his view the property is to any extent recoverable or associated property, and

  • whether there is any other property which is recoverable in relation to the same unlawful conduct and if so who holds it.

313.Up until the interim receiving order or the issuing of the claim form (whichever comes first), the Director has access to the civil investigation powers set out in Part 8. Thereafter, the Director ceases to have access to these powers and the duty of taking whatever further steps are needed to establish the facts about the property is placed upon the interim receiver acting under the Court’s direction.

314.Subsection (3) provides legal protection for the interim receiver if he mistakenly, but honestly and reasonably, deals with property that is not the property specified in the order. He will have immunity from any legal claims in respect of loss or damage caused by such dealing, unless it can be shown that it was caused by his negligence.

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Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

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