Explanatory Note
(This note is not part of the Regulations)
These Regulations make provision relating to the payment of legal expenses out of property which is the subject of civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002 (“the 2002 Act”) or Part 5 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (“the Order in Council”). The Regulations extend to England and Wales and Northern Ireland.
Where the Director of the Assets Recovery Agency (“the Director”) may bring proceedings for a recovery order under Part 5 of the 2002 Act or Part 5 of the Order in Council, he may also apply to the High Court for a property freezing order or interim receiving order, which prohibits any person to whose property the order applies from dealing with the property. The Court may make exclusions from that prohibition for certain purposes, which include meeting reasonable legal expenses.
Part 2 of the Regulations specifies certain “required conditions” which must apply to any exclusion from a property freezing order or interim receiving order which the Court makes for the purpose of enabling a person to meet his reasonable legal expenses in civil recovery proceedings.
Part 3 sets out the procedure for the release of frozen property to make interim payments of legal expenses during civil recovery proceedings. Once expenses have been incurred, a person may seek the Director’s agreement to the release of an interim payment in respect of those expenses. The amount which may be released is the amount which the Director agrees or 65% of the amount claimed, whichever is the greater.
Part 4 sets out the procedure for determining the amount payable in respect of legal expenses once the High Court has made a recovery order which vests property in the trustee for civil recovery and provides for the payment of those expenses out of that property. If the expenses are not agreed with the Director, proceedings must be commenced for them to be assessed by the Court. Part 4 applies regardless of whether any interim payments have been made under Part 3, and the amount which must be paid is reduced by the amount of any interim payments.
Part 5 provides that the Court is to assess legal expenses on the standard basis (which is defined in rules of court). It also specifies the hourly rates of remuneration which may be allowed in respect of work done by legal representatives. Higher rates may be allowed for cases involving substantial novel or complex issues of law or fact, and the rates are increased for legal representatives whose offices are situated in certain London postcode areas and districts.
Postcode areas and districts are identified in the Postcode Address File maintained by the Royal Mail. The current postcode for an address may be established by contacting the Royal Mail Postcode Enquiries Office (telephone 0906 302 1222 or 08457 111 222) or visiting the Royal Mail website (www.royalmail.com).
A full regulatory impact assessment of the effect of this instrument on the costs of business can be obtained from the Civil Legal Aid Strategy Division, Department for Constitutional Affairs, Selborne House, 54-60 Victoria Street, London SW1E 6QW. It is also available on the Department’s website (www.dca.gov.uk).