Luckhurst, R. v [2022] UKSC 23 (20 July 2022)
Citation:Luckhurst, R. v [2022] UKSC 23 (20 July 2022).
Subjects invoked: 86. 'Criminal 5 - Police Process'.
Rule of thumb:If you are being criminally investigated by police for fraud and have your bank account frozen, if a separate civil case is raised against you during this period, can you get money from your frozen bank account to pay solicitors to defend the civil case? Yes! The general rule is that if a person is under police investigation for fraud & their bank account is frozen, if a separate civil case is raised against them during this period, they can still get money from their frozen bank account to pay legal fees to defend this separate civil case against them.
Background facts:
This case invoked the subject of ‘Police processes’. It particularly invoked the principle of ‘reasonable living expenses’, and the right of a person under police investigation for fraud to obtain funds seized from them & frozen under proceeds of crime so that they can pay lawyers to defend a separate civil law case they are involved in.
The facts of this case were that Luckhurst was a former sportsman who was fairly well-known – he played both football and cricket. After his sports career Luckhurst got involved in financial services, namely investments – taking savings from people and investing it for them. Luckhurst was seen as a likeable and trustworthy person in the public eye who people were prepared to trust with their savings. However, Luckhurst’s firm got accused of fraud, and their investment device was alleged to be a Ponzi scam in breach of criminal fraud laws. There was cause for ‘reasonable suspicion’ to investigate Luckhurst over this, and the Police therefore froze all of Luckhurst’s financial assets under the Proceeds of Crime Act 202. However, a separate civil case was raised against Luckhurst during this period, so Luckhurst sought to obtain funds from his frozen bank account to pay for this, namely, £3,000 to pay solicitors to defend this.
Whether Luckhurst was entitled to this came down to an interpretation of s41 (3) & (4) of the Proceeds of Crime Act 2002. 'S41. Restraint Orders … (3) A restraint order may be made subject to other exceptions, and an exception may in particular - (a) make provision for reasonable living expenses and reasonable legal expenses; (b) make provision for the purpose of enabling any person to carry on any trade, business, profession or occupation. (4) But where an exception to a restraint order is made under subsection (3), it must not make provision for any legal expenses which - (a) relate to an offence which falls within subsection (5), and (b) are incurred by the defendant or by a recipient of a tainted gift'. The Government argued that s41 of this Act stated that an accused person like Luckhurst was not entitled to access their seized funds to pay for stellar legal defences against any accusations they were faced with. They argued that this Act only allowed for deductions from these seized assets for basic ‘living expenses’ and basic legal expenses, and nothing more. Luckhurst argued that £3,000 to start preparing a defence of a civil legal claim was a reasonable living expenses and fell within the Act.
Judgment:
The Court upheld the arguments of Luckhurst. The Court affirmed that if someone has their funds and assets frozen under POCA 2002, they are entitled to £3,000 from their estate to pay solicitors for legal defences to be made to any separate civil claims they face during this period.
Ratio-decidendi:
‘the purpose or policy of section 41(4) is best understood as not precluding an exception for legal expenses in respect of civil proceedings for causes of action. In contrast, the provision precludes the legal expenses of defending the alleged criminal offence(s) and resisting the confiscation and restraint orders themselves. On the correct interpretation, legal expenses in respect of civil proceedings for causes of action (such as for torts or equitable wrongs) are not precluded but are controlled by the courts’ discretion in the same way as, for example, living expenses’, Lord Burrows
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.