Restraint Orders: when is delay reasonable?

The recent decision in R v S [2019] EWCA 1728 requires some close examination in the context of the jurisprudence surrounding Restraint Orders under Proceeds of Crime Act 2002. A Restraint Order is a creature of the Act made at the discretion of a Crown Court judge and operates to freeze assets of a suspect or defendant in a criminal investigation (or any application ancillary thereto). The order is necessarily draconian and there are statutory pre-conditions for a prosecutor to satisfy before persuading a court that it is able to make it.

In this case there was a very large and complex money laundering investigation into several suspects and involving hundreds of millions of pounds. On 29 August 2018, the Central Criminal Court made a Restraint Order against the Respondent S. the order was far reaching and gave rise to all sorts of complications which necessitated various applications for variation. Eventually on 23 July 2019 the Judge granted an application to discharge the order pursuant to section 42(7) of the Act on the basis that the proceedings for the alleged offence had not been started within a reasonable time.

The Appeal by the Crown turned on the interpretation of that provision which reads: “(7) if the condition in section 40 which was satisfied was that an investigation was started - (a) the court must discharge the order if within a reasonable time proceedings for the offence are not started”.

Lord Justice Davis gave the judgment of the Court. The above provision was in his view mandatory: “the court must discharge the order if within a reasonable time proceedings for the offence are not started”. So the question for the Court was ‘what is a reasonable time?’ In essence the decision was that the words should be taken as they are read and then applied to the facts of each case. The more complex the investigation the more likely it would be that the court would exercise its discretion in permitting delay: “the need to have regard to the “practical realities” of litigious life”.

It did, however, give some guidance on factors to consider for judges to determine the question:

“(1) The length of time that has elapsed since the Restraint Order was made;
(2) The reasons and explanations advanced for such lapse of time;
(3) The length (and depth) of the investigation before the Restraint Order was made;
(4) The nature and extent of the Restraint Order made;
(5) The nature and complexity of the investigation and of the potential proceedings;
(6) The degree of assistance or of obstruction to the investigation”.

Perhaps not surprisingly, given the complexities of the case (and its seriousness) the Court allowed the appeal and quashed the Judge’s decision to discharge the order. However, the judgment was striking for its express departure from the jurisprudence in Freezing Orders in proceedings (which had guided this jurisdiction previously in particular with respect to principles around dissipation for example).

In this regard, Lord Justice Davis had the following to say: “we would express very considerable reservations about bringing in at all to this particular statutory jurisdiction relating to the grant, variation or discharge of Restraint Orders, the approach and principles which apply in the civil jurisdiction relating to the grant, discharge or variation of Freezing Orders”.

This dicta represents a departure from previous authority (see for example R v B [2008] EWCA 1374) and in an era where Restraint Orders are being dished out on the back of any prospective application to reconsider confiscation orders for example, it strikes a discordant note to defence practitioners in this field.