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PRACTICE DIRECTION – RESTRAINT ORDERS AND APPOINTMENT OF RECEIVERS IN CONNECTION WITH CRIMINAL PROCEEDINGS AND INVESTIGATIONS This practice direction supplements RSC Order 115

Scope and interpretation

1.1

This practice direction applies to applications to the High Court for a restraint order or the appointment of a receiver under –

(1) Part VI of the Criminal Justice Act 1988 (‘the 1988 Act’);

(2) Part I of the Drug Trafficking Act 1994 (‘the 1994 Act’); or

(3) Schedule 4 to the Terrorism Act 2000 (‘the 2000 Act’).

(Part VI of the 1988 Act and Part I of the 1994 Act are repealed by the Proceeds of Crime Act 2002 from a day to be appointed, but will continue to apply to pending and transitional cases. Following their repeal, applications for a restraint order or the appointment of a receiver which would previously have been made under those Acts will instead be made to the Crown Court under Part 2 of the 2002 Act.)

1.2

In this practice direction –

(1) ‘the prosecutor’ means the person applying for a restraint order or the appointment of a receiver; and

(2) ‘the defendant’ means the person against whom criminal proceedings have been brought or a criminal investigation is taking place, and against whom a confiscation order or forfeiture order has been or might be made.

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SECTION I – RESTRAINT ORDERS

Form of restraint order

2.

An example of a restraint order is annexed to this practice direction. This example may be modified as appropriate in any particular case.

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Amount under restraint

3.1

A restraint order may, where appropriate, apply to –

(1) all of the defendant's realisable property;

(2) the defendant's realisable property up to a specified value; or

(3) one or more particular specified assets.

3.2

Where –

(1) a confiscation order or forfeiture order has already been made against the defendant in a particular amount; or

(2) the prosecutor is able to make a reasonably accurate estimate of the amount of any confiscation order or forfeiture order that might be made against him,

and, in either case, it is clear that the defendant's realisable property is greater in value than the amount or estimated amount of that order, the court will normally limit the application of the restraint order in accordance with paragraph 3.1(2) or (3).

3.3

In such cases the prosecutor's draft order should normally either include an appropriate financial limit or specify the particular assets to which the order should apply.

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Living expenses and legal fees

4.

A restraint order will normally, unless it is clear that a person restrained has sufficient assets which are not subject to the order, include an exception to the order permitting that person to spend assets –

(1) in the case of an individual, for reasonable living expenses; and

(2) in the case of either an individual or a company, to pay reasonable legal fees so that they may take advice in relation to the order and if so advised apply for its variation or discharge.

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Restraint orders against third parties

5.1

Where a restraint order applies to property held in the name of a person other than the defendant –

(1) the order must be addressed to that person in addition to the defendant; and

(2) in applying for the order, the prosecutor must consider the guidance given in the matter of G (restraint order) [2001] EWHC Admin 606.

5.2

Examples of additional persons to whom an order must, where appropriate, be addressed include –

(1) a person who has a joint bank account with the defendant;

(2) in proceedings under the 1988 Act or the 1994 Act, a person to whom the defendant is alleged to have made a gift which may be treated as realisable property of the defendant under the provisions of the relevant Act; or

(3) a company, where the prosecutor alleges that assets apparently belonging to the company are in reality those of the defendant.

5.3

However, an order should not normally be addressed –

(1) to a bank with whom a defendant has an account; or

(2) to the business name of a defendant who carries on an unincorporated business (such business not being a separate legal entity from the defendant).

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Restraint orders against businesses

6.

If an application for a restraint order is made against a company, partnership or individual apparently carrying on a legitimate business –

(1) the court will take into account the interests of the employees, creditors and customers of the business and, in the case of a company, any shareholders other than the defendant, before making an order which would or might prevent the business from being continued; and

(2) any restraint order made against that person will normally contain an exception enabling it to deal with its assets in the ordinary course of business.

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Duration of order made on application without notice – rules 4(2) and 27(2)

7.1

RSC Order 115 rules 4(2) and 27(2) provide that, unless the court otherwise directs, a restraint order made without notice shall have effect until a day which shall be fixed for a further hearing where all parties may attend (‘the return date’).

7.2

Where a return date is fixed, it will normally be no more than 14 days after the date of the order.

7.3

Where no return date is fixed, the court will always include in the order a provision giving the defendant or anyone affected by the order permission to apply to vary or discharge the order (see paragraph 14 of the sample form of order).

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SECTION II – APPOINTMENT OF RECEIVER

8.1

CPR Part 69, and the practice direction supplementing that Part, apply to the appointment of a receiver under the 1988, 1994 or 2000 Act, subject to the provisions of RSC Order 115 rule 8 and rule 23(e) where applicable.

8.2

In particular, CPR rule 69.7, and paragraph 9 of the practice direction supplementing Part 69, apply in relation to the remuneration of the receiver.

8.3

Where no confiscation or forfeiture order has been made –

(1) an application for the appointment of a receiver should not be made without notice, unless the application is urgent or there is some other good reason for not giving notice to the defendant; and

(2) if the application is made without notice, the prosecutor's written evidence should explain the reasons for doing so.

8.4

Where the court appoints a receiver on an application without notice in the circumstances set out in paragraph 8.3, the order will normally limit the receiver's powers to manage, deal with or sell property (other than with the defendant's consent) to the extent that is shown to be urgently necessary. If the receiver seeks further powers, he should apply on notice for further directions.

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