Factual and Procedural Background
This judgment concerns one appeal and two conjoined applications for leave to appeal, with appeals to follow if leave is granted. The Bar Council and the Law Society submitted written observations in one matter, but the Crown Prosecution Service ("CPS") abandoned its application for leave to appeal, rendering those submissions unnecessary for consideration.
In the first case, the CPS applied for an adjournment, which was refused, and subsequently abandoned the leave to appeal application. The court granted formal permission retrospectively under the Criminal Procedure Rules.
The first case involved an individual ("Campbell") who pleaded guilty to money laundering. Issues arose regarding her representation in related confiscation proceedings. Despite a representation order, no suitably qualified advocate could be found due to inadequate remuneration under the graduated fee scheme. The court stayed the confiscation proceedings on the basis that proceeding without proper representation would be unfair.
The second case concerned an appellant ("McInerney") subject to a restraint order under the Proceeds of Crime Act 2002 ("POCA"). He sought to vary the order to allow payment of a contribution to the Legal Services Commission ("LSC") for public funding of legal expenses. The court refused the variation, and the appellant appealed.
The third case involved an application by a regulatory agency ("MHRA") for leave to appeal a decision refusing to vary a restraint order against an individual ("Carlton"). Carlton was unable to secure representation for confiscation proceedings due to the fee structure and restrained assets. The court granted leave but the appellant later abandoned the appeal.
Legal Issues Presented
- Whether an adjournment should be granted pending availability of adequately funded representation in confiscation proceedings.
- Whether a restraint order under section 41 of POCA can be varied to allow payment of contributions to the Legal Services Commission for legal aid funding.
- The interpretation of "reasonable living expenses" under section 41(3)(a) of POCA and whether contributions to the LSC fall within this category.
- Whether the court has jurisdiction to vary restraint orders to enable defendants to finance legal representation in confiscation proceedings.
Arguments of the Parties
Appellant's Arguments (McInerney)
- The appellant sought a variation of the restraint order to allow part of his reasonable living expenses to be used as a contribution to the LSC for legal aid funding.
- He argued that the assessment of income for contribution purposes should be nil due to the restraint order.
- His counsel agreed that the judge was correct to refuse the variation but hoped the court would assist with legal aid difficulties.
Respondent's Arguments (Financial Services Authority and Others)
- The respondent submitted that the judge was right to refuse the variation as section 41(4) of POCA prohibits legal expenses being paid from restrained assets.
- It was argued that contributions to the LSC are not "reasonable living expenses" and thus cannot be paid from the allowance.
- They submitted that the defendant is free to use the money allowed for living expenses as he wishes, but the court can impose conditions or reduce the allowance if it is used to pay legal expenses.
- It was further submitted that a contribution to the LSC constitutes legal expenses within the meaning of section 41(4).
- Regarding the MHRA case, it was argued that in exceptional circumstances the court may remove assets from the restraint order to enable legal representation, but the judge had no jurisdiction to vary the order in this way.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| S v The Commissioners of HM Customs and Excise [2004] EWCA Crim 2374 |
Legal expenses incurred in defending restraint proceedings relate to the offence for which the restraint order was made; public funding should be available to challenge restraint orders. |
The court relied on this precedent to affirm that legal expenses connected to restraint proceedings are covered by POCA and public funding should be available. |
| TDK Tape Distributor (UK) Ltd v Videochoice Ltd [1986] 1 WLR 141; [1986] 3 All ER 345 |
Interpretation of "ordinary living expenses" in freezing injunctions; legal expenses for serious criminal defence are not ordinary living expenses. |
The court applied this reasoning analogously to interpret "reasonable living expenses" under POCA, concluding legal contributions are not ordinary living expenses. |
| P [2008] EW Misc 2 (EWCC) |
Previous decision illustrating longstanding issues with remuneration under graduated fee schemes affecting representation in confiscation proceedings. |
The court cited this to show the problem of inadequate remuneration is not new and does not justify adjournments pending fee scheme changes. |
Court's Reasoning and Analysis
The court analysed the issues in light of the statutory provisions of POCA, particularly section 41, which governs restraint orders and exceptions for living and legal expenses. It distinguished between "reasonable living expenses" and "legal expenses," noting that section 41(4) prohibits exceptions for legal expenses relating to the offence for which the restraint order was made.
The court accepted submissions that the appellant could use money allowed for living expenses as he wished, but the court could impose conditions or reduce allowances if funds were used for legal expenses, to preserve the value of restrained assets as required by section 69.
Relying on the TDK case, the court interpreted "reasonable living expenses" analogously to "ordinary living expenses" in freezing injunctions, concluding that legal contributions, such as payments to the Legal Services Commission, are not ordinary living expenses.
The court rejected arguments that contributions to the LSC should be treated as living expenses or that Parliament intended otherwise without explicit provision in the statute. It held that contributions to the LSC constitute legal expenses and are therefore prohibited from being paid from restrained assets or allowances under the restraint order.
Regarding the refusal to adjourn proceedings pending changes to the graduated fee scheme, the court found that the problem of inadequate remuneration was longstanding and did not justify adjournment based on future improvements.
In the case concerning variation of restraint orders to enable payment for legal representation, the court acknowledged the difficulty but noted that the judge had no jurisdiction to vary the order in the manner sought, given the statutory restrictions.
Holding and Implications
The court DISMISSED the appeal by the appellant seeking variation of the restraint order to allow contributions to the Legal Services Commission from his reasonable living expenses.
The direct effect is that payments to the Legal Services Commission as contributions towards legal aid funding are not permissible under the current form of restraint orders and statutory framework. The court confirmed that legal expenses related to the offence are excluded from exceptions to restraint orders under section 41(4) of POCA.
The court also refused adjournments based on anticipated future changes to fee schemes and confirmed the limited jurisdiction of judges to vary restraint orders to permit funding of legal representation under these circumstances.
No new legal precedent was established beyond the court's application and clarification of existing statutory provisions and case law.