Factual and Procedural Background
The petitioner, a non-profit organization based in New York and engaged in public interest activism, sought judicial review of the Scottish Ministers' policy concerning Unexplained Wealth Orders (UWOs). UWOs, introduced into UK law in 2018 under the Proceeds of Crime Act 2002 (POCA) as amended by the Criminal Finances Act 2017, empower the Court of Session to require persons holding property to explain the source of their wealth under certain conditions. The petitioner’s concern centered on the alleged unlawful delegation by the Scottish Ministers of responsibility for deciding whether to apply for UWOs, particularly in relation to property in Scotland said to be beneficially owned by a politically exposed person (PEP), specifically a former United States President.
The petitioner challenged the Scottish Ministers’ approach, including their "neither confirm nor deny" policy regarding whether UWOs were being considered or applied for, and the designation of the Lord Advocate as the Minister responsible for such decisions. After preliminary hearings, the court found the petition had real prospects of success and allowed an extension of time for the petition to proceed. The petitioner sought declarators clarifying the responsibilities and duties of the Scottish Ministers and the Lord Advocate concerning UWOs, and alleged unlawful failure to seek a UWO in the specific case of the PEP's assets in Scotland.
Legal Issues Presented
- Whether the sole responsibility for determining whether to apply for an Unexplained Wealth Order rests with the Scottish Ministers collectively, including the Lord Advocate.
- Whether the Lord Advocate’s involvement in decisions concerning UWOs is limited to acting as one of the Scottish Ministers and does not extend to the exercise of her retained functions.
- Whether the Scottish Ministers may delegate responsibility for deciding to apply for a UWO to any other person, body, or department.
- Whether the Scottish Ministers have a duty to use their best endeavours to combat money laundering and corruption, particularly by politically exposed persons.
- Whether the Scottish Ministers have a duty to seek a UWO whenever the statutory requirements are met, specifically in relation to the PEP’s assets in Scotland.
- Whether the Scottish Ministers’ "neither confirm nor deny" policy regarding the consideration or application of UWOs is lawful and justified.
Arguments of the Parties
Petitioner's Arguments
- The Lord Advocate cannot lawfully be designated as the Minister responsible for deciding on UWOs because her retained functions require independent exercise, precluding her from holding portfolio responsibility for such decisions.
- The statutory power to seek UWOs is, in fact, a duty to be exercised whenever the statutory conditions are met, particularly to meet international obligations to combat money laundering and corruption.
- The Scottish Ministers’ "neither confirm nor deny" policy obstructs transparency and prevents judicial scrutiny of whether the Ministers have properly exercised their powers concerning the PEP’s assets.
- The Ministers have unlawfully failed to seek a UWO in respect of the PEP’s Scottish assets despite prima facie evidence that statutory conditions are met.
- The Ministers may not delegate their responsibility for deciding whether to apply for a UWO to any other person or body.
Respondents' Arguments
- The responsibility for decisions concerning UWOs rests collectively with the Scottish Ministers, including the Lord Advocate, who may exercise those functions as a member of the Scottish Government.
- There is no legal basis to exclude the Lord Advocate from portfolio responsibility for UWOs; section 396D of POCA does not imply such a restriction.
- The power to seek UWOs is a discretionary power, not a mandatory duty, and the Ministers retain broad discretion on whether and when to apply for such orders.
- The Ministers’ "neither confirm nor deny" policy is justified on operational grounds, including preventing asset dissipation, avoiding tipping off, and protecting reputations, especially given the ex parte nature of UWO applications.
- The petitioner’s declarators are either not in dispute, lack practical effect, or have no proper foundation in fact or law and should be refused.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Wightman v Secretary of State for Exiting the EU [2018] CSIH 62, 2019 SC 111 |
Limits on declarators: courts should not decide hypothetical or academic questions; declarators must have a practical effect and be designed to achieve a practical result. |
Referenced to refuse declarators that were not in dispute or lacked practical effect. |
| HMA v Wright [2007] HCJ 5, 2007 SCCR 258 |
Clarification that the Lord Advocate exercises retained functions in confiscation proceedings under POCA Part 3, acting independently as head of the system of criminal prosecution. |
Used to distinguish the Lord Advocate’s retained functions from functions exercised as a Scottish Minister. |
| Scottish Ministers v Doig [2009] CSIH 34, 2009 SC 474 |
Lord Advocate’s involvement in POCA Part 5 civil recovery proceedings is as a Scottish Minister, not as head of prosecution. |
Supported the argument that the Lord Advocate may exercise POCA Part 8 functions as a Scottish Minister. |
| Kapri v Lord Advocate [2013] UKSC 48, 2013 SC (UKSC) 311 |
Separation of functions between Scottish Ministers and Lord Advocate in extradition proceedings; Lord Advocate should not decide ultimate extradition decision. |
Petitioner relied on this to argue against Lord Advocate’s portfolio responsibility for UWOs; court found it inapplicable due to different statutory context. |
| RM v Scottish Ministers [2012] UKSC 58, 2013 SC (UKSC) 139 |
Statutory powers may amount to duties; interpretation should aim to give effect to Parliament’s intention to achieve effective results. |
Petitioner used this to argue that seeking UWOs is a duty; court considered but rejected that argument. |
| R (King) v Secretary of State for Justice [2015] UKSC 54, [2016] AC 384 |
Performance of statutory ministerial functions by particular officials may be inconsistent with Parliament’s intention or irrational. |
Petitioner cited to argue Lord Advocate’s portfolio responsibility is inconsistent with statutory scheme; court rejected this. |
| Somerville v Scottish Ministers [2007] UKHL 44, 2008 SC (HL) 45 |
Public interest immunity and balancing competing public interests in disclosure of information. |
Referenced regarding justification for the Ministers’ "neither confirm nor deny" policy and the court’s approach to confidentiality and disclosure. |
| Secretary of State for the Home Department v Mohamed [2014] EWCA Civ 559, [2014] 1 WLR 4240 |
Requirement for government to justify "neither confirm nor deny" policies in the context of public law and open justice. |
Referenced to evaluate the Ministers’ justification for their policy on UWOs. |
| Moohan v Lord Advocate [2014] UKSC 67, 2015 SC (UKSC) 1 |
Judges may consider international law binding on the UK when interpreting domestic statutes. |
Considered in relation to the United Kingdom’s international obligations under the Trade and Cooperation Agreement (TCA). |
| H v Lord Advocate [2012] UKSC 24, 2012 SC (UKSC) 308 |
Strong presumption against implied repeal of constitutional statutes such as the Scotland Act 1998. |
Applied to reject any implied repeal of section 52(3) of the Scotland Act by POCA provisions. |
| Keatings v Advocate General for Scotland [2021] CSIH 25, 2021 SLT 729 |
Limits on declarators and the need for practical effect and live dispute. |
Used to refuse declarators that did not resolve live disputes. |
| Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 |
Ministerial functions may be exercised by officials or delegated ministers under general direction without formal delegation. |
Applied to explain how functions conferred on Scottish Ministers may be exercised by individual Ministers or civil servants. |
| R v Adams [2020] UKSC 19, [2020] 1 WLR 2077 |
Interpretation of statutory powers and duties of Ministers. |
Referenced to reject the petitioner’s claim of a duty to apply for UWOs. |
Court's Reasoning and Analysis
The court undertook a detailed statutory interpretation of the relevant provisions of POCA and the Scotland Act 1998, focusing particularly on the division of functions between the Scottish Ministers collectively and the Lord Advocate as a member of the Scottish Government with certain retained functions requiring independent exercise.
It found no implicit restriction in POCA section 396D or elsewhere that would exclude the Lord Advocate from being designated as the Minister responsible for seeking UWOs. The court reasoned that decisions taken by the Lord Advocate in this capacity are decisions of the Ministers collectively, attracting collective legal and political responsibility. The suggested "institutional schizophrenia" argument—that the Lord Advocate could not act in both capacities without conflict—was rejected because the statute did not require a separation of information or functions in the manner suggested.
The court also addressed the petitioner’s argument that the power to seek UWOs is a duty, grounded in international obligations under the Trade and Cooperation Agreement (TCA) and related international standards. It held that the statutory power to seek UWOs remains discretionary and is not transformed into a mandatory duty by reference to international law. The court emphasized that the TCA provisions relied upon relate primarily to the financial services sector and do not impose specific obligations to seek UWOs in every case where statutory conditions are met.
Regarding the Ministers’ "neither confirm nor deny" policy, the court recognized the policy’s operational justifications, including avoiding asset dissipation, preventing tipping off, and protecting reputations, especially given the ex parte nature of UWO applications. It acknowledged the petitioner’s concerns about transparency but found no legal basis to compel disclosure or to reject the policy in the context of this case.
The court also clarified the limits of declaratory relief, refusing declarators that were not in dispute, lacked practical effect, or mischaracterized the legal position. It noted the petitioner’s ability to seek further disclosure through court processes if relevant material were held by the Ministers.
Finally, the court declined to consider the merits of whether the statutory conditions for a UWO were met in the specific case of the PEP’s Scottish assets, as the legal arguments concerning the Ministers’ powers and duties were dispositive of the petition.
Holding and Implications
The petitioner's pleas in law are repelled, the respondents' second plea in law is sustained, and the substantive prayers of the petition are refused.
The court held that:
- The Lord Advocate may lawfully be designated as the Scottish Minister responsible for seeking UWOs and may exercise those functions as a member of the Scottish Government, subject to collective responsibility.
- The statutory power to apply for UWOs under POCA is discretionary and does not impose a mandatory duty on the Scottish Ministers to apply whenever the statutory conditions are met.
- The Scottish Ministers’ "neither confirm nor deny" policy regarding consideration or application of UWOs is lawful and justified on operational grounds.
- The declarators sought by the petitioner that misstate or exceed the legal position are refused, particularly those asserting non-delegation or mandatory duties.
The direct effect is that the Scottish Ministers retain discretion in applying for UWOs, including in relation to politically exposed persons, and that the Lord Advocate’s role as a Minister with portfolio responsibility for the Civil Recovery Unit is lawful. No new legal precedent altering the established division of functions or the discretionary nature of UWOs was created by this decision.