Civil recovery is a High Court civil action – as opposed to a criminal action - brought under Part 5 of the Proceeds of Crime Act, where the authorities seek to seize the assets of a company or an individual that they believe to be the proceeds of crime.
It is increasingly popular with enforcement and prosecution agencies. This is due to legislation introduced in the last two decades that has given the authorities new ways in which to target assets and because there does not even have to be a criminal charge or conviction for the assets to be seized.
Civil recovery proceedings can be brought by UK authorities against assets anywhere in the world if the assets are under UK jurisdiction. Cases have established that civil recovery can be an alternative if a case is not thought suitable for prosecution and that such proceedings can be brought against a corporate or individual that had no direct involvement in wrongdoing but benefited from it.
Any individual or organisation facing such action has only one realistic course of action: seeking advice from those with expertise in this challenging and highly-specialised area of law.
As a firm that was the first to take civil recovery cases to the likes of the European Court of Human Rights and the Supreme Court, we have received the highest ranking in national and international legal guides. We have been contesting POCA cases since the days when the Assets Recovery Agency and then the Serious Organised Crime Agency were bringing civil recovery actions under POCA. Their successor, the National Crime Agency (NCA), is just one of a number of authorities, including the Serious Fraud Office (SFO) and Financial Conduct Authority (FCA), which can use civil recovery to target assets.
Chambers and Partners, one of the most prestigious international legal guides, recognises Rahman Ravelli as one of the elite firms in this specialised, demanding area of law. It names our solicitors as being among the very best in the UK when it comes to acting intelligently and forcefully to defend our clients’ assets in the face of POCA actions.
It was the Proceeds of Crime Act 2002 (POCA) that removed the need for there to be a conviction in order for the authorities to confiscate assets that they believed were obtained through illegal activity. POCA, particularly Part 5 of the Act, allows the authorities to use civil recovery powers to take the assets simply by showing that on the balance of probabilities those assets are the proceeds of crime.
The Criminal Finances Act 2017 introduced unexplained wealth orders (UWOs), which we explain in detail elsewhere and account freezing orders.
A UWO enables the authorities to compel a respondent to explain how they acquired assets. If the respondent cannot give what is considered to be an adequate explanation for how they came to obtain the assets legally then the assets can be considered recoverable property and proceedings can be initiated for them to be seized under POCA. The account freezing order process gives agencies the ability to freeze bank and building society accounts that are suspected of holding wealth that has a link to criminality.
Both are, as yet, new and little-used weapons. But they are starting to be used - and are just the latest indicator of how civil recovery can be used to target assets.
Civil recovery is a statutory mechanism under Part 5 of the Proceeds of Crime Act 2002 (POCA) that allows enforcement authorities — including the National Crime Agency (NCA), HMRC, the SFO, and the FCA — to seek recovery of property in the High Court that is, or represents, the proceeds of unlawful conduct. Crucially, civil recovery does not require a criminal conviction and proceeds on the civil standard of proof (balance of probabilities). It enables authorities to recover assets even where a criminal prosecution has failed, cannot be brought, or has not been pursued.
Civil recovery proceedings under Part 5 of POCA can be brought by the Director of the NCA, the Director of the SFO, HMRC, the FCA, and the Director of Public Prosecutions. The relevant enforcement authority applies to the High Court for a civil recovery order in respect of property that it believes is recoverable property — meaning property that constitutes or represents a benefit from unlawful conduct.
Recoverable property under POCA is property that constitutes the benefit of unlawful conduct, or property obtained by or in return for unlawful conduct. It can be traced through a succession of transactions — so that if stolen money is used to purchase a house, the house itself can be recoverable property. Property can also be recoverable even if it has been mixed with legitimately obtained property, though the court can only recover a proportionate share reflecting the criminal element.
A confiscation order under Part 2 of POCA is made by the Crown Court following a criminal conviction and requires the defendant to pay a sum of money representing their benefit from crime. Civil recovery under Part 5 is pursued in the High Court and does not require a conviction — it targets the property itself rather than requiring a personal payment order against the defendant. Both mechanisms can be pursued, and they are not mutually exclusive where a criminal investigation runs alongside civil recovery proceedings.
Yes. A civil recovery order can be sought in respect of recoverable property held by a person who was not themselves involved in the unlawful conduct, provided that person received the property knowing or suspecting it was recoverable. However, there are protections for innocent third parties who acquired the property in good faith and without notice that it was recoverable, who may have a defence to civil recovery.
An Interim Receiving Order (IRO) is a court order made at the outset of civil recovery proceedings that appoints an interim receiver to take control of, manage, and investigate the property subject to the claim while proceedings are ongoing. The interim receiver has wide powers to gather information about the property and its history. An IRO is a powerful interim step and may be obtained without notice to the person whose property is affected. Challenging an IRO or managing its implications requires specialist legal advice.
English courts have jurisdiction to make civil recovery orders in respect of property located in England and Wales. For overseas property, enforcement authorities may need to pursue proceedings in the relevant overseas jurisdiction, or to seek the cooperation of overseas counterparts. However, the English courts' approach to identifying and tracing assets is wide-ranging, and freezing orders and asset disclosure orders can be obtained in support of civil recovery proceedings to prevent the dissipation of overseas assets before they can be recovered.
Civil recovery proceedings under POCA are technically demanding, involve extensive forensic investigation of the provenance of assets, and can result in the permanent loss of substantial property. The lower standard of proof compared to criminal proceedings means that the enforcement authority does not need to establish criminal conduct beyond reasonable doubt. Effective defence requires detailed analysis of the evidential basis for the claim, forensic examination of asset histories, and skilled advocacy before the High Court. Specialist solicitors in this field have the combination of POCA expertise and civil litigation experience needed to mount the most effective response.
