The City of London Police have announced a pilot where they will use private law firms to seize and forfeit the assets of those suspected, but not proven, to be involved in cybercrime. It is likely these firms will instigate proceedings under the Proceeds of Crime Act 2002 and in some cases this will replace a criminal prosecution. This shift has been justified simply because it is quicker, that it returns the proceeds of crime much earlier.

Not only is it quicker but it is much easier. Why? Because not only does it lower the standard of proof required (on a balance of probabilities instead of being sure) but because fewer people access legal advice when facing such civil proceedings when compared to those being prosecuted and there follows a mismatch between the parties at court.
But if this leads to more criminals being targeted and their activities disrupted what is the problem? As ever when designing our criminal justice system we must consider what happens to the innocent person caught up in the system by error or mistake.

One of the reasons so few people instruct a solicitor to protect their rights when their assets are seized is because of the potential liability for costs. Where people use a solicitor and show their assets are not derived from crime they often have to bear the costs incurred. The courts are concerned not to penalise the state (or its agents) when they get it wrong in case it deters them from carrying out a function which, overall, is for the good of the public. This is based on an assumption that an occasional adverse costs decision would reduce the number of cases they bring. That is not necessarily a sound assumption to make, it is more likely to improve the internal scrutiny of the cases brought, enhancing quality.

What does this mean in practice? Well imagine you have had £5,000 seized by the state (be it the police, or under this pilot, a prominent City law firm). You know this money has not come from crime but your financial arrangements are complicated, say by irregular self-employment. Faced with documents drafted in technical language by intimidating City law firms you call a solicitor. This solicitor says she can help you but then lists all things you will need to do to succeed and then gives you an estimate of costs, say between £1,000 and £2,000. She then tells you that these costs are unlikely to be recoverable at all. She also reminds you that if you lose you will have to pay the costs of the state, again measured possibly in the thousands. Would you be willing to pay for legal representation in those circumstances? Gamble and lose: you lose your £5,000 and pay another £5,000 for the privilege. Win and you might get £3,000 back after you have paid your lawyers.

If people do not instruct a solicitor we enter a vicious cycle. To appear unrepresented the person risks failing to meet the case against them, failing to realise what needs to be done in preparation for the final hearing. And in those circumstances the innocent person might lose their money principally because of a disparity in the quality of litigation. This problem maybe compounded as we are told, under the City of London Police’s pilot, the firms they instruct will only be paid if they succeed. This puts greater strain on their decision making and increases the risk of pursuing the wrong people.

Devolving law enforcement to the private sector is questionable. But if it is to happen people need to be able to defend themselves my accessing specialist legal advice. The current costs rules are not fit for purpose. Those who successfully defend asset forfeiture proceedings must be able to recover their costs. Those with a good case will therefore not be dissuaded from instructing a solicitor and presenting it properly.

Mark Troman
Powell Spencer & Partners