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BREACHING A RESTRAINT ORDER IS A CIVIL AFFAIR

Breaching a restraintOur portal editor, Jonathan Fisher QC, discusses the recent UK Supreme Court decision in R v O’Brien and the willingness it demonstrates of the senior appellate court to give effect to the restraint order procedure under the Proceeds of Crime Act 2002.

SPEED READ

The recent decision of R v O’Brien [2014] EWCA 2014 held that where contempt charges are brought for a failure to comply with a restraint order issued under section 41 of the Proceeds of Crime Act 2002, this will normally be considered a civil and not criminal contempt of court. As a result, pursuing such charges against a defendant extradited to the UK for a separate criminal offence will not violate the speciality rule in extradition law.

COMMENTARY

It is a widely accepted principle in extradition law that after a person has been extradited to a country to be put on trial for a certain offence, it is prohibited to try the person for another criminal offence not specified in the extradition warrant (‘the speciality principle’).

R v O’Brien [2014] EWCA 2014 concerned an investigation into an alleged large scale ‘boiler room’ fraud. As part of this investigation, the Common Sergeant sitting at the Central Criminal Court issued a restraint order against him under section 41 of the Proceeds of Crime Act 2002 (POCA) freezing his assets. However, the defendant, Mr O’Brien, ignored the order and fled to Chicago.

The Serious Fraud Office (SFO) sought and secured O’Brien’s extradition to the UK to pursue fraud charges against him. Once back in the UK, the SFO then sought to prosecute Mr O’Brien for charges of civil contempt of court, resulting from his breach of the earlier restraint order. O’Brien argued that the civil contempt could not be pursued for two reasons. First, he argued that the court had no power to deal with him for the earlier contempt, regardless of whether it constituted civil or criminal contempt. Secondly, he argued that the contempt should be classed as criminal, and therefore its prosecution blocked by the speciality principle in the Extradition Act 2003.

Both the Common Sergeant and the Court of Appeal rejected O’Brien’s arguments and the case was appealed to the Supreme Court which ultimately had to decide whether (1) breaching a restraint order issued under section 41 of POCA was a civil or criminal contempt, and (2) if the answer is that it is a civil contempt, whether the Extradition Act 2003 (s.151A) and/or the UK-US Extradition Treaty 2003 (a.18) preclude the court from pursuing such a case where the defendant was extradited for a different criminal offence.

Dealing with the first question, the Supreme Court found that POCA does not make it a criminal offence for a person to disobey a restraint order. However, it found that the Crown Court does have the power to treat such behaviour as a contempt of court, for which it may impose punishment under section 45 of the Senior Courts Act 1981. The Court embarked on a discussion of the distinction between civil and criminal contempt; a distinction that has long been recognised in English law (Home Office v Harman [1983] 1 AC 280), and one that has also been recognised in US law (Turner v Rogers 564 US 1 (2011)). The Supreme Court explained that the breach of a court order may result in imprisonment as a punishment for contempt of court, the primary purpose of the punishment is to make the original order effective. It found that contempt of this kind is not criminal and does not result in the acquisition of a criminal record.

The Court rejected O’Brien’s argument that because this order was obtained in the course of a criminal investigation, this rendered it a criminal contempt. According to the court, “it is fallacious to argue that because the order was made by a criminal court, rather than a civil court, disobedience to the order amounts to a crime ... The question whether contempt is criminal contempt does not depend on the nature of the court to which the contempt was displayed; it depends on the nature of the conduct”. Civil contempt of court is not confined to a civil court.

The Supreme Court carefully examined the Extradition Act 2003, its predecessor the Extradition Act 1989, the Council of Europe Framework Decision on European Arrest Warrants (2002/584/JHA), the UK-US Extradition Treaty 2003 and their intentions, language and relationship to each other. It was then concluded that neither the Extradition Act 2003 nor the UK-US Extradition Treaty 2003 prevented the prosecution of a person for an earlier civil contempt charge where he had been extradited for a criminal offence. O’Brien could therefore be punished lawfully for civil contempt of court.

This case is significant because it establishes in clear terms that breach of a section 41 POCA restraint order does not constitute a criminal matter. Secondly, it is interesting to note the willingness on the part of a senior appellate court to give effect to the restraint order regime under the Proceeds of Crime Act 2002 in the fight against international financial crime.

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OBTAINING A FREEZING ORDER
The views expressed in this article represent those of the author and not Bright Line Law.

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