The Assets Recovery Agency (ARA) - which was launched last year with unprecedented powers to confiscate goods and cash - is seeking to strip its legal work from the Treasury Solicitors Department (TSD) and handle it in-house in a bid to save on its 300,000 annual legal bill.

The agency - created by the Proceeds of Crime Act 2002 - can freeze and seize assets, without notice, after convincing the court on a civil 'balance of probabilities' test that they were the result of unlawfulness.

The agency's annual report - published last week - said it is looking to bring litigation work in-house from the TSD, which acts in High Court actions on the ARA's civil recovery cases, acts as the address for service for the agency, and handles other ARA litigation.

A spokeswoman for the ARA said: 'It made sense originally, when setting up the ARA, as the legal team was small and we could rely on their [the Treasury Solicitors'] expertise.

But ultimately we have discovered that we would be duplicating work.

Therefore it makes more sense for us to do it ourselves.

So the plan is to deal with cases ourselves and to gradually lessen the ARA's dependency on the Treasury Solicitors.'

She said the TSD - which costs the ARA between 22,000 and 25,000 each month in legal fees - would continue to work on employment issues and certain complex High Court actions for the ARA.

The news comes on the back of a disappointing first year for the ARA, which aimed to institute 35 legal actions to disrupt criminal enterprises last year, but only managed 24.

The annual report said the shortfall was mainly the result of the longer than expected time it has taken to progress civil recovery claims through the courts.

The ARA currently has 14 legal staff with two more about to join.

The spokeswoman said: 'Depending how the budget goes, we will continue to grow [the legal department] in accordance with our needs.'

Jeremy Fleming