Family

Proceeds of Crime Act 2002 part 7 after P v P

P v P (Proceeds of Crime Act) [2003] EWHC Fam 2260

In P v P (Proceeds of Crime Act) [2003] EWHC Fam 2260, Dame Elizabeth Butler-Sloss considered Proceeds of Crime Act 2002, part 7 and section 342 and family lawyers, though the case, in the end, with two issues (as defined by the president at [24]): when 'it is permitted to act in relation to an arrangement' (a point not argued before her); and when may a legal adviser tell others (including his/her client) when 'an authorised disclosure has been made' ('tipping off' in the terms of the Act).

The second issue was, in reality, the only one dealt with by her.

This judgment is not determinative of any issue.

It can only be guidance - albeit from an authoritative source - on important points of practice.

A jury might take a different view from the president were a solicitor to be prosecuted for tipping off.

The family lawyer, 'proceeds of crime' and money laundering

First, a few definitions: 'criminal property...

constitutes a person's benefit from criminal conduct' (section 340(3), which is conduct 'which constitutes an offence' in the UK or elsewhere (section 340(2)) (for example, tax evasion, DSS/DWP fraud).

A person becomes involved in 'money laundering' if he or she commits one or more of the offences (section 340(11)) of concealing, arranging the retention of, or using criminal property (sections 327-329).

The family lawyer, it is said, may be involved in money laundering, under the second of these (section 328(1)), if:

'He enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person'.

The offence is to be 'concerned in [the] arrangement' which the solicitors 'knows or suspects facilitates' etcetera.

The defence is to make an 'authorised disclosure' - in practice to the National Criminal Intelligence Service (NCIS).

It is not permitted to tell the client or others involved in the proceedings of the disclosure; for to do so may be an offence under section 333 (tipping off) or section 342 (prejudicing an investigation), subject to what was said by the president in P v P (especially at [57-66]).

Having made the disclosure, the solicitor awaits 'appropriate consent' (section 335) before continuing to act: seven working days ('notice period') if no refusal to act is given (section 335(3)); 31 days from refusal to act ('the moratorium') if refusal to act is received (section 335(4)).

The question in P v P was the extent to which a solicitor might inform others of his authorised disclosure during the notice and moratorium periods.

Disclosure after the notice period

As a matter of 'good practice (as opposed to statutory obligation)', said Dame Elizabeth (at [67]), NCIS should be given time to do its job.

She suggested that, at most, seven working days before a client is informed should enable solicitors to comply with obligations to client and 'opponent' alike.

Where consent to act is refused (triggering the 31-day moratorium: section 335(6)), the solicitor and NCIS should 'try to agree' on the information which can reasonably be disclosed during the moratorium period without harming the investigation.

In the absence of agreement, or in other urgent circumstances, 'the guidance of the court may be sought' ([67]).

Many questions remain after P v P, not least whether acting for a person in ancillary relief proceedings 'facilitates' an arrangement under section 328(1).

More guidance than the president was able to give is needed urgently by practitioners.

Refusal of DNA test stronger than presumption of paternity

Secretary of State for Work and Pensions v Jones (2003) The Times, 13 August, Dame Elizabeth Butler-Sloss, President

Mr Jones lived with, but was not married to, the mother of a child.

The mother was married to another man.

When Mr Jones and the mother separated, she applied for child support maintenance.

In the maintenance enquiry form (reply to her application), Mr Jones had been equivocal about paternity, but had not responded to a DNA test requirement.

Though the woman's husband would be presumed to be the father (Child Support Act 1991, section 26 Case A1), the Child Support Agency - rightly in view of what the mother said - applied to the magistrates' court for a declaration of parentage (section 55A of the Family Law Act 1986).

The application was dismissed because of the passage of time and the mother's marriage.

Dame Elizabeth declared the dismissal by the magistrates' to be wrong.

Clear guidance was to be found in such cases as Re A (Refusal of Blood Tests) [1994] 2 FLR 463, CA (the 'if he doesn't have to take the test, why should I?' case).

Section 23 of the Family Law Reform Act 1969 gave the court clear powers to draw inferences where a test was refused.

The magistrates' decision was set aside and a declaration substituted that Mr Jones was the father.

Respondent's application for decree absolute

Re G (Decree Absolute: Prejudice) [2002] EWHC 2834 (Fam), [2003] 1FLR 870, Mr Justice Bennett

A husband respondent's application for a decree nisi to be made absolute (section 9(2) of the Matrimonial Causes Act 1973) was opposed by the wife because, she said, she would lose her rights under the Inheritance (Provision for Family and Dependants) Act 1975; and she alleged non-disclosure in ancillary relief proceedings.

Even if this was proved, the husband's suggested departure from the country to frustrate her financial claims would not necessarily follow.

So said Mr Justice Bennett in Re G, though the husband might not be prejudiced by the delay, in the absence of good grounds from the wife to refuse a grant, then it should be granted.

Had she applied for the decree, it certainly would have been granted.

Outstanding ancillary relief proceedings were not a reason to delay grant.

Division of family capital in actual beneficial shares

Secretary of State for Work and Pensions v Hourigan [2003] EWCA Civ 1890, [2003] 1 WLR 608, CA

Ms Hourigan's case is a reminder that under income support law, where a claimant is 'beneficially entitled to any capital asset they shall be treated as if [they] were entitled in possession to the whole beneficial interest therein in an equal share' (regulation 52 of the Income Support (General) Amendment No 4 Regulations 1988); and this share of capital is treated as part of their capital for assessment purposes.

Ms Hourigan and her son owned their house as to five-sixths to him and the balance to her.

When ill-health forced her to move out, the Department for Work and Pensions assessed her as having a half-share on its interpretation of regulation 52.

This took her capital over 8,000, thus depriving her of benefit.

The tribunal agreed with the secretary of state, but the Commissioner of Social Security reinstated Ms Hourigan's benefit.

That was the correct solution, said the Court of Appeal: the scheme intended people to dip into capital rather than rely on benefits; but 'why should Parliament have expected people to dip into capital they did not in fact possess?' (per Lord Justice Brooke at [24]).

By David Burrows, David Burrows, Bristol