Civil Recovery: money frozen under Proceeds of Crime Act can be used to pay for defence

Solicitors will be able to use clients' frozen assets to pay defence costs in civil recovery proceedings under regulations that come into force in January.


Under the new rules - which will save £3 million from the legal aid budget - assets frozen under the Proceeds of Crime Act 2002 (POCA) may be used to fund a 'reasonable defence' against cases brought by the Assets Recovery Agency.


However, the regulations guard against any attempt to 'frustrate proceedings' by funding a 'champagne defence' that would spend all the assets on legal fees. The assets may only be used to pay for legal work that has been pre-agreed by the court, and the hourly rate which defence lawyers may charge will be limited.


Robin Booth, chairman of the Law Society's money laundering taskforce, said: 'Restrictions in POCA have caused a lot of difficulty, and [this change] is welcome. We will need to look closely at the small print, because, in particular, we need to see who has control over expenditure on fees.


'If it is the court, that is preferable to one party to the proceedings, for example the Assets Recovery Agency, having control. In criminal proceedings, we have had a situation where the prosecution - for example Revenue & Customs - was effectively exercising control over expenditure on criminal defence. It seems to me that that is wrong in principle.'


Law Society President Kevin Martin said: 'People with frozen assets should be able to use that money to pay for a reasonable level of legal expenses. The Law Society put forward this idea and we hope it will lead to an effective redistribution of the limited legal aid budget.'