Recovery Orders
An enforcement authority can apply to the High Court for a recovery order against anyone they believe holds recoverable property (i.e. property obtained through unlawful conduct). These proceedings are commenced by service of a claim form and particulars of claim, in the ordinary way.
If the High Court is satisfied that property is recoverable it must make a recovery order and vest the property in the trustee for civil recovery (the person appointed by the court to give effect to the recovery order) unless it would not be just and equitable to do so.
The High Court cannot make a recovery order in respect of property outside of the UK or outside the relevant part of the UK unless there is sufficient connection between the case and the UK or relevant part of the UK.
Financial threshold
An enforcement authority cannot start proceedings for a recovery order unless the authority reasonable believes that the aggregate value of the recoverable property is £10,000 or more. The financial threshold applies equally to applications for property freezing order and interim receiving orders.
Limitation
A 12 year limitation period applies to civil recovery proceedings, subject to exceptions.
Receivers
Prior to the commencement of proceedings, an enforcement authority can apply for an interim receiving order, to appoint a nominated receiver to detain, preserve and take custody of property pending the outcome of the recovery order application. The High Court can make exclusions in relation to interim receiving orders in relation to reasonable living, business and legal expenses can be excluded.
Following the making of a recovery order, an enforcement authority can apply for a nominated receiver to manage the property.
Applications for interim or final receiving orders can be made without giving notice, if giving notice might prejudice their ability to obtain a recovery order.
Property Freezing Orders
An enforcement authority can apply for a property freezing order to prohibit any dealings with the property pending the outcome of the recovery order application and can do so without giving notice, if giving notice might prejudice their ability to obtain a recovery order.
The High Court can, at any time, vary or set aside a property freezing order.
The High Court can, to avoid undue prejudice, make exclusions from property freezing orders, including excluding property and/or prohibitions on dealing with property. Such exclusions may include reasonable living, business and legal expenses.
Applications for property freezing orders can be made without giving notice, if giving notice might prejudice their ability to obtain a recovery order.
Associated and joint property
Specific protections are afforded to third parties (i.e. holders of associated and/or joint property).
The High Court can, as an alternative to ordering recovery, order payment to be made to third parties and can order vesting, creation, severing and extinguishing of rights to give effect to its order. The High Court can also determine reductions for losses sustained as a result of freezing and/or receiving orders.
Pension schemes
A recovery order in relation to rights under a pension scheme will require the trustees or managers of the pension scheme to pay an amount equal in value of those rights to the trustee for civil recovery. A recovery order will override the provisions of the pension scheme in the event of conflict.
Exemptions
Any person who claims that property alleged to be recoverable property, or any part of it, belongs to him (for example, a victim of theft) can apply to the High Court for a declaration of ownership. There are other exemptions, including for the protection of regulators and insolvency practitioners.
Consent Orders
The High Court can stay proceedings on terms agreed between the parties (and the trustees or managers of any pension scheme, as appropriate). A consent order can make provision for items of property to cease to be recoverable and will override the provisions of the pension scheme in the event of conflict.
Enforcement and evidence outside the UK
If certain conditions are met, an enforcement authority, receiver or trustee for civil recovery can send a request for assistance to the Secretary of State with a view to it being forwarded to the government of a receiving country to secure, manage and/or dispose of the property.
If certain conditions are met, an interim receiver or a High Court judge can request assistance if they think there is relevant evidence in a country outside the UK. These requests can be sent directly to a court, tribunal, government or authority in the country concerned or via the Secretary of State.
Application of proceeds
The proceeds are first applied to any payment due to third parties in relation to associated and joint property, then to legal expenses, then to cover the costs of any insolvency practitioner, with the balance being paid to the enforcement authority (who will cover the cost of the trustee or any interim receiver).
Compensation for losses
If the High Court does not decide that the property is recoverable or associated property, the holder of the property can apply to the court for compensation. A 3 month time limit applies to applications for compensation.
How our experts can help
We can deploy a multi-disciplinary team of expert lawyers to oppose applications for recovery orders, property freezing orders and interim receiving orders and to advance third party interests, negotiate settlements and pursue compensation.
We benefit from a wealth of in-house expertise and experience in civil recovery proceedings and enjoy enduring relationships with leading consultants, including specialist PoCA barristers, forensic accountants and other industry experts.
Free Initial Discussion
If your property is the subject of a civil recovery application, whether for a recovery order, a property freezing order or for appointment of a receiver you should contact us as soon as possible.
Contact our lawyers by calling us on 0203 987 0222 or complete our enquiry form and one of our team will call you back. We can assist you wherever you are based.
