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Repeal section 41 (4) of the Proceeds of Crime Act to level the playing field and ease pressure on the public purse
Readers of the London Evening Standard will be familiar with the paper’s much-trumpeted campaign for changes to the criminal justice system, to “stop the Mr Bigs from milking legal aid”.
The route to achieving this is through proposed changes to the way criminal freezing orders (restraint orders) operate.
The culprit is section 41 (4) of the Proceeds of Crime Act 2002: “… an exception to a restraint order must not make provision for any legal expenses which (a) relate to an offence which falls within (5), and (b) are incurred by the defendant or by a recipient of a tainted gift.”
In short, a defendant cannot fund the defence of the matter for which they have been restrained. Worse, in Re S (Restraint Order)  it was held that the prohibition on legal expenses in section 41 (4) extends to “connected” proceedings, such that matters related to the offence were also excluded from funding. The court had no jurisdiction to release assets subject to restraint to fund representation relating to that order.
Subsequent cases tightened the belt still further, so the ban was absolute – even where the defendant had no representation or was not entitled to legal aid the restrained assets remained unavailable for legal expenses.
The result was a drained legal aid budget, failure to recover forecast amounts of restrained property and unnecessary reliance on public funding.
Repeal of section 41 (4) would remove the bar on legal expense and an exception allowing payment of reasonable legal fees, subject to notifying the source, would put restraint orders on a similar footing to civil freezing orders. The freeing up of funds to be available for legal costs could then be taken in to account in any means test.
There is, however, tension with the operation of legal aid in the Crown Court, the destination of serious cases and, generally, those that feature restraint orders; means testing in that court is only applied to determine the level of a contribution to defence costs. The system is not, unlike in the magistrates courts, ‘in or out’. Even where a defendant is liable to pay a contribution the representation order is not withdrawn on non-payment.
The approach is further hampered by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) which capped, to legal aid levels, the recovery of defence costs in the magistrates court and prevented it in Crown Court. In short, a defendant using legal aid in the Crown Court is rewarded with a full refund of his contribution to costs upon acquittal. A defendant who pays privately will not receive a penny of his costs back regardless of the outcome. Hardly a level playing field and a big incentive for Mr Big to look to the public purse.
Wholesale changes are required to relieve the burden on criminal legal aid and, as is apparent from LASPO’s enactment, a new mind-set. Many defendants subject to restraint would choose to privately fund their defence and this should be encouraged, not deterred. The alternative is neither viable nor sustainable.