Supreme Court revises confiscation order via A1P1

_41773060_mtic_carousel416x302R v Ahmad and others [2014] UKSC 36, 18 June 2014 – read judgment

A bit of a familiar refrain in which A1P1, the right to property, comes in and stops an order being made which would otherwise be lawful under statute: see my recent post here on the Eastenders case.

The case concerns confiscation proceedings following the conviction of two sets of defendants for carousel fraud.  A carousel fraud involves setting up a whole series of paper transactions to generate an apparent entitlement to reclaim VAT from the tax man: see the pic for an example. The VAT is repaid, at which point the money, and the fraudsters, disappear into the dust. But in these cases, they were found, prosecuted and confiscation orders made against the individuals to try and get the money back.

In the first case, the Ahmad defendants ran a company MST, and took £12.6m (£16.1m uprated for inflation) off the taxman. In the second, the Fields defendants got £1.6m (including inflation) via their company, MDL.

In each case, the order was made in those sums against each individual defendant. So each Ahmad defendant was ordered to pay £16.1m, even if some of that £16.1m was thereafter repaid by another defendant. It was this element of the order which the Supreme Court revised.

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Seizure of worker’s wages breached Convention right – Strasbourg

proceeds-of-crimePaulet v United Kingdom Paulet (application no. 6219/08) – read judgment

The Strasbourg Court has declared, by five votes to one, that the UK authorities had acted unlawfully by seizing the wages of an Ivorian worker who used a false passport to gain employment. The majority ruled that the UK courts should have balanced individual property rights against interests of the general public.

This case on the confiscation of the proceeds of crime raises many difficult legal questions such as the nature of the link between the crime and the proceeds and the distribution of the burden of proof in establishing this link. Mr Paulet complained that the confiscation order against him had been disproportionate as it amounted to the confiscation of his entire savings over nearly four years of genuine work, without any distinction being made between his case and those involving more serious criminal offences such as drug trafficking or organised crime. The Court found that the UK courts’ scope of review of Mr Paulet’s case had been too narrow. The majority objected to the fact that the domestic courts had simply found that the confiscation order against Mr Paulet had been in the public interest, without balancing that conclusion against his right to peaceful enjoyment of his possessions as required under the European Convention. Continue reading

Eastenders in Supreme Court: A1P1 filling in the gaps


EastEnders_TitleBarnes v. The Eastenders Group [2014] UKSC 26 read judgment

Not Albert Square, but it could be. The Crown Prosecution Service suspect two individuals of a massive duty/VAT fraud in their cash and carry businesses. The CPS go to the Crown Court (in the absence of the individuals) and get an order to appoint a receiver (i.e. a paid manager) to run the affairs of companies (Eastenders) in which the individuals are involved, as well as a restraint order against the individuals. Both receivership and restraint orders are set aside some months later by the Court of Appeal, on the basis that the HMRC investigator’s statements were largely “broad and unsupported assertions”. Problem: by then the receiver had run up £772,547 in fees.

Simple issue. Who bears those fees? The receiver, the CPS or the companies against whom the order was made? And A1P1 (the right to possessions) made the difference.

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Consultation – backing no horses, and the importance of interim relief

_69067404_daycentreprotestLH, R (o.t.a) v. Shropshire Council  [2014] EWCA 404 (Civ), Court of Appeal, 4 April 2014  - read judgment

Good advertisement for the flexibility of the common law, this case. This is because the duty to consult owed by a public body extends into all reaches of public law, from the regulation of a metal trading company (see my recent post here) to care centres and residential homes. Indeed it was in the context of residential home closures that the modern law got worked out. In the 1992 case of  ex parte Baker there had been a draft community care plan which had made no reference to the closure of individual homes, and which was followed up by a bolt from the blue – residents of one home only had 5 days’ notice that their home was to close.  

In none of these cases is there a statutory duty to consult – it is an aspect of common law fairness. 

The LH case concerns the closure of an adult care day centre. The question in LH was how to apply the principles in Baker to a rather more nuanced consultation approach, where closure of day centres in general was raised in consultation, but the closure of the specific day centre (Hartleys) was not.

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Backing just one horse in a consultation process can be unfair


Aluminum-Warehouse21United Company Rusal Plc (R, o.t.a of) v. London Metal Exchange Trust  [2014] EWHC 890 (Admin), Phillips J, 27 March 2014  - read 
judgment

Public law principles allow you to challenge a decision of a public authority if the consultation process preceding it was unfair. Unfairness comes in many shapes and sizes, but the commonest one alleged is that it was not carried out at the formative stage. The authority had already made up enough of its mind so the consultation process ceased to mean anything  – it was just going through the motions.

The law is equally clear that an authority does not have to consult on every conceivable option. Indeed it can just consult on its preferred option. 

But this decision shows that if it does so it has to be wary, because on the particular facts that may be unfair.

Enter our cast, challenger in the form of Rusal (proprietor one Oleg Deripaska), and the defendant, the London Metal Exchange.

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Trains, pains and allegations: fairness in medical misconduct cases – Richard Booth QC

785px-Doctors_stethoscope_1West London Mental Health NHS Trust (Respondent) v Chhabra (Appellant) [2013] UKSC 80 – read judgment

It is not unknown for lawyers or doctors to speak on a mobile phone about confidential details of a case while travelling by train. Some of you may even have left case papers out on your seat or table while you hunt down a bacon baguette from the Travelling Chef (formerly known as “Toastie Geoff” prior to rebranding). If so, read on, for this is a cautionary tale…

This appeal by Dr Chhabra was concerned with the roles of the case investigator and the case manager when handling concerns about a doctor’s performance under the disciplinary procedures introduced over eight years ago for doctors and dentists in the National Health Service. The national policy framework is known as ‘Maintaining High Professional Standards in the Modern NHS’ (MHPS), which the Trust had implemented through its own policies.

The factual summary below is derived from the Supreme Court Press Summary

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CJEU sets itself against secret “nod and a wink” justice

Fulmen & Mahmoudian v. Council of the European Union,28 November 2013,  read judgment

I posted last year on a decision by the General Court in Luxembourg, in which Fulmen successfully challenged sanctions taken against it as part of EU policy to apply pressure on Iran to end nuclear proliferation.

 Fulmen was said to have supplied electrical equipment on the Qom/Fordoo nuclear site and Mr Mahmoudian was said to be a director of Fulmen. Hence all of their assets were frozen by the EU.

The CJEU has now roundly dismissed the appeal by the EU Council from the ruling of the General Court. The sanctions order has been annulled – over 3 years after it was made. The Council has been told that if it wants to uphold such orders, it must adduce evidence to the Court, however sensitive the subject matter, and even if not all of that evidence is passed on to those affected.

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