Later in 2025, the Crown Court varied the terms of the restraint order (which had remained active). The new terms required the client, in various ways, to account for the properties abroad. She informed the CPS that she was struggling to locate the proceeds. The CPS wrote to her asserting their disbelief in her account. This was despite the client providing extensive evidence of the efforts she had gone to.
In response, the CPS applied to activate the default term in the confiscation order. This was despite it being the first attempt at enforcement. The activation of a default term is a measure of last resort. In R (on the application of O’Connell) v Westminster Magistrates’ Court [2017] EWHC 3120 (Admin), [2017] All ER (D) 31 (Dec), the High Court held that a court cannot activate the default term unless:
MCA 1980, s 82(4)
• it is satisfied that the default is due to the offender’s wilful refusal or culpable neglect, and
• it has considered or tried all other methods of enforcing payment of the sum and it appears to the court that they are inappropriate or unsuccessful.
The evidential hurdle to demonstrate wilful refusal or culpable neglect is not that high. A defendant must do more than simply not be obstructive to others’ efforts to recover their money and their efforts must appear genuine.
At the hearing, the Crown disputed that defendant’s attempts to locate the funds were genuine. They relied on the assertion that the defendant had not acted until she was required to by the confiscation order. Isotta drew the court’s attention to the fact that the client had been in a Category A prison in the time between the sale of the properties and the order being imposed.
Isotta reminded the court that the activation of a default term should not be a form of punishment; it is a means of enforcement (R (O’Connell) v Westminster Magistrates’ Court). The court had several other options in dealing with her client before sending her to prison.
In their ruling, the magistrates stated that they could not find ‘wilful refusal’ but had been troubled by ‘culpable neglect’. They were concerned that the properties had been sold whilst there was a restraint order in place, and that the defendant had waited three years to locate the proceeds. Isotta submitted that the court should be concerned primarily with the period following the confiscation order. Since its imposition, the defendant had been active in tracing the funds. If the magistrates could rule out ‘wilful refusal’, then they must be tacitly accepting that the efforts were genuine. If so, then the defendant had clearly done far more than not being ‘obstructive’.
Although the magistrates ruled in favour of the defendant, the court directed that she provide further evidence of her efforts at a hearing scheduled later in 2026. In the meantime however, the client can apply to the Crown Court to vary the confiscation order. She can attempt to prove, for example (on the balance of probabilities), that the funds have become irrecoverable (Houssam Ali [2002] EWCA Civ 1450 and ask the court to substitute an amount that it thinks just (section 23 POCA 2002).
Isotta was instructed by Jennifer Richardson of Blackfords LLP.
