Introduction
Cash forfeiture powers allow authorities to deprive individuals of cash if it can be demonstrated that the cash is recoverable property or intended for use in unlawful conduct. While these cases take place in the magistrates’ court they are civil proceedings.
Legal aid is not available for such cases. Individuals facing such proceedings must fund their own litigation. In most civil cases it would be expected that “costs follow the event.” In cash forfeiture cases this is not the case.
Cash Forfeiture Cost Order Principles
The magistrates’ court has a discretionary power to grant costs. The principles to be applied to cost orders were considered in R (Perinpanathan) v City of Westminster Magistrates’ Court [2010] EWCA Civ 40.
- The starting point for the court in relation to costs is that there should be no order for costs provided that the public authority has acted reasonably and properly;
- In making that assessment the courts should not apply hindsight or set an exacting standard.
- There may, however, be circumstances in which it is justifiable to make an order as to costs in particular where an individual would suffer substantial hardship if a costs order were not made.
These principles apply even when an individual successfully resists an application.
Bennett v Merseyside Police [2018] EWHC 3591 (Admin)
The brief facts of the case in Bennet (“AB”) were that:
- AB was found at a property that had been used as a cannabis farm.
- A search of AB's house found £44,000 in cash which was recovered from a safe.
- During proceedings AB provided an accountant report showing the cash was generating by a legitimate business.
- Following a review of this report, and further documents requested from AB by the police the forfeiture was not proceeded with.
- An application for costs made by AB’s lawyers was rejected.
Does a public authority have to actively investigate to avoid a costs order?
In an appeal by way of case stated the applicant asked the High Court whether a public authority was required to undertake some “active investigation” into the origin of the cash.
It was argued that it was unreasonable for the police to simply leave an individual to demonstrate an explanation of how he had come by the cash.
Lord Justice Laggat disagreed stating there was no principle requiring an “active investigation.” In the particular facts of this case the court found the circumstances of the seizure, on any view, provided reasonable grounds for the police to pursue the application.
Further a 6 month delay between the service of the accountant report and the police formally not proceeding was not unreasonable. This was in light of the request by the police for further documents that, the court found, the police had reasonably requested.
How should “hardship” be considered in cost applications?
Laggat LJ went on to observe that when hardship is an argument being advanced as grounds for costs, it matters not if the phrasing applied is “undue hardship”, “substantial financial hardship” or “financial prejudice.” The point was that in cases brought by a public authority financial prejudice ordinarily involved in litigation would not generally justify an order for costs. Something over and above that had to be demonstrated by the individual to be successful.
Conclusion
This case is further confirmation that individuals will face difficulty in recovering their costs in cash forfeiture cases, even when authorities withdraw their application before a final hearing. The authority must have acted reasonably and properly, but that does not require investigation when the circumstances surrounding the seizure of cash give rise to an inference that cash is recoverable.
John is experienced in advising on cash forfeiture cases from an early stage. Both the National Crime Agency (NCA) and the Metropolitan Police regularly instruct John to act in cash forfeiture cases. John has successfully acted in cases where the value of cash exceeds £100,000. John accepts instructions on behalf of individuals facing cash forfeiture proceedings.
