OUTLOOK
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OUTLOOK
his family lived and where he had legitimate business interests. Whilst in Italy, he was due to undertake some transactions related to his business. Perhaps unusually by reference to common British business dealings but not in the region of Italy he was visiting, the transactions were to be carried out in cash. Having previously had money stolen from him in an inattentive moment by( most likely) another passenger, Mr. A decided to conceal the cash he was carrying in confectionery containers. It is noteworthy that the concealment could only ever have been effective against a fellow passenger and not against authorities as the cash would be obvious and visible to the authorities – as it was here and for which reason he was stopped. The money was seized from him. What then followed were litigation proceedings over a period of some 15 months which ultimately resulted in having his money returned.
This case was very important to Mr. A as obviously, he stood to lose the cash concerned. However, more significantly( and a matter often overlooked), was the reputational damage which would flow from a forfeiture order, and consequential damage to business interests.
It is important to consider the nature and consequence of the proceedings and the operative legal provisions. Cash forfeiture applications are not criminal proceedings, nor are they pure civil proceedings in that though the civil jurisdiction of the Magistrates Court( and on appeal the Crown Court) is engaged and the Civil Evidence Act applies, the Civil Procedure Rules do not. As a consequence, the rules in the CPR relating to evidence, disclosure and – importantly – costs, do not apply.
It can easily cost as much or more than the money in question to recover the cash. Importantly, and in contrast to civil proceedings generally, costs do not follow the event. Costs may be granted by the Crown Court pursuant to Rule 12 of the Crown Court Rules 1982. InR.( on the application of Perinpanathan) v City of Westminster Magistrates’ Court [ 2010 ] 1 WLR 1508, the Court held that it does have jurisdiction to make a costs order only where the Respondent has acted unreasonably and / or on grounds which are not sound. The starting point is therefore that a party who successfully resists a forfeiture application will not recover their costs. It may cost more to secure the return of the cash, than the amount of cash itself.
Most importantly, the allegations are necessarily made within the applicant’ s case. To succeed, the applicant must prove to the civil standard that the cash recoverable property( derived from criminal conduct), or intended by any person for use in unlawful conduct.
By way of advice, we suggest first that proper and contemporaneous business records are kept for cash transactions in a cash account and accountants kept informed of the level of cash business
The ramifications of such a finding, albeit the civil standard 3 is that the individual carrying the money is connected to criminality. This obviously impacts that individual’ s reputation as they would essentially be accused of criminality without criminal trial protections.
Further, that individual may hold an important role or may have been traveling on behalf of a company which may only trade by reason of a license. That license may be affected by connection with the criminal nature of cash, according to the finding of the Court.
By way of advice, we suggest first that proper and contemporaneous business records are kept for cash transactions in a cash account and accountants kept informed of the level of cash business. Individuals should only travel with large amounts of cash when there is an absolute necessity to do so. Otherwise, use the banking system wherever possible. Where it is necessary to carry cash, try to make arrangements at the destination before traveling so that you are expected( thereby being able to confirm what your intentions are). Do carry with you as much documentation as you can( i. e. a bank withdrawal receipt) to support the origin of the cash. Consider the nature of how that money is being carried and do not conceal it from authorities, a course which would create a high degree of suspicion, which would be hard to overcome if stopped.
If the authorities do seize the cash, engage early with as much documentary support as possible. If any issue arises as to record keeping and accounting regularity, engage a forensic accountant promptly to analyze any business record and model.
3
Although it is well established that where criminal allegations are made in a civil case, the evidence must be examined“ critically and anxiously” to ensure it meets the necessary standard of proof: Re D [ 2008 ] 1 WLR 499.
Disclaimer – The author of this article is Mr. Kartik Mittal, Senior Solicitor at internationally renowned London-based law firm, Zaiwalla & Co.
November 2017 | Legal Era | www. legaleraonline. com