Property Freezing Orders under POCA 2002

Introduction

Sections 245A to 245G of the Proceeds of Crime Act 2002 set out the legal framework for Property Freezing Orders (PFOs) in England, Wales, and Northern Ireland. These provisions allow the High Court to restrict dealings with property that may be recoverable through civil recovery proceedings.

Section 245A – Application for Property Freezing Order

An enforcement authority that may bring civil recovery proceedings in the High Court can apply for a Property Freezing Order before or after proceedings begin.

A PFO must:

• Specify or describe the property covered

• Prohibit anyone whose property is covered from dealing with it, subject to exclusions under section 245C

Applications can be made without notice if giving notice would prejudice the authority’s ability to obtain a recovery order.

The court may grant a PFO if there is a good arguable case that the property is recoverable or associated property. Where the property is alleged to be associated property and the owner’s identity is unknown, the authority must have taken all reasonable steps to establish it.

Section 245B – Variation and Setting Aside of Order

The court may vary or set aside a PFO at any time. It must:

• Set aside the PFO if an interim receiving order covers all of the same property

• Vary the PFO to remove property covered by an interim receiving order

• Remove property found to be neither recoverable nor associated

Before making changes, the court must give an opportunity to be heard to the parties and anyone else who may be affected, unless variation or setting aside is mandatory under subsections (2) or (3).

Section 245C – Exclusions

The court may:

• Exclude property entirely from the PFO

• Allow specific dealings with the property without excluding it from the order

Exclusions may be made at the time the order is granted or later, and may allow a person to:

• Meet reasonable living expenses

• Continue a trade, business, profession, or occupation

Legal expenses exclusions must be limited to reasonable costs, specify the total amount released, and comply with conditions in section 286A. The court must consider the importance of legal representation and, in certain cases, disregard possible legal aid availability.

Exclusions should be made so far as practicable without unduly prejudicing the enforcement authority’s right to recover unlawfully obtained property.

Section 245D – Restriction on Proceedings and Remedies

While a PFO is in force:

• The court may stay legal actions concerning the property

• No distress or taking control of goods may take place without court permission

• Courts may stay or allow proceedings to continue on terms

• Landlords cannot forfeit tenancies by peaceable re-entry without court permission

Before exercising these powers, the court must give affected parties and others who may be affected an opportunity to be heard.

Section 245E – Receivers in Connection with Property Freezing Orders

If the High Court makes a PFO, it may appoint a receiver for any property covered, on application by the enforcement authority.

Applications may be made without notice if giving notice would prejudice the right to obtain a recovery order.

The authority must nominate a suitably qualified person, who may be a staff member.

Sums received under section 280(2) can be used to pay the receiver’s remuneration and expenses, except where the receiver is an authority staff member (in which case only certain costs apply).

Section 245F – Powers of Receivers Appointed under Section 245E

On application by the enforcement authority, the court may authorise or require the receiver to:

• Exercise management powers in Schedule 6

• Take steps to manage the property, including detention, custody, or preservation

The court may also require persons to:

• Deliver property or place it in the receiver’s custody

• Take preservation steps

• Deliver related documents to the receiver

A PFO does not prevent compliance with these requirements. Receivers are not liable for dealing with property outside their appointment if they reasonably believed they were entitled to do so, unless negligence is involved.

Section 245G – Supervision of Section 245E Receiver and Variations

Applications for directions on the receiver’s functions may be made by:

• The receiver

• Parties to the PFO or receiver’s appointment

• Persons affected or potentially affected by the receiver’s actions

The court must hear relevant parties before giving directions. It may vary or set aside the receiver’s appointment, orders under section 245F, or directions under section 245G, after hearing those affected.

Conclusion

Sections 245A–245G of POCA 2002 provide the statutory basis for freezing property in civil recovery proceedings, setting out clear rules for applications, variations, exclusions, and the appointment and supervision of receivers. The provisions aim to preserve assets while ensuring that affected parties have procedural safeguards.