Litigation in a time of Corona : epilogue
Click here for the press release version.
‘A sting in the tail for professional advisers’
As I set out in my last article, the NCA lost the first challenge to Unexplained Wealth Orders in the High Court in National Crime Agency v Baker & Ors [2020] EWHC 822 (Admin) (08 April 2020).
The appeal advanced and accepted by Lang J argued that despite the complicated structures put in place to veil the ownership of three London residential properties, namely in overseas entities, the ultimate beneficial owners of three residential properties were in fact Mrs Dariga Nazarbayeva and Mr Nurali Aliyev. In the process of doing this the appellants placed the identity and role of a professional adviser firmly in the spotlight.
The professional adviser, Andrew Baker, was described in the judgment as an experienced solicitor and professional trustee. He had been appointed as president of the councils of two of the Panamanian Private Interest Foundations (PPIFs) that were the registered proprietors of two of the three properties. As a result, Mr Baker and the PPIFs were the subjects of the NCA’s original successful ex parte application and had the unenviable burden of challenging it, including the NCA assertion that the he had ‘effective control over the property’ and ‘..conducted himself in a way which was likely to facilitate the commission of a serious offence in England and Wales, including money laundering’.
It would be easy to think Mr Baker was unlucky. Sadly, this is unlikely.
In an interview with the Financial Times in September 2018, the head of the NCA’s economic crime unit, Donald Toon, was explicit about how the legislation would work: ‘Do we have concerns about the effectiveness of… customer due diligence in parts of the legal profession and accountancy sector? Yes, we certainly do…’.
What does this mean for professional adviser? Whether they are lawyers (solicitors, barristers & legal executives answerable to their respective regulators), accountants (ICAEW) or financial service professionals (FCA SMCR approved) those engaged in the provision of such advice should exercise considerable caution.
Baker & Others has demonstrated that the NCA has been prepared to follow through on a soundbite (perhaps a first for UK Law enforcement) and take a position that a professional adviser can fall within the ambit of the Unexplained Wealth Order regime and be a ‘professional enabler’.
Being drawn into a protracted civil litigation with UK law enforcement which could lead to a criminal prosecution is a life changing event. All professionals advising Ultra High Net-Worth Individuals (UHNWIs) need to take considerable care in protecting themselves against allegations that at best compromise their integrity and at worst been complicit in criminal conduct. Seeking their own legal advice pre, during and post their engagement with the UHNWI is now essential.
How Berkeley Rowe can assist
Berkeley Rowe can assist with comprehensive analysis on the legal risks assets and business relationships, expose individuals to and provide robust and clear advice as to measures that can be taken to address weaknesses. In the event of UK law enforcement intervention Berkley Rowe has dynamic litigators and advocates to ensure clients achieve the most favourable outcomes.
Like AFOs and AssFOs, UWOs and IFOs need not be ‘Black Swan’ events. Berkeley Rowe’s holistic approach is to assist individuals and corporates in identifying problems, propose the best cost-effective solutions and build a strong and lasting working relationship that survives a crisis.