Financial Crime updates: the new Crime and Policing Bill and the SFO’s first Unexplained Wealth Order

In this briefing, partner Frances Murray and associate Emily Russell provide key updates on developments in the financial crime space, explaining how the introduction of the Crime and Policing Bill and the SFO’s first Unexplained Wealth Order point to an increased emphasis on asset recovery. 

The new Crime and Policing Bill is introduced

Background

The Government introduced the Crime and Policing Bill in the House of Commons on 25 February 2025. This Bill introduces various provisions that give effect to recommendations made in a number of Law Commission reports to date.

With regard to the impact on Financial Crime the Bill is intended to substantially overhaul Parts 2 and 4 of the Proceeds of Crime Act 2002 (“POCA”) dealing with the post-conviction confiscation regime. Part 2 of POCA contains the legislative scheme for recovery of assets acquired through criminal means in England and Wales whereas Part 4 provides the equivalent mechanism for Northern Ireland.

A confiscation order is a Court Order imposed against a convicted defendant, ordering them to pay a sum of money equivalent to the benefit arising from their crime, subject to the assets available to the defendant at the time. The defendant is not obliged to realise any particular asset(s) to satisfy the order, as long as the sum of money is paid. The subject of a confiscation order will have a set amount of time to satisfy their confiscation order, after which time interest will start to accrue.

As of 31 March 2021, the outstanding debt of unrecovered confiscation orders amounted to more than £2 billion. Many therefore believe that the current regime is inefficient, complex and ineffective at recovering the proceeds of crime.  

Proposed reform 

Accordingly, the Government have introduced the Crime and Policing Bill which should strengthen the ability of the criminal justice system to pursue those who have benefited from criminal activity.

The proposed reforms will give Courts more powers to make realistic and proportionate confiscation orders, improve the enforcement of orders and speed up confiscation proceedings. These measures are implemented to improve the recovery of assets which will allow for the return of more monies to victims and more funds for public services dealing with crime. 

In other news, earlier this year, on 17 January 2025 the Serious Fraud Office (“SFO”) secured its first Unexplained Wealth Order (“UWO”) at the High Court in relation to a property in the Lake District which is believed to have been purchased with the proceeds of a £100 million fraud.

The Lake District property is valued at approximately £1.5 million and is owned by Claire Schools, the ex-wife of Timothy Schools a solicitor who was sentenced to 14 years in 2022 for his role in a fraudulent scheme in which investors lost an estimated £100 million.

Mr Schools was convicted of fraud alongside his business partner David Kennedy, after promising investors a secure return by offering loans to law firms in the United Kingdom that were pursuing no win, no fee cases. The Cayman Islands-registered Axiom Legal Financing Fund, which was purportedly set up to lend money to firms, collapsed in 2012, affecting an estimated 35,000 clients whose cases depended on this finance.

The Lake District property subject to the UWO is believed to have been purchased with the proceeds of this fraud. Ms Schools has therefore been ordered to produce information about how the property was obtained within 28 days. The SFO may use this information at a later date should they wish to bring a case to seize the property.

An UWO is an investigative tool used by law enforcement agencies to determine the source of funding for an asset where there is suspicion that it was acquired with the proceeds of crime. 

We have already provided comment about UWO’s and in particular the first one obtained by the National Crime Agency in our earlier article. In this case, Zamira Hajiyeva, the wife of jailed Azeri banker, Jahangir Hajiyev, forfeiting a Knightsbridge house worth £14 million and the Mill Ride Golf Club in Ascot, purchased for £10.5 million in 2013, following an investigation conducted by the National Crime Agency. 

However, the UWO obtained in relation to the Lake District property is the first UWO used by the SFO since they came into force in 2018, making them only the second law enforcement agency to use this tool. 

Despite the rarity of UWOs, their introduction, along with the proposals contained in the Crime and Policing Bill confirm that asset recovery is viewed as playing a critical role in combating Financial Crime, and one that is encouraged by the Government and utilised by law enforcement agencies. This demonstrates a shift in the Financial Crime landscape and a move towards asset recovery over prosecution.

Much of the discussions around UWOs when they were first introduced, was around their use as an alternative to prosecution, for example when criminality could not be proved to the criminal standard, or where the respondent or evidence was out of the jurisdiction but the property held in the United Kingdom. The benefit of a UWO for law enforcement agencies is that it shifts the burden of proof to the respondent who must prove the asset was acquired legitimately to avoid forfeiture proceedings.

However, the recent UWO obtained by the SFO, was applied for after Mr Schools’ conviction. This case therefore demonstrates the flexibility of the tool, and that it can also be used as an aid to post-conviction asset recovery in the appropriate cases.

Furthermore, the Government’s introduction of the Crime and Policing Bill proposes amendments to existing legislative frameworks to strengthen the tools available to law enforcement agencies and the recovery of proceeds of crime. It is evident that there is an increased emphasis on asset recovery which will continue to feature, and no doubt evolve as a prominent mechanism to combatting Financial Crime in years to come. 

Frances Murray is a partner in the criminal and financial crime team and Emily Russell is an associate in the same team. Both advise individuals, limited companies and PLCs from the investigatory stage to court proceedings, as well as on matters relating to account freezing orders, unexplained wealth orders, sanctions and suspicious activity reports. They have a wealth experience of acting on multi-jurisdictional matters with clients involving high-net-worth and ultra-high-net-worth individuals as well as large corporate organisations.