In a highly significant ruling, the High Court has today granted an application to discharge three Unexplained Wealth Orders (UWOs) which were originally obtained by the National Crime Agency (NCA) in May 2019 in relation to three London properties. The judgment represents the first successful challenge to an UWO since the introduction of the legislation in 2018 via the Criminal Finances Act 2017.
Following a two day hearing in the Administrative Court in March, Mrs Justice Lang DBE has ruled on multiple grounds that the UWOs obtained by the NCA should be discharged. The Judge ruled that there were serious errors in the NCA's approach to obtaining and seeking to maintain the UWOs. These included incorrectly interpreting various aspects of the statutory test and wrongly relying on the use of legitimate complex corporate structures, without any further basis, as giving reasonable grounds for suspicion of wrongdoing.
The judgment sets out that material provided voluntarily by Mishcon de Reya on behalf of the Respondents to the UWOs and the ultimate beneficial owners (UBOs) of the properties represented cogent evidence in rebuttal of the NCA's case. Further, the Judge ruled that the NCA case had been "flawed by inadequate investigation into some obvious lines of enquiry" and that the NCA had "failed to carry out a fair-minded evaluation" of the information provided by Mishcon de Reya.
Johanna Walsh, Partner at Mishcon de Reya, who acted for the Respondents and the UBOs of the properties, commented:
"This is an important ruling for our clients who are pleased to have succeeded in their challenge to these orders although disappointed that they had to make this application at all. It is also very significant in the context of Unexplained Wealth Orders generally as it confirms that there are important and necessary limitations to the UWO scheme. It is essential that, in future cases, the NCA and other UK enforcement authorities are mindful of those constraints."