The Court of Appeal considered whether the movement of fees from the client account to the office account would be a breach of a criminal restraint order, in the case of Irwin Mitchell (a Firm) v Revenue and Customs Prosecutions Office and Another, Times 27 August 2008 (CA Crim).
The firm was acting on behalf of Mr Allad who was facing investigation for VAT evasion, cheating the revenue and money laundering. Mr Allad paid £5000 into the client account in anticipation of legal fees. Five days later Revenue and Customs Prosecution Office obtained a restraint order over Mr Allad's assets. A further eight days later RCPO served Mr Allad with the restraint order and it came to the notice of the firm. By this time, the firm's costs had exceeded the amount already paid. The firm sent Mr Allad their bill and notified RCPO that they would transfer the money into the office account in accordance with the Solicitors Account Rules. RCPO objected to this transfer on the basis that this was prohibited by the restraint order.
The court held that it was not the purpose of a criminal restraint order to prevent third parties from enforcing civil rights against a defendant if those rights would be unaffected by a confiscation order which might be made against the defendant at the end of criminal proceedings against him. Payment of solicitors' fees would not deplete the true value of the defendant's assets or frustrate the purpose of the restraint order and the solicitors were entitled to utilise the fund in payment of their fees.