Challenging Restraint Orders under POCA: Variation, Discharge and the New Focus on Dissipation Risk

Restraint Orders can have immediate and serious consequences for individuals and businesses. Especially in circumstances where there may be little prospect of a charging decision anytime in the near future.

In this article we deal with the basics of how to best go about seeking a variation to, or even the complete discharge, of a Restraint Order. In particular, following some significant amendments recently following the implementation of parts of the Crime and Policing Act 2026 (CPA) on 29^th June 2026, we consider the following:

• When Restraint Orders are made under the Proceeds of Crime Act 2002;
• The new statutory focus on the risk of dissipation following the Crime and Policing Act 2026;
• The importance of full and frank disclosure in without notice applications;
• Why complex financial structures do not, without more, prove dissipation risk or criminality;
• Applications for living expenses, legal expenses, variation and discharge;
• Delay, progress reports and when an Order may no longer be justified.

The Starting Point

An application for a Restraint Order will generally be made without notice and often at the early stages of an investigation. In practice, an individual or business will only receive notice after the order is made, or have an indication something is wrong when they are unable to access bank accounts.

For suspects, directors, business owners and sometimes third parties, the timing can cause considerable disruption. As the Restraint Order is likely to have been made very early on in an investigation, the evidence is incomplete, the prosecution case is undeveloped and no charging decision is expected for months, or sometimes years. That is why early scrutiny of the Restraint Order, the evidence supporting it and the way in which it was obtained is critical.

There are a number of grounds which a prosecutor may rely upon in applying for a Restraint Order, but the most common is the existence of an on-going criminal investigation where there is a reasonable suspicion that the suspect has benefitted from his or her offending (s40(2)). However, this is not the only statutory criteria that must be satisfied in order for the Crown Court to grant the order.

Risk of Dissipation

Aside ‘reasonable suspicion’ (see below) there had always been an additional hurdle which, until now, had not been spelt out in the legislation. There had to be a risk of dissipation before the Court would restrain assets. This was often a cause for challenge especially where a suspect was aware of a criminal investigation but had not taken any steps to dissipate assets before the application for the Restraint Order had been made; see e.g. Re B [2008] EWCA 1374. It was said that the risk of dissipation had to be ‘real’, not ‘merely fanciful’, before an Order could be granted; Re AJ & DJ (unrep. Dec 9, 1992).

The CPA has now inserted into s40(1) of POCA a formal condition for the granting of a Restraint Order that there is; “a real risk that relevant realisable property [..] will be dissipated unless the Crown Court exercises the powers conferred….”. This is supplemented by s40(1B) which requires the court to consider a number of factors before deciding a risk of dissipation exists - this includes, for example, the nature of the property in question and evidence of the suspect’s character.

On the one hand, this new statutory test makes it easier for the Crown to secure a sustainable Restraint Order as it forces the prosecution, and the Court, to consider the real risk of dissipation test, which was sometimes previously just given lip-service. The new statutory test also does away with the notion that a suspect who knows of the criminal investigation but has not, for example, sold his or her house, does not mean that that fact alone should prevent a Restraint Order being made.

However, the more a prosecutor has to answer questions and justify a without notice application, the more the risk of getting it wrong. This could lead to a potential separate challenge on lack of full and frank disclosure grounds (see below). For example, the police may believe that their suspect is a leading figure in a fraudulent scheme and advance that to the Judge, but then fail to bring to the Court’s attention other evidence suggesting a much more minor role at best.

Furthermore, the amount by which a suspect is believed to have benefited from their purported criminal conduct is a determining factor when considering whether to make an all assets Restraint Order. For example, if the evidence, at its highest, shows that the suspect was paid a limited sum for his or her services to the alleged criminal enterprise and only for a limited period, then restraining all of his or her assets would arguably be neither proportionate nor necessary.

Duty of Full and Frank Disclosure

As most Restraint Orders are made without notice, similar to search warrants, this places a heavy duty on the applicant. The Crown must not simply put forward material that supports the statutory conditions for the application. There must be full and complete disclosure, including disclosure of anything that might militate against the granting of the application. This duty requires the applicant to, as Hughes LJ memorably put it:

“put on his defence hat and ask himself, what, if he was representing the defendant or a party with a relevant interest, he would be saying to the judge.”

This obligation to present a case fully and fairly may be especially important where reliance is made on the complexity of financial arrangements.

The duty of disclosure includes the duty to investigate and the applicant; 
“must make proper inquiries before making the application… The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries” (Brinks Mat Ltd v Elcombe [1988] 1 WLR 1350 at 1356F-1357D).

The case of Windsor & Hare v CPS [2011] EWCA 143 is instructive. HMRC were investigating an alleged duty diversion fraud involving suspects linked to the Eastenders group of companies dealing in alcohol imports. HMRC obtained, ex parte, both a Restraint and a Management Receivership Order. In the subsequent appeal proceedings, the Court of Appeal quashed the orders but allowed time for the Crown to re-apply to the Crown Court for new orders. That later application was unsuccessful. The Appeal Court took advantage of the case to effectively teach HMRC a lesson, along with a lesson to judges, that such orders should not be granted ex parte unless the prosecution can demonstrate that they have done their job properly.

The applicants had relied on “broad and unsupported statements”, such as the suspects being members of an Organised Crime Group (OCG) and that it was “suspected the goods may have been diverted” etc. That is suspicion, not evidence, and the Court firmly found that it was not good enough.

Where it can be shown that the court was not given a fair picture, or that important and contextual material was omitted, there may be a basis to seek discharge of the Restraint Order.

Complex Financial Structures

In serious fraud and financial crime investigations, prosecutors often point to complex company structures, offshore entities, trusts, nominee arrangements or international accounts as evidence of risk.

Does the existence of a ‘complex web’ in a corporates financial structure provide evidence of a risk of dissipation? The answer is ‘no’ - at least not on its own. In challenging the making of a Restraint Order made in the criminal courts, it is sometimes useful to draw an analogy with civil freezing injunction authorities.

In Holyoake v Candy [2017] EWCA Civ 92, the Court of Appeal considered a case that involved H’s proposed purchase of a £43M property in London and the loan to him for that purpose from the Defendant (C). C was then subject to an unlawful means conspiracy claim after H claimed that the agreement was tainted by later intimidation by C. H secured a world-wide freezing injunction against C. In granting the injunction, the High Court had found that there was a good arguable case on the underlying merits and that there was a risk of dissipation. In relation to the dissipation issue the Judge accepted that the mere fact that there was a large number of off-shore companies in the structure in issue, by itself, was not evidence of a risk of dissipation, but it was a factor that could “legitimately be taken into account” (para 20).

The Court of Appeal rejected that logic. Gloster LJ found that there had to be a real risk, judged objectively, that any future judgment would not be met because of the risk of an unjustifiable dissipation of assets. If such a risk had been made out then “the link to complex and offshore corporate structures and the potential to transfer value rapidly and invisibly through corporate reorganisation could contribute to that risk”. However, the “mere possibility of a party using a complex corporate structure …. does not equate to a risk of dissipation” (paragraph 50).

Where the investigator has, in the without notice application, relied on the use of BVI corporations and off-shore accounts for example, to suggest underlying criminality, as opposed to just the risk of dissipation, then that can lead to a challenge. In R (Rawlinson and Hunter) v Serious Fraud Office [2013] 1 WLR 1634, a case relating to a search warrant, concerned the same duty of full and frank disclosure that is required in any without notice application. The SFO had specifically relied upon a particularly complex transaction as evidence of criminality. The High Court noted that “like many very wealthy businessmen, RT operated the business in which he had an interest through a complex structure based in an offshore location for fiscal reasons” (para 5). The very complexity required the SFO to explain to the Judge that in fact, the suspects had received advice from two pre-eminent international law firms about the transaction in issue. The SFO had failed to do so and therefore a fair picture was not painted and the ‘defence hat’ was not put on.

The Holyoake v Candy case was followed by the High Court in National Crime Agency v Baker [2020] Crim LR 976 (the 'Holyoake' principle now being applied to prove the underlying allegation and not just proof of the risk of dissipation). The Court discharged three Unexplained Wealth Orders (UWOs) and interim freezing orders which had been granted ex parte in respect of properties. Unreliable assumptions had been made by the NCA regarding the source of the funds used to purchase the properties. The need for caution in treating complexity of property holding through corporate structures as grounds for suspicion, as recognised in Holyoake v Candy in the context of the risk of dissipation of assets in civil proceedings, applied equally in the context of UWOs.

As always, much depends on the issues and the factual position. It may be stated that the very structure itself is part of the means of a conducting a fraud, for example, a pension or tax fraud allegation when the prosecution will have other evidence of dishonesty. On the other hand, the client may be indicating that in fact the assets are not his or hers as alleged or, more usually, that there is an interest in the trusts or accounts etc. but the complex arrangements in place are there for a good and legitimate reason.

Living & Legal Expenses

This is another area which often frustrates those on the wrong end of a Restraint Order - the amount allowed by the Order for ordinary living expenses. An application to vary the Order after the initial ex parte Order will often challenge the amount allowed to be spent on daily living i.e. the weekly or monthly sum that will be free from the Restraint Order to permit living expenses to be drawn from a frozen account.

In these applications, what is required is a careful analysis of expenses together with as much proof as possible of the legitimacy of the expenses and the means or income that will satisfy these costs. These are steps that should be considered at the earliest opportunity given how convoluted this issue alone may become.

Historically, a variation could not be made for legal expenses in relation to the actual offence in respect of which the Restraint Order is made (s41(4)(a)). Thus, if there are no free assets, the State must pay for the defence (assuming a criminal charge is made) through Legal Aid. However, CPA now introduces an important change by allowing exceptions to a Restraint Order for the payment of reasonable legal expenses. A new s41ZA reverses the limitation but is yet to be bought into force. Once enacted, eligible Respondents will be able to withdraw sums from frozen accounts to pay for their legal fees.

How Long will the Restraint Order Last?

It has long been the case that the Crown, upon successfully applying for a Restraint Order (whilst a criminal investigation was on-going), had to provide the Court with progress reports. These are usually served every 3 or 6 months depending on the size of the investigation as a statement from the financial investigator and a report from the prosecutor.

Anyone affected by a Restraint Order may apply for its discharge. One of the grounds for doing so is under s42(7)(a), the Court must discharge the order if proceedings have not been started within ‘a reasonable time.’ The reporting requirement is meant to help assess whether the Crown have been acting diligently or not.

The Court of Appeal handed down guidance on how to deal with applications to discharge a Restraint Order where it is said that the investigation has been going on for too long to justify the continued restraint of assets. As set out in R v S [2019] EWCA Crim 1728 the following, non-exhaustive list, are relevant:

• the length of time that had elapsed since the restraint order had been made; 

• the reasons and explanation advanced for such lapse of time;

• the length and depth of the investigation before the restraint order was made; 

• the nature and extent of the restraint order;

• the nature and complexity of the investigation and the potential proceedings;

• the degree of assistance given to, or obstruction of, the investigation (paras 29-40).

In the recent case of R v Bewley [2026] EWCA Crim 730, the Court of Appeal refused to interfere with a Crown Court Judge’s decision to quash a Restraint Order following the prosecution failing to provide evidence properly addressing the charge of unreasonable delay on their part.

This is another area where the CPA has amended POCA providing further statutory structure around this analysis. Section 41(7CA) is inserted into the reporting requirements section and adopts 6 similar points set out by the Court of Appeal above. Interestingly, the very last point (vi) is left out of the new statutory list of relevant factors. The CPA also adds another factor in favour of the prosecution which is ‘the extent to which the matters subject to [the] investigation include matters arising abroad.’

Restraint Orders affect homes, families, business, employees, creditors and third parties. Where an Order continues for a prolonged period without charge, the practical impact can become a central argument for variation or discharge.

Application for Variation or Discharge

Anyone affected by the Restraint Order can apply for its variation or discharge. Once a suspect has been served with a Restraint Order, and has decided to fight it, then the first step must be to sit down with his or her legal advisors and figure out what the challenges are. For example, how much money is needed for reasonable living expenses, what is said about the investigation, how much of the defence case it is tactically wise to give away at that early stage and whether the prosecution can demonstrate it acted properly at the ex parte stage.

In some cases, the correct approach may be to seek a targeted variation to allow ordinary expenditure, business trading, payment of professional fees or preservation of asset value. In others, the better course may be to challenge the Order in principle and seek a discharge.

A well-prepared application will usually involve:

• Careful analysis of the original application and supporting evidence; 

• Identification of omissions, assumptions or unsupported assertions; 

• Evidence of the client’s financial position and legitimate source of funds; 

• Consideration of benefit, available amount and proportionality;

• A clear schedule of any living, business or legal expenses sought; 

• Assessment of the investigation timeline and any unexplained delay; 

• Tactical consideration of what defence material should be deployed.

Conclusion

Restraint Orders are powerful orders with serious consequences. They are often obtained without notice, at an early stage of an investigation, and before the person affected has had any opportunity to respond.

The recent and pending statutory amendments do not remove the need for careful judicial scrutiny. If anything, they create a more defined framework for challenge. Prosecutors must properly address dissipation risk, the court must consider the relevant statutory factors, and respondents have clear routes to seek variation or discharge.

For those affected, the priority is early, specialist and strategic advice. The immediate questions are whether the Order was properly obtained, is there a risk of dissipation, is it proportionate, was the court given a fair picture, does the restraint remain justified and what practical steps are needed to protect living arrangements, business interests and the wider defence strategy.

About the Authors

Jonathan Lennon KC is a Barrister specialising in serious and complex criminal defence cases. He is based at Doughty Street Chambers in London. He has extensive experience in all aspects of financial and serious crime and the Proceeds of Crime Act 2002. He is ranked by both Legal 500 Chambers & Partners & is recognised in C&P’s specialist POCA and Financial Crime sections; "Jonathan Lennon is a real fighter, who really cares about his client and gets stuck in, getting to the bottom of the matter. He's a very hard-working and effective advocate." Chambers & Partners, 2026 and “John is a distinguished silk and a leading figure in the intricate and heavyweight realm of serious financial and regulatory crime. Possessing a comprehensive knowledge of the law, he consistently leaves a lasting impression.” Legal 500, 2025.

Sam Healey is a Solicitor and consultant, and the founder of SPH Legal, specialising in serious and complex fraud, financial crime, POCA, asset recovery, regulatory investigations and criminal defence. He is ranked by both The Legal 500 - “Sam Healey is a master tactician and is all across every case he does. He is one of the very best” and Chambers & Partners - “He is meticulous, passionate and he provides clients with an exceptional level of service”, and by the Doyle's Guide as a Preeminent Criminal Defence Lawyer. Sam advises individuals, professionals, company directors and businesses in high-stakes investigations, including restraint orders, account freezing orders, crypto-asset freezing, confiscation and civil recovery proceedings.

This article is for general information only and does not constitute legal advice. Specific advice should be obtained in relation to the facts of any individual case.