Irwin Mitchell v Revenue and Customs Prosecutions Office and Allad: CACD 30 Jul 2008

The solicitors had been paid funds on account of their fees in defending the client. By the time a freezing order was made under the 2002 Act in respect of his assets, the firm’s fees exceeded the amount held. The court was asked what was to happen to the funds. The solicitors had not yet delivered an account. The court had said it had no jurisdiction to alter the order to allow the fees to be used in this way. The solicitors said that the client no longer had any beneficial interest in the money.
Held: The solicitors were free to deliver an account and to apply the fees in payment of it.
Toulson LJ said: ‘the andpound;5000 was paid and received for a single identified purpose, namely payment of Irwin Mitchell’s fees as and when they had earned them. If they had used the fund for any other purpose, without Mr Allad’s informed consent, they would have committed a breach of trust. And until they had earned that level of fees, they were bound to hold the money on Mr Allad’s behalf. Once they had earned that amount in fees, the value of Mr Allad’s interest in the fund was reduced to nil. In order to protect a client from a solicitor transferring funds from the solicitor’s client account to office account in payment of his fees when such fees have not been properly incurred, the Solicitors Account Rules prescribe the steps which the solicitor must take. Those provisions govern the means of exercise of the solicitors’ contractual right to payment from the fund, which arose from the agreement and the work done. The bill, if properly served, reflects the solicitors’ entitlement to payment by virtue of the work done. Once they were entitled to payment of that sum, Mr Allad’s ‘interest’ in the relevant account became literally nominal; that is to say, the account bore his name, but he no longer had any interest of substance in it. It is important to distinguish between substance and form.’
The RCPO’s argument as to how a firm might aid and abet a criminal were not to the point. The sum requested and prospective bill were proper.


Toulson LJ, Jack J


[2008] EWCA Crim 1741, [2009] 3 All ER 530, [2009] 1 Cr App R 284, [2009] 1 WLR 1079




Proceeds of Crime Act 2002 40 41, Solicitors Account Rules 1998 19(2)


England and Wales


CitedLoescher v Dean ChD 1950
The plaintiff sought specific performance, and obtained an order that the defendant vendor should convey the property to him on the payment for it. The plaintiff paid the sum to the defendant’s solicitors, who paid it into their client account. The . .
CitedThe Serious Fraud Office v Lexi Holdings Plc CACD 10-Jul-2008
Application was made for the variation of a restraint order made under the 2002 Act to enable payment to be made to a judgment creditor in advance of any confiscation order being made, or indeed before any criminal charges had even been preferred. . .
CitedHM Customs and Excise v Barclays Bank Plc HL 21-Jun-2006
The claimant had served an asset freezing order on the bank in respect of one of its customers. The bank paid out on a cheque inadvertently as to the order. The Commissioners claimed against the bank in negligence. The bank denied any duty of care. . .
CitedTwinsectra Ltd v Yardley and Others HL 21-Mar-2002
Solicitors acted in a loan, giving an undertaking as to its application. In breach of that undertaking they released it to the borrower. The appellants appealed a finding of liability as contributors to the breach.
Held: ‘Money in a . .
CitedRe K (Restraint Order) 1990
An order under the Act prohibited K from disposing of his assets, including a deposit account with the bank. K had an overdraft facility secured against the deposit account. The bank sought to set off the overdraft against the sums held on deposit. . .
Lists of cited by and citing cases may be incomplete.

Criminal Practice, Legal Professions

Updated: 18 July 2022; Ref: scu.271268