Beneficiary with Proceeds of Crime Order

My colleague is dealing with an estate where one of the executors who is also a residuary beneficiary appears to have a history of criminal convictions. Newspaper reports indicate that he was involved in drug dealing and served a prison sentence. He was ordered to repay money under the Proceeds of Crime Act. The conviction and the order for him to pay several hundred thousand pounds of cash was around 10 years ago.

We are about to do an interim distribution on the estate and want to check whether we can treat this as an historic issue now he is out of prison and how we can check.

Do we need to know whether there is any other money outstanding still due to court? We want to understand whether us paying the inheritance due to him directly to him would be allowed or if we should be paying into court?

Are we obliged to check with the Court Office whether there is money outstanding? To do this we would have to give the Court Office his personal details - would we need his authority to release those (which he might not give) or is that confidentiality overridden by our duty to the Court to check if we should be paying money to them?

We need advice on how to find out whether there are still any live issues and make sure that we have done what we need to do. Not being familiar with the criminal law system we need some help with this.

With thanks for your thoughts.

I assume there is no doubt that the newspaper reports relate to your client.

My immediate view is that unless there is a bankruptcy order or pending bankruptcy action revealed by your pre-distribution search you are safe from any claim.

I think you should be open with all the executors about the problem. On the positive side. it may be possible for the offender to produce evidence that he has satisfied the order. But I think you must tell the other executors. If they know about it, there’s no harm done. If they don’t know about it, it’s clearly relevant to their duties.

Having said that, it’s a serious matter and I think you should get more responsible advice. It doesn’t appear from this post if you are in a SRA registered firm. If you are I would consult the SRA ethics department. I would also recommend getting specialist legal advice. You may be able to do this through your PI insurers, as this is probably a ‘circumstance’ which they would expect to have reported to them, and even if they won’t take it on under the policy they may be able to recommend someone with suitable experience and knowledge.

Tim Gibbons

Thank you Tim for the response.

The bankruptcy searches to date have been clear.

We too had concluded that the affected executor/ beneficiary may be able to say whether it is settled and historic and produce confirmation of that. We wanted to assess the position as far as possible before raising it with the clients.

Previous correspondence with the SRA ethics helpdesk essentially have said they couldn’t issue legal advice on duties to the court etc about the POCA orders.

Thank you again, any other thoughts welcomed.