Pinsent Masons cautions police to protect budgets from law firms over scheme to seize fraudsters’ assets

Pinsent Masons has warned that police budgets risk being swallowed up by law firms unless work given to them to seize fraudsters’ assets is done either on a “no win no fee” basis or according to competitive tendering.

While the firm welcomed the City of London Police’s decision to use private sector law firms to seize fraudster’s assets as a vital step to prevent law enforcement agencies being drowned by the scale of fraud, it warned they would need to watch their bottom lines.

Alan Sheeley, partner and head of civil fraud and asset recovery at Pinsent Masons, explained law firms could be forced to only charge a percentage of the funds they seize from fraudsters.

The firm said that given the amount of fraud taking place in the UK, competitive tendering should also be undertaken to ensure that law firms who do win cases are still working hard for any fees they charge.

Mr Sheeley said: “This is a really exciting and long overdue step for law enforcement agencies in the UK.

“However, we don’t want it to impact the budgets of police forces and nor do we want negative headlines about law firms profiteering so it is vital that the billing by law firms is kept under control.

“Fraud is one of the fastest growing categories of crime with the biggest financial cost, but it is a crime that every police force around the world is struggling and failing to control.

“Law firms, rather than the police, are best placed to pursue the assets of fraudsters through the civil courts.

“The skills and experience of undertaking civil recoveries and injunctions lie in the law firms and not in police forces. Law firms are also used to undertaking these cases at a moment’s notice and seizing the assets of fraudsters before they are spirited around the world through a network of international bank accounts.”

Proposals for police forces to make use of private sector law firms have been endorsed by the Home Affairs Select Committee following the inquiry into the effectiveness of the Proceeds of Crime Act 2002.

The inquiry’s report, published this month, credits the written evidence provided by Pinsent Masons for proposing several of the recommendations adopted by the committee.

The firm said the report confirms that UK law enforcement agencies are not currently geared up to move sufficiently quickly when it comes to freezing and recovering criminal assets.