A restraint order is a court order used in criminal proceedings to freeze assets, when it is suspected by the police or other authorities that someone has benefited from criminal conduct. It is often imposed at an early stage of a criminal investigation and can prevent individuals and businesses from accessing or disposing of their finances and property anywhere in the world. This measure is designed to make sure that assets remain available for potential confiscation following a conviction.

The Serious Fraud Office (SFO), the Crown Prosecution Service, and other enforcement agencies can apply for a restraint order under the Proceeds of Crime Act 2002. These orders can have severe consequences for those affected, including businesses, families and third parties who are connected to the individual under investigation.

When Can a Restraint Order Be Issued?

A restraint order can be granted by the Crown Court if there are reasonable grounds to suspect that an individual has committed a criminal offence and has benefited financially from their offending behaviour. It can be imposed:

• Before a person is charged: if there is an ongoing criminal investigation and law enforcement suspects that assets may be dissipated before formal charges are brought.
• After a person is charged: if prosecutors believe that the accused has received a financial benefit from criminal activity and there is a risk of assets being hidden or transferred.
• Following a conviction: when the court is considering a confiscation order to recover the proceeds of crime.

Restraint orders are often used in cases involving fraud, money laundering, drug trafficking, and financial crimes. For example, the SFO frequently applies for such orders in high-value fraud cases to prevent the concealment of assets before a confiscation process begins.

Who Can Be Affected by a Restraint Order?

A restraint order applies to a specified person - usually an individual or business under investigation. However, it can also impact:

• Family members: if assets are jointly owned or transferred to close relatives, they may also be subject to the order.
• Businesses: if a company is linked to suspected criminal conduct, the order can restrict corporate accounts, transactions and property sales.
• Third parties: including partners, associates or financial institutions holding the affected assets.

Even if someone is not directly accused of a criminal offence, they may still be impacted by a restraint order if they are connected to the specified person financially.

What Does a Restraint Order Mean for You?

If a restraint order is imposed, you may find that your ability to manage your finances is severely limited. The restrictions can apply to personal funds, jointly held assets and business accounts, making it difficult to continue normal financial activities. Restrictions include:

• A freeze on personal and business accounts, preventing access to funds.
• Barring the sale, transfer or disposal of property, vehicles and other assets.
• Preventing businesses from carrying out financial transactions without approval from the court.

These restrictions can remain in place for an extended period, even if no charges are ultimately brought. In many cases, the financial strain caused by a restraint order can be as disruptive as the related criminal investigation.

Living allowance issues

While a restraint order restricts spending, individuals can apply for a living allowance to cover essential expenses such as rent, mortgage payments, and utility bills. However, the process of securing this allowance is often complex and your needs will be highly scrutinised by the courts.

The Crown Court must approve any request to access frozen funds, and the applicant must provide detailed financial disclosures to justify their expenses. Courts typically impose strict limits on the amount they will grant. Expenses deemed unnecessary - such as luxury purchases, discretionary spending or non-essential travel - are likely to be rejected. Any such application may be rejected without the support of an experienced solicitor, who can help you to secure access to the funds you need.

Consequences of breaching a restraint order

A breach of a restraint order is taken seriously by the courts. If an individual disposes of assets or spends funds without permission, they may face contempt of court proceedings or, in serious cases, a conviction for perverting the course of justice that results in imprisonment.

Anyone subject to a restraint order should seek legal advice immediately to avoid potential penalties.

How to Challenge a Restraint Order

A business crime solicitor with experience in this area can help you establish strong grounds for challenging a restraint order to discharge it. This will be done through the Crown Court or the High Court, depending on the circumstances. Challenges include:

• The lawfulness of a restraint order
• Lack of evidence: if law enforcement agencies fail to show reasonable grounds that someone has benefited from criminal conduct. 
• Disproportionate impact: if the order is causing undue hardship to innocent third parties, such as family members or business associates.

Your solicitor can also apply to vary the terms of the order to allow for necessary expenses, business transactions or legal fees.

Restraint Orders and Civil Restraint Orders

It is important to distinguish between restraint orders in criminal proceedings and civil restraint orders.

A restraint order freezes assets in criminal cases to prevent financial dissipation in case  confiscation proceedings are later pursued.

A civil restraint order prevents an individual from making repeated court applications in civil litigation, usually in cases where they have previously brought multiple claims that have been deemed frivolous.

The two orders serve entirely different legal purposes, but the similarity in terminology often causes confusion.

How JMW Can Help

JMW’s Business Crime team has extensive experience in advising clients who are subject to restraint orders. We can provide expert legal support to individuals and businesses affected by these orders, help them regain control of their finances and protect their interests by:

• Challenging the order in court: if there is insufficient evidence to justify the restraint order or if it is having a disproportionate impact on your finances or business, we can argue for its removal or modification.
• Securing variations for essential expenses: we can help you to access frozen funds to cover necessary costs such as living allowance issues, mortgage payments and business transactions, by applying to vary the restraint order.
• Defending clients in confiscation proceedings: if law enforcement is pursuing a confiscation order, we work to challenge allegations of financial benefit from criminal activity and limit the potential consequences.
• Advising family members and third parties: a restraint order can affect more than just the person under investigation. We can provide guidance to family members, business partners and others whose assets or financial stability may be at risk.

Restraint orders remain in place until court proceedings and criminal investigations are complete. This often leaves you without a clear timeline for resolution. Seeking legal representation at the earliest opportunity can help safeguard your assets, challenge unjust restrictions, and minimise financial disruption. If you are subject to a restraint order or believe one may be imposed, contact JMW’s Business Crime team today for expert advice.