Concern higher Abramovich raid costs order would deter investigators

Tuesday 24 January 2023

Concerns that officers may be deterred from “doing their duty to investigate crime” has led the Royal Court to rule against allowing an individual and company whose premises were unlawfully raided as part of an Abramovich-related probe to get the public to pay a bigger share of their legal bills.

In a hearing at the Royal Court in December, lawyers for an applicant known only as ‘XY’ - understood to be an English solicitor employed by a sanctioned ‘entity’ – and a firm called ‘A Limited’ argued that they should be entitled to "indemnity costs", which could equate to 70 to 80% of their legal bills.

However, the States of Jersey Police argued that they should only be required to pay lower "standard costs", amounting to 60 to 70% of the bills.

As laid out in the Royal Court Rules 2004, 'standard basis' costs means that the benefit of the doubt is given to the paying party, whereas 'indemnity basis' costs means that the benefit of the doubt is given to the receiving party.

The case resulted from a raid of XY's home and A Limited's office in April 2022 during which officers seconded to the Economic Crime and Confiscation Unit seized documents and electronic devices.

On behalf of the officers, Police Chief Robin Smith later accepted that the search warrants were obtained unlawfully because the application for the warrants was made under the wrong article of the law. Damages were paid out of public funds.

However, the subject of costs remained in dispute.

Handing down his judgment yesterday, Commissioner Sir William Bailhache explained that both applicants "moved their position from time to time" between August and November, but that XY and A Limited had indicated their costs were in the region of £170,000 and £175,000 respectively.

Sir William described the costs, if incurred on an indemnity basis, as "eye-watering".

"The risk of such a costs order might inhibit a public authority such as the police from doing their duty to investigate crime," he said.

Instead, Sir William ruled that standard costs should be paid by the police to each applicant up to 9 November, which was when it was agreed that costs would be paid. The final amount is yet to be agreed. If agreement is not reached, the figure will be decided by the Royal Court.

Following the latest judgment, the Government confirmed in a statement that the States of Jersey Police would not be paying the costs or damages from their budget - and that the payment would instead be handled by the "Government's insurers with any residual amount being paid from the Court and Case Costs budget as is normal."

Advocate Steven Meiklejohn was representing States of Jersey Police, while Advocate Jeremy Heywood appeared for 'XY', and Advocate Paul Nicholls appeared for 'A'.

After it emerged in November that the raid had been unlawful, Chief Minister Deputy Kristina Moore ordered an independent 'lessons learned' review.

Express and the JEP have asked for the terms of reference of that review and who is leading it, as well as details of the damages paid out of public funds, but the Government previously declined to provide a response. Following the judgment, those questions have been put to Government again, and answers to those specific queries have not yet been received.

In its statement, the Government added, however: "Having taken independent advice, the Government is satisfied that the Attorney General and the Chief of Police have reviewed the circumstances around how the operational error with the warrants arose and have agreed measures that have now been put in place to ensure that such an operational error concerning the application for warrants does not happen again.

"Government officials, Law Officers and States of Jersey Police also intend to review the Memorandum of Understanding (MOU) which was agreed at the creation of the Economic Crime and Confiscation Unit (ECCU). This will be jointly commissioned in the near future.

"As the live investigation continues, we are unable to say anything further on this matter."

More detailed analysis of the case to follow for Bailiwick Premium subscribers tomorrow and in the JEP...