On 7 April, the Court of Appeal handed down judgment in NCA v N and Royal Bank of Scotland plc  EWCA Civ 253. The appeal raised an important point of public interest: whether, and if so, in what circumstances, the court can disapply the consent regime under the Proceeds of Crime Act 2002. The Court of Appeal allowed the appeal against several interim orders made by Burton J compelling RBS to execute payment instructions. Nicholas Medcroft appeared for RBS.
N is an authorised payment institution. It held a number of bank accounts with RBS. RBS suspected that the credit balance on certain of those accounts constituted criminal property. It froze those accounts and, in compliance with POCA, sought and received the consent of the NCA to return the funds in the accounts to N. Meanwhile, N commenced proceedings for an interim mandatory injunction requiring the bank to operate N’s accounts by carrying out specified past payment instructions. Burton J ordered that RBS make the specified payments and also declared that in so doing the bank “will not commit any criminal offence under the Proceeds of Crime Act 2002 or otherwise” and that it is “not obliged to make any disclosure as would or may be required by the Criminal Law or any other law”.
The Court of Appeal held that the statutory procedure is highly relevant to the exercise of the court’s discretion to grant such relief. Parliament’s statutory scheme, which represents a “workable” and “reasonable” balance of conflicting interests in the fight against money laundering, cannot be displaced merely on consideration of the balance of convenience as between the interests of the private parties. Cases justifying such intervention are likely to be exceptional, for example, demonstrable bad faith by the bank.
The Court accepted RBS’s and the NCA’s submissions that (a) Bank of Scotland v A Ltd  1 WLR 751 needs to be considered with caution and cannot be regarded as providing general guidance (b) there was insufficient evidential basis for the Judge to have concluded that N’s accounts were free of criminal property and (b) mandatory injunctive relief compelling RBS to execute payment instructions should not have been granted.
Nicholas Medcroft (who did not act below) acted for RBS, instructed by Dentons UKMEA LLP
Philip Moser QC and Imogen Proud (who did not act below) acted for the National Crime Agency
Paul Downes QC and Joseph Sullivan acted for N, instructed by Howard Kennedy LLP
A copy of the Judgment is here .