The SFO and UWOs: A New Focus?
28 January 2025
Dan Hudson of Seladore Legal assesses the Serious Fraud Office’s first Unexplained Wealth Order, highlighting its potential for asset recovery while questioning its effectiveness as a timely remedy for victims of financial crime.
The Serious Fraud Office (SFO) recently secured its first-ever Unexplained Wealth Order (UWO) against Claire Schools, the ex-wife of solicitor Timothy Schools, who was convicted of large-scale fraud in 2022. This milestone highlights UWOs as a potential tool for post-conviction asset recovery and raises questions about their broader utility in tackling financial crime and asset tracing.
UWOs, introduced into the Proceeds of Crime Act (POCA) in 2017 under the Criminal Finances Act, aim to expose “dirty money” by requiring individuals to justify the legitimacy of their assets. They target high-value property disproportionate to declared income, often linked to politically exposed persons (PEPs) or their associates, and reverse the burden of proof, placing responsibility on asset holders to demonstrate lawful origins.
Initially, UWOs were seen as a key tool for scrutinising assets held by individuals from jurisdictions with weak rule of law. However, their use has been limited—prior to the Schools case, UWOs were deployed exclusively and sparingly by the National Crime Agency (NCA) and primarily against assets linked to overseas public officials. Their application also raised concerns about retrospective powers, particularly where ownership predated the alleged criminal conduct, and the challenges of securing evidence from foreign jurisdictions.
The SFO’s use of its first post-conviction UWO reflects a more targeted approach, mitigating some of the risks of legal challenges while reinforcing a broader enforcement strategy to recover criminal assets. That the SFO is using another tool in a creative way to pursue its aims is to be applauded.
However this ‘new’ use of UWOs as a tool following lengthy investigations and criminal trials underlines their limitations as far as seeking redress for victims is concerned. The primary value of UWOs was envisioned as their pre-emptive power to disrupt ongoing criminal activity. In cases like that of Schools, where convictions take years to secure, UWOs are less about swift intervention and more about incremental (and painstaking) recovery efforts after lengthy investigations and trials.
The Schools case highlights this issue, with proceedings spanning over a decade before reaching the stage where asset recovery through a UWO became feasible. Even at this stage, respondents may contest orders in court or seek to dissipate assets, further delaying enforcement outcomes.
The SFO’s first UWO signals an intent to use all available means to recover assets diverted by financial crime. By placing UWOs at the tail end of protracted legal processes, their effectiveness as a timely remedy for victims or claimants is much reduced, leaving questions about whether UWOs can evolve into a meaningful part of the recovery toolkit.
Ultimately, while UWOs may play a role in recovering assets in certain cases, they seem likely to remain an occasional, high-profile tool rather than a transformative recovery solution for victims of financial crime.