20.12.2006

2tg wins landmark judicial review of SOCA's decisions

Bulletin: Successful judicial review of SOCA's refusal to grant consent to banking transactions

Summary

On 15th March 2007 the Court of Appeal held that a decision by SOCA whereby it refused to re-consider its earlier withholding of consent under section 335 of POCA 2002 was unlawful. This appears to be the first ever successful judicial review of a decision by SOCA in the context of banking and money laundering. It is a major development in demonstrating that traders whose banks are frozen may be able to achieve redress through public law means.

Detail

UMBS, an online banking facility, had all of its transactions frozen following a SAR made by its bank. SOCA refused to grant consent in respect of those transactions. As a result UMBS and many of its clients faced financial ruin. UMBS requested that SOCA re-consider its decision. SOCA's response was that it would not revisit the withholding of consent unless a request was made by the bank and there had been a change in circumstances. Paul Downes, Peter de Verneuil Smith and Helen Wolstenholme represented UMBS. After permission for judicial review was refused at first instance, the Court of Appeal found that the approach taken by SOCA was unlawful and directed that SOCA urgently re-consider its refusal to grant consent.

This is a ground breaking decision which demonstrates that the public law route may be an appropriate means of unlocking frozen bank accounts. Upon re-consideration SOCA continued to refuse to grant consent. The case continues.