The National Crime Agency (NCA) is being sued for £220m in damages by the Israeli tycoon Israel Perry, who claims that his UK and his worldwide assets were illegally frozen.
Last month the NCA abandoned its claim against Mr Perry and has paid his legal costs of £3.3m, which are likely to reach £7m. Now the agency has been accused of acting “unlawfully” in freezing assets that prevented Mr Perry from pursuing investment opportunities, notably a £550m scheme to develop Camden Lock, according to a High Court writ.
The NCA’s predecessor, the Serious Organised Crime Agency (Soca), obtained a High Court Order to freeze his UK and worldwide assets, which included £10m houses in South Street, Mayfair, £5.2m worth of art, and £6.5m in London bank accounts. These assets were frozen because Soca alleged they were derived from over-charging from a pension scheme for life insurance, for which Mr Perry was convicted in Israel.
But when Mr Perry appealed against the freezing order, the Supreme Court in this country ruled that it was illegal for Soca to seize his possessions outside the UK. Lord Phillips concluded: “The High Court has no jurisdiction to make a recovery order in relation to property outside England and Wales. It follows that the court had no jurisdiction to make the worldwide property freezing order that was made in this case”
Soca responded by persuading Parliament to grant it new powers in the Crime and Courts Act 2013, which enables it to pursue assets outside the UK. This was designed to reverse the impact of this Supreme Court ruling. Lawyers argue that these powers, first revealed by The Independent, are significant because oligarchs and wealthy individuals who own assets in the UK could have their worldwide assets frozen by the UK authorities.
The Soca investigation into Mr Perry also received a setback in 2011 when the Israeli Supreme Court ruled that the amounts charged to the pensioners for life insurance was not stolen money.
In response, Soca filed a new lawsuit against Mr Perry. But last month this claim was abandoned, one day before the agency was due to provide details of what it believed to be the amount that was overcharged by Mr Perry and to trace that money to particular assets. “The NCA needs to address the issue of why it pursued the case after the judgment in Israel was overturned”, Trevor Asserson, the lawyer for Mr Perry, told The Independent.
Now Mr Perry is suing the NCA for “loss and damage” of income and investment opportunities. He claims he was forced to withdraw from deals because all his money was tied up by the freezing order. But a spokesperson for the agency said: “The NCA is vigorously defending this speculative application. The process is subject to ongoing litigation and therefore it would be inappropriate to comment further”.
Mr Perry is also actively pursuing the identity of the unnamed Israeli lawyer who advised the NCA and provided expert reports during Mr Perry’s case in support of the freezing order. Unusually, the NCA has always kept the name of the Israeli lawyer secret but his identity is likely to emerge if this case proceeds to trial.
The collapse of the Mr Perry case – a humiliation for the NCA – has thrown the new powers to freeze worldwide assets into disarray and has major implications for the way in which the agency operates. It also has important consequences for other oligarchs with UK assets: if the NCA were to seek to freeze their worldwide assets, then the freezing order could well be overturned on appeal.