Fraud, Asset Tracing & Recovery 2022/2023 ' Jersey (Commercial Dispute Resolution, CDR)

• Published date: 13 April 2022
• Subject Matter: Finance and Banking, Litigation, Mediation & Arbitration, Criminal Law, Technology, Financial Services, Arbitration & Dispute Resolution, White Collar Crime, Anti-Corruption & Fraud, Fin Tech
• Law Firm: Carey Olsen
• Author: Mr Marcus Pallot, Richard Holden and Daniel Johnstone

This guide explores the latest legislative, regulatory and enforcement developments in Jersey, and provides expert analysis on industry-wide topics.

1. EXECUTIVE SUMMARY

Jersey is a well-developed offshore financial services centre, jealously proud of its international whitelisting and scrupulous to avoid becoming a treasure island into which fraudulent proceeds may be buried. Its historic independence from the UK and English law, but receptiveness to its influence, allows it judiciously to adopt, adapt and advance appropriate remedies despite a lack of historical domestic precedent for them, including to freeze assets and yield up information from its well-regulated financial services sector.

2. IMPORTANT LEGAL FRAMEWORK AND STATUTORY UNDERPINNINGS TO FRAUD, ASSET TRACING AND RECOVERY SCHEMES

Jersey's legal system is a hybrid, characterised by little statutory provision but with a receptive and adaptive approach to rules and remedies fashioned elsewhere in England and other offshore centres.

Jersey is not part of the UK, but was part of the French Duchy of Normandy which began its close association with the English crown when William of Normandy crossed the Channel to take it. As a result, English law was never formally transplanted into Jersey. Instead, Jersey law's roots lay historically in the law of the Duchy of Normandy, which was itself heavily influenced by the customary law of northern France. Jersey formally split from Normandy in 1204 and, as an island, proceeded to develop its own insular law and institutions, including its own courts (now the Royal Court) and legislature (the States). It continued to look closely to Norman law as its principal influence, including Norman law writers of the 16th and 17th Centuries.

Such writers remain authoritative, not least given the dearth of local written sources, as reasoned judgments were not given until the late 20th Century and the only truly local sources are two Island legal writers of the 17th Century and one of the early 20th Century (1940s) - all three still writing in French. The gaps between these writers, insular and peninsular, were filled (like Manx "breast law") by the know-how carried in the heads of the Island's advocates - limited to six in number - as to the practice of the Royal Court, giving the Island a truly customary as opposed to written law.

Jersey's modern legal framework underpinning fraud, asset tracing and recovery cases has evolved from this background under the particular impetus of two important phases. First, in the aftermath of the Second World War, French ceased to be the language of legal practice, and the Royal Court was reorganised into its modern shape by the Royal Court (Jersey) Law 1947. Secondly, in the 1980s, Jersey began its modern development as an international finance centre: by this time, the last vestiges of French training of any advocates and thus judiciary had all but disappeared. As a result, the Royal Court and Jersey law began to resemble and adopt English approaches to issues, while retaining some characteristic procedures, the most important of which, in fraud and asset tracing cases, relate to the method of commencing proceedings and procedure for ex parte injunctions, described further below.

The Royal Court (Jersey) Law 1947 provides for the constitution of the Royal Court. It is presided over by a judge - the Bailiff, Deputy Bailiff or a Commissioner. Also sitting with the judge are (typically) two jurats, a characteristically Channel Island office. The jurats are permanent lay appointees to the court who rotate - as do the judges - between different matters. In addition to presiding over proceedings, the judge is the judge of law, including procedure and costs. The jurats are the judges of fact, damages and (in criminal matters) decide the sentence: if they are split, the presiding judge has a casting vote.

The Royal Court Rules 2004 ("RCR") are the current rules of civil procedure governing civil court processes. Unlike other English-speaking offshore centres, Jersey has not adopted the UK Civil Procedure Rules 1998 ("CPR") or rules based on them wholesale, although an overriding objective and revised summary judgment procedure were introduced in 2017. Nor are the RCR a comprehensive procedural code. Instead, the RCR reorganise the Jersey procedural approach by grafting certain English procedural approaches onto (now largely forgotten) traditional Jersey approaches, together with Jersey-specific provisions. Subject to 2017 amendments, and judicial receptiveness to modern English CPR case law (even where there is no corresponding RCR), the RCR remain an amalgam of such traditional Jersey provisions, some of the RSC, and some of the CPR, with many gaps to be filled by practice and judicial development.

The Court of Appeal (Jersey) Law 1961 established a Court of Appeal, in place of appeal within the Royal Court to a larger bench. The Court of Appeal is modelled on the English Court of Appeal and sits in benches of three. It has no permanent judges but draws on a panel of judges from the courts of Jersey, Guernsey and the Isle of Man, in addition to English and Scottish QCs. An appeal to the Court of Appeal is a review, generally on a point of law, and generally as of right from final judgments and with leave from interlocutory orders. Appeal from the Court of Appeal lies to the Privy Council, with leave: it is from Jersey's right of appeal to the Monarch in Council that the wider Judicial Committee of the Privy Council evolved.

As a result of the above, Jersey's procedure overall resembles the modern English procedure moving through key stages of pleading, discovery, exchange of written witness evidence and trial by the adversarial presentation of cases. It does not have as detailed a code of procedural or substantive law, nor as developed a history of particular remedies and practices. However, it more than makes up for this by being unburdened with certain procedural histories or hidebound orthodoxies (such as the availability of equitable versus legal remedies, or jurisdictional limitations on injunctive relief), and has shown itself to be not only receptive but flexible in developing (principally) English remedies to ensure remedies are available for frauds, thus minimising the need for statutory intervention.

Apart from the...