Who’s Who Legal brings together three leading experts to face questions concerning legal developments and increasing areas of work in the field, as well as the skills required of an asset recovery practitioner.
Paul Gully-Hart: The situation remains unchanged in Switzerland. There has been some discussion in Swiss political circles on the possibility of introducing a class action in Switzerland, basically to protect consumers. Draft legislation is under consideration but is still in the preliminary stages. However, there is a relatively strong chance that class actions will eventually be introduced in Switzerland.
It is also noteworthy that the Swiss Parliament is considering new legislation designed to facilitate the repatriation of looted assets, ie, the proceeds of “grand corruption”. The new draft legislation presents several interesting (but controversial) features, namely: there will be no more statutes of limitations for seizing, confiscating and repatriating the proceeds of corruption committed abroad; if certain requirements are met, the proof of the unlawful origin of the assets will be facilitated by reversing the burden of proof (it will be up to the defendant to prove that specific assets originate from lawful transactions); and the Swiss government (as opposed to the courts) will take an upper hand in freezing the assets and interacting with the foreign state.
Fernando González: The Spanish Criminal Code was recently modified to introduce changes to the rules of forfeiture. There have been three major changes. First, expanding confiscation to cases in which there is sustained criminal activity in the time from which it may derive significant economic benefits. Second, confiscation without condemnatory judgment is introduced for cases where prosecution of the accused party is not possible for a long period of time and there is a danger of application of status of limitation. Finally, the possibilities of confiscation have been extended to the property of third persons who have benefited from the crime.
Jeff Lane: The legal position in Hong Kong relating to the recovery of assets relies upon well-established common law remedies of which, in recent years, there has been little if any substantive change. Most recently, in 2010, a change was made to the High Court Ordinance to introduce new legislation to allow injunctions and the appointment of receivers in support of foreign litigation and arbitration.
Previously, the position had been that in the absence of the substantive claim in Hong Kong, and notwithstanding that assets may be present within the jurisdiction, it was not possible to seek injunctive relief. This was following the Privy Council decision in Mercedes Benz v Leiduck  AC 284. Following the enactment of Section 21M, it is now possible for the High Court to grant injunctions in support of foreign litigation and arbitration, provided that there are assets within the jurisdiction, and that there are no other good reasons (for example public policy issues such as multiple damages) that would otherwise render such injunction inequitable.
Paul Gully-Hart: The potential for forum shopping is rather limited in Switzerland, because we have relatively rigid rules on jurisdiction. In addition, Switzerland is bound by the jurisdictional rules of the so-called Lugano Convention with all members of the EU (plus Norway, Iceland and Liechtenstein). However, parties to commercial agreements still have the possibility of choosing their jurisdiction by inserting a “jurisdiction clause” in the agreement.
According to our general experience, the United Kingdom is considered to be an attractive jurisdiction, because of the powerful tools that English law provides to claimants who have good arguable claims (worldwide freeze orders; extensive disclosure orders; proprietary claims, Norwich Pharmacal orders, etc). In addition, the jurisdiction of the English court will rest on an analysis of what is just and convenient in the case at hand, thus providing the English court with a greater flexibility (than for instance a Swiss court) to establish jurisdiction over defendants. If the defendants hold assets in Switzerland but there is a sufficient link to UK jurisdiction, a successful strategy might be to initiate proceedings in England and then to use those proceedings as a support to freeze/seize the Swiss assets of the defendants.
Fernando González: The recent reform of the Spanish Criminal Code might encourage victims to initiate criminal proceedings in Spain, given the increased possibilities of confiscation and that these proceedings could be more agile than civil seizure. Nevertheless, it will depend on the Spanish authorities to agree with the victims the enforcement procedure of the confiscated assets so that they could recover their prejudices. In my experience there should not be any obstacle for that.
Jeff Lane: Hong Kong is a regional hub for import/export and is recognised as a world market for purposes of international trade. The Hong Kong Courts are fully conversant with the principles established by Spiliada and Adhiguna Meranti and are regularly called upon to resolve forum issues. As Hong Kong offers consistent standards of justice, and its judgments are recognised in many overseas jurisdictions, it is more often a jurisdiction of first choice rather than one from which parties attempt to resile.
The Courts of England and Wales are considered by some litigants to be preferable in terms of cost and expedience, to Hong Kong, particularly where the defending party may have commercial connections to Europe. In most cases, however, contacting parties are free to legislate for their own governing law and jurisdiction clauses which are generally recognised within the jurisdiction to give effect to the parties’ intended dispute resolution provisions.
In terms of jurisdictions taking steps to encourage international litigants to use their Courts, an obvious example would be Singapore. The Singapore International Commercial Court in Singapore opened for business in January 2015 and now offers specialist facilities intended to attract cases which are “of an international and commercial nature” and which are transferred thereto by agreement of the parties, or by the Singapore High Court at its own discretion. In circumstances where the Singapore Courts themselves might decline jurisdiction, the SICC Court offers an alternative forum in lieu of recommencing litigation in a foreign jurisdiction at the conclusion of a successful forum challenge.
Paul Gully-Hart: In Switzerland, the answer is affirmative. The Swiss authorities have a proactive policy of assisting foreign nations in recovering the proceeds of so-called “grand corruption”. Legal mechanisms exist under Swiss law to freeze (often quite speedily and efficiently) assets that are suspected of being the proceeds of corruption or graft practices. This in turn gives rise to litigation which might involve foreign states, or the victims of corruption-related offences as well as third parties whose assets have been frozen and who claim that they acted in good faith. Such litigation is relatively complex and time-consuming.
Fernando González: According to the latest public surveys in Spain, corruption is the main concern for Spanish citizens. A new fraud is publicised in the press or related news almost every day, although in reality it is likely that fraud is not as rife as the papers report. Nevertheless, the focus remains on eradicating corruption and new laws are expected to be enacted. Considering this, our Public Prosecutors are more focused on national corruption than corruption coming from developing countries.
Jeff Lane: In Hong Kong, the answer is affirmative. The Hong Kong authorities are recognising the proactive policy in China of clamping down upon those responsible for corruption. For the first time, Chinese authorities are looking to work not only with other governments, but also with professional practitioners for purposes of recovery of monies from those who have embezzled them and absconded.
Thus far we have not seen a great deal of this litigation filtering through intra private practice in Hong Kong, but it is anticipated that the victims of such offences and those who have received funds from corrupt parties will likely come to litigation in due course.
Paul Gully-Hart: In my view, the qualities that are required from an asset recovery lawyer are the following:
• responsiveness: in this particular field, time is usually of the essence and lawyers must be prepared to act speedily and efficiently;
• coordination skills: asset recovery litigation is often multi-jurisdictional and requires the ability to cooperate/coordinate with a team of other lawyers in other jurisdictions; this requires an understanding of different legal cultures;
• analytical skills: in this particular field, lawyers are often required to analyse a complex set of facts and to choose between several legal/procedural options; and
• leadership: lawyers who take the lead of international teams need to display leadership qualities, not only by taking the appropriate decisions but also by showing respect and deference to foreign colleagues with regard to their own procedures and courts.
Fernando González: First, a good knowledge of the civil and criminal rules governing recovery; and second, to have experience in such matters. It is also very important to know the tools that are available to locate property in Spain, and to have a network of contacts with banks and financial institutions that can help to facilitate rapid freezing of assets. A good lawyer specialising in recovery should be able to act with speed and agility. Finally, a factor that does not depend on the will of the lawyer is luck in being able to find a court to issue freezing orders that is fast and not overloaded with work.
Jeff Lane: The following qualities are required of an asset recovery lawyer/expert:
• A sense of urgency: in all fraud and tracing recovery matters time is of the essence and can mean the difference between a successful or unsuccessful recovery. It is essential that the fraud lawyer responds quickly and efficiently to any request for assistance.
• International connections: the majority of high-value frauds are multi-jurisdictional in nature. It is helpful for a fraud practitioner to understand the differences between civil and common law jurisdictions and the remedies available; it is equally important that he or she is familiar with their international counterparts in other key jurisdictions. (Membership of international organisations such as FraudNet assists in this regard.)
• Focus and flexibility: it is important for a fraud lawyer to be able to recognise a particular style of fraud from its constituent facts, and to advise on the available means of achieving the remedies and outcome required. This can often require an immediate analysis of complex facts to guide the victim to the best of several alternatives available, with urgent applications for injunctive relief to follow thereafter.
• Leadership skills: in many fraud situations, the fraud lawyer will be the sole legal representative acting on behalf of the victim within his jurisdiction and must be able to act as an effective contributing member of an international team offering a combination of support and leadership to those engaged in the multi-jurisdictional aspects of the fraud. This will apply both in terms of requesting assistance to support your own case, and providing support for foreign jurisdictions.
• Advocacy: although not essential, a strong advocate will be better able to lead his team through having direct connections to clients and direct access to the courts. The time and cost saved in instructing a barrister may then be applied to the benefit of the fraud investigation and asset recovery exercise.