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Court Ruling Opens Door for Debt Recovery in Cayman Islands
A recent court ruling has paved the way for debtors in the Cayman Islands to recover debts owed to them by using various enforcement methods. The ruling highlights the importance of understanding the legal framework surrounding charging orders, attachment of earnings orders, and appointment of receivers.
Funding Arrangements
The court’s decision also sheds light on the availability of funding arrangements for parties involved in litigation. While contingency fee agreements are currently not permitted, lawyers may enter into third-party funding agreements subject to certain conditions. The court will consider factors such as:
- The relationship between the funder and the claimant
- The ability of the funder to affect litigation strategy
Criminal Asset Recovery
The Proceeds of Crime Law (2019 Revision) sets out the legal framework for interim measures in criminal asset recovery. The law allows the court to order the restraint of property as an interim measure if sufficient evidence is presented. The court may vary, set aside or make exclusions to the order.
Confiscation
The court’s decision also addresses the confiscation of proceeds from crime. Under the Proceeds of Crime Law, courts have the power to make an order to pay a sum deemed fit if a defendant is convicted of an offence or offences. The benefit figure is calculated by determining whether the defendant has a criminal lifestyle or has benefited from their general criminal conduct.
Agencies
The Royal Cayman Islands Police Service (RCIPS) and customs officers are the main agencies responsible for tracing and confiscating proceeds from crime, in conjunction with the Attorney General or Director of Public Prosecutions. The CIMA, Anti-Corruption Commission, and Financial Reporting Authority can also initiate investigations, including asset tracing.
Secondary Proceeds
The court’s decision notes that there is no distinction under the law between primary and secondary proceeds, and confiscation is possible across all realizable property.
Third-Party Ownership
Property acquired by a third party or close relatives may be considered “tainted” and subject to confiscation. Section 70 of the Proceeds of Crime Law sets out the criteria for determining whether property is a tainted gift.
Expenses
The court’s decision does not address the recovery of costs by state agencies, leaving this aspect unclear.
Value-Based Confiscation
Where the court determines that a defendant has a criminal lifestyle, it may decide the recoverable amount and make a confiscation order requiring payment. The court may also take into account any civil proceedings instituted by victims of an offence.
Burden of Proof
In criminal matters, the burden of proof generally lies with the prosecution. However, once the court has determined that a defendant has a criminal lifestyle or benefited from criminal conduct, the burden shifts to the defendant to prove that property was not acquired through criminal means.
Using Confiscated Property to Settle Claims
The court’s decision notes that confiscated property may be used to satisfy compensation orders granted within criminal proceedings for victims of a crime. However, there is no express power to order that confiscated funds be used to settle civil claims.
The recent court ruling highlights the importance of understanding the legal framework surrounding debt recovery in the Cayman Islands. By using various enforcement methods, debtors may be able to recover debts owed to them and bring justice to those who have been wronged.