Introduction

In Jersey, it is a criminal offence to take possession or in any way administer the movable estate of a deceased person before a grant of probate has been obtained (the intermeddling offence). Her Majesty's attorney general (HMAG) is responsible for deciding whether to commence criminal proceedings in Jersey, including for the intermeddling offence. The need to comply with Jersey's probate requirements was underscored by the recent conviction of two financial services firms for intermeddling.

With effect from April 2020, HMAG has issued revised guidelines(1) relating to the intermeddling offence that:

  • clarify when the registrar of probate must refer a case of suspected intermeddling to HMAG; and
  • provide additional clarification, specific to financial services businesses, on the public interest factors that HMAG will apply when deciding whether to prosecute.

While the guidelines do not suggest a 'sea change' in terms of HMAG's approach to criminal proceedings for the intermeddling offence, they do give a helpful indication of the issues and risks on which HMAG will focus when deciding whether to prosecute (and potentially in any prosecution).

Intermeddling offence

Unlike the United Kingdom, Jersey imposes criminal liability on those who intermeddle in relation to a deceased's 'movable estate' (ie, personal or movable property). Article 23(1) of the Probate (Jersey) Law 1998 sets out the offence as follows:

if any person, other than a person acting in accordance with Article 19(3) or any other enactment, takes possession of or in any way administers any part of the movable estate of a deceased person without obtaining a grant, the person shall be guilty of an offence and liable to a fine or to imprisonment for a term not exceeding 12 months or to both.

The intermeddling offence can therefore capture (among others) persons who, in the absence of a Jersey grant, administer:

  • all of the assets that comprise a Jersey-domiciled person's movable estate; or
  • the Jersey situs assets of a non-Jersey domiciled person (the scenario in the two convictions discussed below).

However, Article 23(2) provides the following carve-out from the offence:

No person shall be guilty of an offence by reason only of the fact that the person has made arrangements for disposing of the body of the deceased person in any manner authorized by law or custom or from placing in safe custody or otherwise preserving the movable estate of the deceased. (Emphasis added.)

There is limited case law in Jersey on the precise scope of the intermeddling offence. There have been only two reported prosecutions for the intermeddling offence – namely, AG v Abu Dhabi Commercial Bank PJSC, Jersey Branch ([2018] JRC 192) and AG v Standard Bank Jersey Limited ([2019] JRC 156). Both resulted in the conviction of a Jersey banking institution for paying away deceased clients' funds before a Jersey grant had been obtained. The substantial fines of £25,000 and £35,000 reflect the seriousness with which the Royal Court views compliance with Jersey's probate requirements.

General guidance

The guidelines make clear that the registrar of probate must make a referral if any of the following conditions are met (and it is reasonable to infer that these factors will carry significant weight when HMAG is deciding whether to prosecute a suspected intermeddling offence):

  • The amount concerned exceeds £10,000.
  • Numerous persons are entitled to a share of the estate and their interests have been prejudiced by the intermeddling.
  • The intermeddler is a member of a profession and such membership suggests awareness of either the requirements under the Probate (Jersey) Law 1998 or the likely existence of such requirements.
  • The intermeddler appears to have acted in bad faith.
  • The intermeddling came to light through a person other than the intermeddler.

As regards the third condition above, many regulated financial institutions will likely have difficulty arguing that they should not have been aware of the existence of probate requirements. It follows that an institution can act in good faith but still face potentially severe criminal penalties.

HMAG has also set out a list of factors which, if all met, do not require the registrar of probate to notify HMAG – namely:

  • the amount concerned is less than £10,000;
  • the intermeddler acted in good faith and without ulterior motive;
  • the beneficiaries have indicated their approval; and
  • the offender had no prior experience of legal matters and must have (in effect) self-reported.

It can be inferred that HMAG is excluding from view only those cases where the offender has the lowest level of fault.

Guidance specific to financial services businesses

HMAG has previously published a code that sets out the approach to decisions to prosecute generally. By way of the new guidelines, HMAG has further clarified the factors that will be considered when deciding whether to prosecute a financial services business for the intermeddling offence – namely:

  • the trigger event for the payment away of the deceased's movable estate was a decision taken by a bank or financial institution in another jurisdiction over which the Jersey bank or financial institution had no control;
  • the estate which has been subject to an alleged act of intermeddling comprises complex asset structures held in multiple jurisdictions;
  • the alleged intermeddling took place as the direct result of an act by an automated system; and
  • the alleged intermeddling took place as the direct result of an unavoidable manual error by a bank or financial institution in Jersey.

These factors suggest that HMAG's focus will be on the extent to which the firm is at fault for what happened. This is consistent with the code, which gives as other relevant factors:

  • the fact that the offence was committed as the result of a genuine mistake or misunderstanding; and
  • whether the defendant has put right the loss or harm caused.

It is reasonable to infer that only those firms with the lowest level of fault can have any degree of reassurance that they will not face prosecution.

Comment

Firms must ensure that they comply with all applicable legal and regulatory requirements, including the intermeddling offence. It would be prudent for firms (particularly regulated financial services businesses) to:

  • ensure that they have implemented appropriate systems and controls to ensure compliance with Jersey's bespoke probate requirements; and
  • test these to ensure that they are effective in practice.

In the absence of appropriate systems and controls, a firm that commits the intermeddling offence faces a real risk of criminal prosecution and the risk that the court decides that it must impose increasingly hefty fines to deter future misconduct.

Endnotes

(1) The guidance is available here.