What a Restraint Order Really Means — and Why Breaching One Can Make Things Much Worse
A recent court ruling involving the former chief executive of London Capital & Finance has brought an obscure but powerful legal tool back into focus: the restraint order. The Serious Fraud Office confirmed that Michael Thomson and his wife had admitted to multiple breaches of such an order and were held in contempt of court.
The underlying investigation relates to the collapse of London Capital & Finance, which left thousands of investors out of pocket. But the wider significance of the case is not about that collapse itself. It is about how restraint orders work, what counts as a breach, and why courts treat even relatively small violations so seriously.
Most people have never heard of restraint orders until they are suddenly subject to one. Yet for anyone facing a financial crime investigation — or advising someone who is — understanding how they operate can make the difference between preserving legal options and compounding legal trouble.
Why This Matters to You
The case has drawn attention to how restraint orders operate during ongoing financial crime investigations.
Restraint orders are not limited to high-profile fraud cases. They can be imposed early in an investigation, often before charges are brought, and they apply to ordinary people as well as executives.
If you are under investigation for fraud, money laundering, or similar offences — or if you are closely connected to someone who is — a restraint order can affect everyday financial decisions. That includes spending, selling personal property, receiving refunds, or moving money between family members.
What catches many people out is that restraint orders are not just about large transfers or hidden assets. Seemingly minor transactions can still amount to a breach.
How This Affects You in Practice
In practical terms, a restraint order freezes assets to prevent them being dissipated before criminal proceedings conclude. Once in place, it typically restricts what you can spend, sell, or transfer without court approval.
That means:
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selling personal items can be prohibited
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receiving money, including refunds, may require disclosure
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transferring funds to a spouse or family member can trigger scrutiny
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even indirect benefits can count as a breach
In the recent case, breaches included the sale of personal items and the receipt of a holiday refund. The amounts involved were modest, but that did not matter. What mattered was that the transactions took place while a court order was active.
The law does not operate on a “common sense” threshold here. The question is not whether the transaction feels reasonable, but whether it was permitted.
What You Can Do Now
If you are subject to a restraint order, or think one may be imposed, there are some immediate steps that matter:
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Read the order carefully. Do not rely on assumptions or informal advice.
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Do not move or sell assets without clearance. If in doubt, assume it is restricted.
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Keep records of all financial activity. Transparency matters.
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Seek legal advice before making changes. Even routine actions can have consequences.
If you live with or support someone under a restraint order, the same caution applies. Transactions between partners are closely scrutinised, particularly where funds might be seen as indirectly controlled.
What the Law Says
Restraint orders are governed by the Proceeds of Crime Act 2002. Their purpose is to preserve assets so they remain available if a confiscation order is later made.
They are imposed on the basis of suspicion, not proof. The court does not need a conviction to grant one, only reasonable grounds to believe that a defendant has benefited from criminal conduct.
Breaching a restraint order is not a technical oversight. It can amount to contempt of court, which carries serious consequences, including imprisonment. Repeated breaches, or breaches while already under a suspended sentence, are treated particularly harshly.
Importantly, courts expect strict compliance. The burden is on the individual subject to the order to ensure they stay within its terms.
The Bottom Line
Restraint orders are not symbolic. They are one of the strongest tools available to prosecutors, and courts expect them to be taken seriously.
The recent SFO case is a reminder that even small transactions can escalate legal exposure if they breach a court order. Once an order is in place, caution is not optional — it is essential.
If you are affected, the safest approach is simple: assume nothing, check everything, and get advice before acting.
FAQs
What is a restraint order?
A restraint order is a court order freezing assets during a criminal investigation to prevent them being moved or sold before proceedings conclude.
Can I still pay for everyday living expenses?
Often yes, but only within limits set by the court. Spending outside those limits can be a breach.
Do small amounts really matter?
Yes. Courts focus on compliance, not value. Small transactions can still amount to contempt.
Can family members be affected?
Yes. Transfers or shared assets involving spouses or partners are closely examined.
