In January 2025, the Serious Fraud Office (“SFO”) secured its first-ever Unexplained Wealth Order (“UWO”) in a landmark case involving a £1.5 million property owned by Claire Schools, ex-wife of convicted fraudster Timothy Schools. [1] This move marked a significant development in the UK’s efforts to combat financial crime and recover assets purchased with the proceeds of illicit activities.
UWOs offer an alternative strategy for piercing the veil of wealth: by transforming wealth itself into evidence, they shift the balance of power back to law enforcement.
The judgment granting the Order, which was published on 13 May 2025, gives insight into the conditions upon which an application can be granted and outlines the criteria law enforcement must meet when seeking recovery of fraud-related assets. [2]
But the question remains: are UWOs just another headline-grabbing tool or will they become a lasting force for accountability?
What is an Unexplained Wealth Order?
UWOs were introduced in the UK Criminal Finances Act 2017, which amended the Proceeds of Crime Act 2002 to create an investigative tool to recover assets purchased with the profits of illicit activity. UWOs shifted the burden onto the respondents of the orders to provide detailed explanations of how they acquired high-value assets. Should a respondent fail to comply with the order, the asset is considered “recoverable property” for civil recovery purposes.
Whilst the National Crime Agency has made limited but high-profile use of UWOs, the SFO had, until recently, relied on other investigative powers. Notably, the National Crime Agency was ordered to pay £1.5 million in legal costs after the discharge of its UWO targeting relatives of the former Kazakh president. This was a high-profile setback that contributed to the perception that UWOs were a high-risk tool with limited practical use.
By contrast, the SFO’s recent success represents a more cautious and strategic application of the power. In this instance, the UWO was sought post-conviction and in circumstances where traditional mechanisms may not have provided sufficient information about the origin of high-level assets. This significantly reduced the risks associated with the application, as did the fact that the respondent was not a politically exposed person. This approach demonstrates how UWOs can be deployed to support asset recovery efforts while minimizing legal risk.
Background to the Investigation – Axiom Legal Financing Fund
The circumstances of the UWO itself relate to the SFO’s investigation into Axiom Legal Financing Fund, a Cayman-registered investment vehicle, and its manager, Timothy Schools. A former police officer turned solicitor, Schools was convicted of orchestrating a £100 million investment fraud.
Set up in 2009 by Schools and business partner David Kennedy, Axion Legal Financing Fund was pitched to investors as a vehicle to finance “no win, no fee” legal cases being pursued by reportedly reputable UK law firms. The fund’s marketing claimed projected returns of up to 11% and a purported 95% success rate in the funded cases, attracting over £100 million of investment from around 500 investors.
However, Schools was found to have diverted nearly £20 million of investor funds to law firms – that he either owned or controlled – without investors’ knowledge. Rather than financing legal cases, funds were used for personal gain, including the purchase of a £5m fishing and shooting estate, a fleet of luxury sportscars, and a private box at Blackpool FC’s stadium. To simulate promised returns, Schools and Kennedy engaged in a Ponzi scheme, the “utterly dishonest” [3] use of new loans to repay old ones.
The fraud was uncovered after the fund collapsed in 2012, leading to investor losses of over £100 million and the abandonment of cases for around 35,000 legal clients. Schools was found guilty on three counts of fraudulent trading, one count of fraud by abuse of position, and one offence of transferring criminal property, and sentenced to 14 years in jail in August 2022. He was found in a confiscation hearing in January 2025 to have benefited by over £146 million but had only £1 million of available assets. In June 2024, following a trial, his partner Kennedy was sentenced to eight years.
The SFO’s Application
More than two years after his conviction, the SFO obtained its first UWO against Schools’ former wife, Claire Schools.
The UWO compelled Ms. Schools to explain the source of funds used for the purchase and renovation of Hope Spring House, a £1.5 million Lake District property. As the SFO alleged that the property was funded via the proceeds of the Axiom Legal fund, the order formed part of a broader effort to identify and recover assets stemming from the fraud.
During the High Court hearing seeking the approval of the UWO, the SFO alleged that:
- Despite divorcing in 2016, Timothy and Claire Schools continued to live together until his conviction.
- Claire Schools continued to be listed on his prison record as his next of kin, common law wife, and partner.
- Claire Schools could demonstrate little personal income herself. The purchase of Hope Springs House appeared to have been funded via the sale of a French chalet owned by a French property company jointly owned by Timothy and Claire Schools; a chalet, that itself was paid for by companies associated with the Axiom Legal fraud.
In his 11-page judgment, Mr. Justice Pepperall considered the criteria for granting a UWO, as outlined by Proceeds of Crime Act 2002:
- There is reasonable cause to believe that the respondent “holds” property with a value greater than £50,000;
- There are reasonable grounds for suspecting that the known sources of the respondent’s lawfully obtained income would have been insufficient for the purpose of enabling [the respondent] to obtain the property, or that the property was obtained through unlawful conduct; and
- There are reasonable grounds for suspecting that the respondent or someone connected to the respondent is or has been involved in serious crime.
Whilst it is not alleged that Claire Schools was involved in her former husband’s criminal activity, the Court found that each of the criteria was satisfied in this case. In particular, the judgment held that the SFO’s case successfully proved the reasonable grounds that her lawfully obtained income was insufficient to fund the purchase of Hope Springs House.
Notably, the Court also approved the SFO’s request for an interim freezing order against the property, to avoid the “real risk that the proceeds of sale will simply be dissipated in supporting [the respondent’s] lifestyle.”
Implications for Proceeds of Crime Investigations
From an investigator’s perspective, the requirement to demonstrate that legal sources of income were insufficient to explain ownership of the relevant asset is the most striking. In general, this requires presenting a combination of positive evidence linking the asset to suspected illicit funds, and negative evidence showing the absence of lawful means to acquire such wealth outside the alleged criminal conduct.
Obtaining evidence that an asset was purchased by illicit means, or demonstrating reasonable grounds to suspect it, requires reconstructing long chains of transactions and cash movements, often spanning years: a challenge even in the best-case scenario, when complete and accurate financial records are readily available. Often, this is the most significant component of financial investigations, as “following the money” is vital to drawing investigative conclusions.
Profiling the wealth of a subject, or those related or connected to the subject, can be a question of “unknown unknowns”. High-value frauds are often perpetrated by individuals with obtuse personal profiles, who make use of complex financial arrangements, such as offshore structures, trusts, and networks of associated companies in challenging jurisdictions. Such investigations often hit a roadblock where sources of relevant funds, whether legitimate or not, are unknown or unclear.
In these circumstances, investigative tools like production or disclosure orders may fall short, as they typically require a degree of specificity about the information sought. UWOs, however, are particularly valuable in cases where the financial picture is fragmented or deliberately concealed.
In any case, the UWO against Claire Schools represents the SFO’s shift to more active asset-recovery tactics and may set a precedent for other agencies, such as the NCA and HM Revenue & Customs, to revisit dormant investigations or initiate new ones where asset ownership is opaque or suspect. It also puts foreign and domestic criminals on notice: the UK is serious about chasing down illicit funds.
[1] Ex wife of jailed solicitor Timothy Schools is subject of SFO’s first unexplained wealth order | Law Gazette
[2] Director of the Serious Fraud Office v Claire Schools [2025] EWHC 1146 (Admin) | The National Archives
[3] ‘Utterly dishonest’ Axiom fund solicitor jailed for fraud | Law Gazette
