CONFISCATION – HISTORY
The confiscation provisions of the Drug Trafficking Act 1994 and Criminal Justice Act 1988 have been repealed and replaced by Part 2 of the Proceeds of Crime Act 2002. as from 24/3/2003; however, continuing to have effect where the provisions of the 2002 Act mentioned in articles 3 and 5 do not have effect. It follows that the provisions of the 1988 Act will continue to operate for an indefinite period. (Ref to technical case of … re time limits – no longer the law)
The law on the “recovery” of the ”Proceeds of Crime” – is often hard to explain to clients, since it is “draconian” in intention, and (rather than construing such legislation strictly, as used to be the law) the courts have until recently enthusiastically endorsed wide interpretations.
Put simply, everything owned received or spent by a “lifestyle criminal” during the previous 6 years IS THE PROCEEDS OF CRIME until the criminal proves otherwise; since judges tend not to believe anything criminals say, defendants are sometimes find it hard to provide such proof. EXPERT ACCOUNTANCY EVIDENCE MAY BE ESSENTIAL.
Note that it does not matter if a particular asset can be shown to be lawfully obtained. Once the “benefit” figure has been calculated, ALL ASSETS can be confiscated ( “recovered” ) up to that amount.
STAGE 1 – Proof of crime
All offences of supplying drugs are “lifestyle” offences
Cash – Cash in large quantities may be prima facie evidence that it is of unlawful origin, but it may be possible to show that cash was required for use in other countries:- [1]
STAGE 2 – amount of “benefit”
= value of property received,
Including drugs and other property not lawfully saleable (but cf Stage 3)
No deduction for expenses (but cf Stage 3, unless “hidden assets” assumed)
No deduction for joint ownership – Chrastny
– but mere courier (not being a principal) only receives his wage
There are some technical cases about import duty.
STAGE 3 – Realisable assets
Interests in property, trust property, pensions, debts, wills:
If a defendant proves that it is impossible to realise an asset, what is contended as its value cannot be included in the defendant’s recoverable amount: see, e.g.,
Houssam Ali [2002] EWCA Civ 1450 (but burden on D to PROVE NOT RECOVERABLE)
Chen [2009] EWCA Crim 2669 at paragraph 27. – pension policies constitute free property. The appellant does not dispute that. It is property because the defendant has an interest in it; it is free because there is no order in force with respect to it within the meaning of section 82. But what is its value? There are two authorities which bear upon the question of how policies of this nature should be valued. In R v Cornfield [2007] 1 Cr App R(S) 124 this court had to determine how to treat a pension policy which, as in this case, could only be realised at a future date, …purpose is to confiscate that which a defendant is able to realise. It must be realisable in some real way. Although it could extend to a contingent beneficial interest under a will (see the decision of Walbrook v Glasgow (1994) 15 Cr App R(S) 873), it does not, in our judgment, extend to the putative possible future receipt of a lump sum pension payment which could not be used as security for a loan; which, if it were paid, would go to the trustee in bankruptcy; and when the real possibility of the appellant borrowing money with reference to it was zero. On that analysis, the pension payment, its value or any value with reference to the possibility of a lump sum payment, was not part of the amount that might be realised at the time the order was made against the appellant …. it is not legitimate to treat the underlying value of the fund as the value of the asset. Ford was a different case. It was under a different statutory regime. The policy in that case had a surrender value, which this one does not
R v Ford [2008] EWCA Crim 966, – how to value three pension policies. The fund value in these policies was nearly £80,000, although only 25% could be taken by way of a lump sum on realisation. There was in that case, however, a surrender value of around £17,500 which could be immediately realised. The polices could not be assigned, whether by way of sale or otherwise. The judge fixed the value as the full fund value of the polices. The defendant appealed and submitted that it should be the surrender value. He relied upon the analysis of the court in Cornfield. This court (Hallett LJ, Openshaw and Blair JJ) rejected that submission. It is plain that they did so for policy reasons. They were concerned that if the sum was limited to £17,500, the defendant would be able to borrow that money from a member of his family or friends in order to meet the terms of the order. In those circumstances he would retain his interest in the asset which in due course would be worth £80,000. The judgment, given by Openshaw J, continued as follows:
“13. It seems to us that on the facts of this case the appellant simply has not proved that he could not raise the money in question and so he has not proved in relation to these particular pension figures that his realisable assets are less than his benefit. There is no injustice in this since, if he is right and if he has to surrender the policies in an attempt to raise the money to discharge his liability under the confiscation order, and if he can only raise the cash in surrender value, he can then come back to the court and seek a Certificate of Inadequacy under section 83 of the Criminal Justice Act 1988 on the basis that his assets were overvalued. He will then have been stripped of his assets and will not come out of prison with an £80,000 nest egg waiting for him. The social policy of the Act will therefore have been achieved.”
A factual feature sometimes overlooked is where there are young children residing in a matrimonial home. It is a principle of property law that “trusts for the sale of land” may have the duty or power of sale deferred to allow the purpose of the trust to be fulfilled – ie in this case to “provide a home for the children of the family until they reach (18)
Confiscation, especially Enforcement of confiscation orders, is hard to understand:-
Theoretically the criminal has REALISABLE ASSETS to the amount of the order; however, since the Courts have (until recently – [2]
a) been overenthusiastic in adopting the “draconian – and meant to be” dictum of ______ in invoking the statutory assumptions;
b) adopt the definition that “benefit” does not mean “profit”
c) merely paid lip-service to the statutory words “unjust”
d) frequently find as a matter of fact that there are “hidden assets”
this is often not the case, and the convict cannot pay.
If the civil
CONFISCATION ORDERS – ENFORCEMENT
ARCHBOLD 2011
5-597
POCA 35. Enforcement as fines
(1) This section applies if a court –
(a) makes a confiscation order, … .
(2) Sections 139(2) to (4) and (9) and 140(1) to (4) of the Sentencing Act (functions of court as to fines and enforcing fines) apply as if the amount ordered to be paid were a fine imposed on the defendant by the court making the confiscation order.
(3) In the application of Part 3 of the Magistrates’ Courts Act 1980 to an amount payable under a confiscation order –
(a) ignore section 75 of that Act (power to dispense with immediate payment);
(b) such an amount is not a sum adjudged to be paid by a conviction for the purposes of section 81 (enforcement of fines imposed on young offenders) or a fine for the purposes of section 85 (remission of fines) of that Act;
(c) in section 87 of that Act ignore subsection (3) (inquiry into means).
[This section is printed as amended by the SCA 2007, ss.74(2) and 92, Sched. 8, paras 1 and 19, and Sched. 14.]
For section 139 of the Act of 2000, see ante, §5-396. As to fixing the default term, see, in particular, R. v. Price (Simon) ([2009] EWCA Crim 2918), ante, §5-342, and R. v. Pigott (Stephen Michael) ([2009] EWCA Crim 2292), ante, §5-409.
5-396
Powers of Criminal Courts (Sentencing) Act 2000, ss.139, 140, 142
Miscellaneous powers and duties of Crown Court in relation to fines etc.
139. Powers and duties of Crown Court in relation to fines and forfeited recognizances
(1) Subject to the provisions of this section, if the Crown Court imposes a fine on any person or forfeits his recognizance, the court may make an order –
(a) allowing time for the payment of the amount of the fine or the amount due under the recognizance;
(b) directing payment of that amount by instalments of such amounts and on such dates as may be specified in the order;
(c) in the case of a recognizance, discharging the recognizance or reducing the amount due under it.
(2) Subject to the provisions of this section, if the Crown Court imposes a fine on any person or forfeits his recognizance, the court shall make an order fixing a term of imprisonment or of detention under section 108 above (detention of persons aged 18 to 20 for default) which he is to undergo if any sum which he is liable to pay is not duly paid or recovered.
(3) No person shall on the occasion when a fine is imposed on him or his recognizance is forfeited by the Crown Court be committed to prison or detained in pursuance of an order under subsection (2) above unless –
(a) in the case of an offence punishable with imprisonment, he appears to the court to have sufficient means to pay the sum forthwith;
(b) it appears to the court that he is unlikely to remain long enough at a place of abode in the United Kingdom to enable payment of the sum to be enforced by other methods; or
(c) on the occasion when the order is made the court sentences him to immediate imprisonment, custody for life or detention in a young offender institution for that or another offence, or so sentences him for an offence in addition to forfeiting his recognizance, or he is already serving a sentence of custody for life or a term –
(i) of imprisonment;
(ii) of detention in a young offender institution; or
(iii) of detention under section 108 above.
(4) The periods set out in the second column of the following Table shall be the maximum periods of imprisonment or detention under subsection (2) above applicable respectively to the amounts set out opposite them.
Table
An amount not exceeding GBP200 7 days
An amount exceeding GBP200 but not exceeding GBP500 14 days
An amount exceeding GBP500 but not exceeding GBP1,000 28 days
An amount exceeding GBP1,000 but not exceeding GBP2,500 45 days
An amount exceeding GBP2,500 but not exceeding GBP5,000 3 months
An amount exceeding GBP5,000 but not exceeding GBP10,000 6 months
An amount exceeding GBP10,000 but not exceeding GBP20,000 12 months
An amount exceeding GBP20,000 but not exceeding GBP50,000 18 months
An amount exceeding GBP50,000 but not exceeding GBP100,000 2 years
An amount exceeding GBP100,000 but not exceeding GBP250,000 3 years
An amount exceeding GBP250,000 but not exceeding GBP1 million 5 years
An amount exceeding GBP1 million 10 years
(5) Where any person liable for the payment of a fine or a sum due under a recognizance to which this section applies is sentenced by the court to, or is serving or otherwise liable to serve, a term of imprisonment or detention in a young offender institution or a term of detention under section 108 above, the court may order that any term of imprisonment or detention under subsection (2) above shall not begin to run until after the end of the first-mentioned term.
(6) The power conferred by this section to discharge a recognizance or reduce the amount due under it shall be in addition to the powers conferred by any other Act relating to the discharge, cancellation, mitigation or reduction of recognizances or sums forfeited under recognizances.
(7) Subject to subsection (8) below, the powers conferred by this section shall not be taken as restricted by any enactment which authorises the Crown Court to deal with an offender in any way in which a magistrates’ court might have dealt with him or could deal with him.
(8) Any term fixed under subsection (2) above as respects a fine imposed in pursuance of such an enactment, that is to say a fine which the magistrates’ court could have imposed, shall not exceed the period applicable to that fine (if imposed by the magistrates’ court) under section 149(1) of the Customs and Excise Management Act 1979 (maximum periods of imprisonment in default of payment of certain fines).
(9) This section shall not apply to a fine imposed by the Crown Court on appeal against a decision of a magistrates’ court, but subsections (2) to (4) above shall apply in relation to a fine imposed or recognizance forfeited by the criminal division of the Court of Appeal, or by the Supreme Court on appeal from that division, as they apply in relation to a fine imposed or recognizance forfeited by the Crown Court, and the references to the Crown Court in subsections (2) and (3) above shall be construed accordingly.
(10) For the purposes of any reference in this section, however expressed, to the term of imprisonment or other detention to which a person has been sentenced or which, or part of which, he has served, consecutive terms and terms which are wholly or partly concurrent shall, unless the context otherwise requires, be treated as a single term.
(11) Any reference in this section, however expressed, to a previous sentence shall be construed as a reference to a previous sentence passed by a court in Great Britain.
[This section is printed as amended by the Constitutional Reform Act 2005, s.40(4), and Sched. 9, para. 69; and as amended, as from a day to be appointed, by the CJCSA 2000, s.74 and Sched. 7, para. 193 (omission of italicised words in subss. (2) to (5)).]
fulltext05-397
140. Enforcement of fines imposed and recognizances forfeited by Crown Court
(1) Subject to subsection (5) below, a fine imposed or a recognizance forfeited by the Crown Court shall be treated for the purposes of collection, enforcement and remission of the fine or other sum as having been imposed or forfeited –
(a) by a magistrates’ court specified in an order made by the Crown Court, or
(b) if no such order is made, by the magistrates’ court by which the offender was committed to the Crown Court to be tried or dealt with or by which he was sent to the Crown Court for trial under section 51 [or 51A] of the Crime and Disorder Act 1998,
and, in the case of a fine, as having been so imposed on conviction by the magistrates’ court in question.
(2) Subsection (3) below applies where a magistrates’ court issues a warrant of commitment on a default in the payment of –
(a) a fine imposed by the Crown Court; or
(b) a sum due under a recognizance forfeited by the Crown Court.
(3) In such a case, the term of imprisonment or detention under section 108 above specified in the warrant of commitment as the term which the offender is liable to serve shall be –
(a) the term fixed by the Crown Court under section 139(2) above, or
(b) if that term has been reduced under section 79(2) of the Magistrates’ Courts Act 1980 (part payment) or section 85(2) of that Act (remission), that term as so reduced,
notwithstanding that that term exceeds the period applicable to the case under section 149(1) of the Customs and Excise Management Act 1979 (maximum periods of imprisonment in default of payment of certain fines).
(4) Subsections (1) to (3) above shall apply in relation to a fine imposed or recognizance forfeited by the criminal division of the Court of Appeal, or by the Supreme Court on appeal from that division, as they apply in relation to a fine imposed or recognizance forfeited by the Crown Court; and references in those subsections to the Crown Court (except the references in subsection (1)(b)) shall be construed accordingly.
(5) A magistrates’ court shall not, under section 85(1) or 120 of the Magistrates’ Courts Act 1980 as applied by subsection (1) above, remit the whole or any part of a fine imposed by, or sum due under a recognizance forfeited by –
(a) the Crown Court,
(b) the criminal division of the Court of Appeal, or
(c) the Supreme Court on appeal from that division,
without the consent of the Crown Court.
(6) Any fine or other sum the payment of which is enforceable by a magistrates’ court by virtue of this section shall be treated for the purposes of the Justices of the Peace Act 1997 and, in particular, section 60 of that Act (application of fines and fees) as having been imposed by a magistrates’ court, or as being due under a recognizance forfeited by such a court.
[This section is printed as amended by the Constitutional Reform Act 2005, s.40(4), and Sched. 9, para. 69; and as amended, as from a day to be appointed, by the CJCSA 2000, s.74 and Sched. 7, para. 194 (omission of italicised words in subs. (3)); and the CJA 2003, s.41, and Sched. 3, para. 74(1) and (4) (omission of italicised words in subs. (1) and insertion of words in square brackets).]
Useful Websites:-
The Criminal Procedure Rules 2010 Part 56 – Confiscation and proceedings under the Criminal Justice Act 1988 and the Drug Trafficking Act 1994 (into force on 05 April 2010 ) available for downloading in Word and PDF formats.
The Criminal Procedure Rules 2010 Part 58 rules applicable only to confiscation proceedings (into force on 05 April 2010) available for downloading in Word and PDF formats.
The Criminal Procedure Rules 2011 Part 59 rules applicable only to confiscation restraint procedings
The Criminal Procedure Rules 2011 Part 60 Proceeds of Crime Act 2002: rules applicable only to receivership proceedings
The Ministry of Justice website area containing the complete Criminal Procedure Rules, the Consolidated Criminal Practice Direction and Forms is:-
Please note that the Criminal Procedure Rules pages are not updated with amendments until they have actually come into force. This means that The Criminal Procedure Rules 2011 will not appear on the website until 3rd October, 2011.
The website also contains the current forms for use in the criminal courts. See:-
What’s New? The regularly updated Ministry of Justice web-page for the Criminal Procedure Rules is:-
The Statutory Instrument, ‘The Criminal Procedure Rules 2011’ can be viewed at:-
