Introduction

Can a confiscation order be re-opened after the date it was originally made?

We examine the options available to the prosecution and also the steps that can be taken to safeguard the interests of those subject to a confiscation order.

Our expert team of POCA specialists, led by Hamraj Kang, are here to assist you so please feel free to contact us through any of the following:

The Law

Unless the amount found payable under a confiscation order is discharged in full, the acceptance by the prosecution of such smaller amount as it recognises as being the amount immediately available towards discharging the debt does not mean that the defendant is completely relieved of the responsibility to discharge the balance of the debt.  

As part of its deliberations for the amount payable under the confiscation order, the court will have calculated how much the defendant has benefitted from criminal conduct.

This ‘benefit figure’ is frequently much larger than the ‘available amount’ which can be immediately seized to reduce the debt and whilst the prosecution may agree to accept ‘the available amount’ in the short term, should the subject of an order subsequently come into money by, for example, earning unanticipated income from the profits of a new business, inheritance or by winning the Lottery, section 22 of the Proceeds of Crime Act 2002 (“POCA”) permits the prosecution, or a receiver, to apply to increase the amount payable under the order.

If a court receives a request under section 22, it is obliged to re-assess the order to see whether the new assets in the defendant’s possession exceed the original ‘available amount’.

It is important to note that while the court cannot refuse to carry out that assessment, once it has done so it retains a broad discretion to refuse to vary the order or to increase the original figure by any amount which it believes is “just” in the circumstances,  provided it does not exceed the ‘benefit figure’.

This broad discretion has been said to be sufficient, if deployed correctly, to satisfy the requirement of proportionality and the need not to infringe a defendant’s rights under Article 1 of Protocol 1 to the European Convention on Human Rights (“ECHR”).

How Will The Court Exercise Its Discretion?

A non-exhaustive list of factors the court will consider when deciding how best to exercise its discretion was outlined in R v Padda [2014] 1 WLR 1920 (CA) – namely the:

  1. amount outstanding on the order;
  2. additional amount which might now be available;
  3. impact of any further payment; and
  4. time which has elapsed since the original confiscation order was made.

The fact a defendant has subsequently legitimately come into money is no bar to a court ordering a variation (e.g., R v Padda and R v Mundy [2018] 4 WLR 130 (CA)).

While that and the importance of encouraging rehabilitation are additional factors to be taken into consideration, the Court of Appeal recently remarked in R v S [2019] EWCA Crim 569 that generally they both must cede to the “important principle that criminals should be deprived of the proceeds of their crimes”.

The Slip Rule

Before we turn to the procedure which governs section 22 applications and offer some guidance on resisting them, it should be noted that where it comes to light a very short time after the making of the confiscation order that the defendant does in fact enjoy the benefit of further assets, the prosecution may seek, instead, to rely upon section 155 of the Powers of Criminal Courts (Sentencing) Act 2000 – otherwise known as the “slip rule”.

That provision permits a party to return to the same court which imposed the original order within 56 days with the intent to seek the variation or rescission of that order.

The court has a broad discretion under that provision; but while there is no express requirement that the amount be “just” it is submitted that the variation must be proportionate and that broadly the same considerations set out above and below will apply to an assessment under the slip rule.

Procedure For An Application Pursuant to Section 22 POCA

  • An application to increase the ‘available amount’ under a confiscation order can be brought by either the prosecution or a receiver appointed under section 50 of POCA.
  • The amended Criminal Procedure Rules set out the steps which must be followed on an application under section 22.
  • Rule 33.16 provides that there must be a written application and a draft order which may both be accompanied by a witness statement setting out the basis on which variation is sought.
  • The applicant is required to serve those documents on the defendant, the receiver or prosecutor depending on who is making the application, and the court.
  • If the variation is agreed, the court can determine the application without a hearing; but where there is a dispute it must fix a hearing for the matter to be aired.
  • It is important to bear in mind that, despite the application being brought by the prosecutor (or a receiver), the burden of proof remains with the subject of the confiscation order: R v O’Flaherty [2018] EWCA Crim 2828, whomust show, on the balance of probabilities, why the property should not be considered recoverable under the order or why it is unjust to make an upward variation in the circumstances.

Resisting An Application | What Can The Defence Do?

  • It will be seen from the above that the operation of this provision is weighted against defendants and can be unforgiving in its application. There is nevertheless a discretion baked into section 22 and with proper advice and representation it may be possible to resist, in whole or in part, an application to increase the amount payable under a confiscation order.
  • Putting aside any potential technical arguments pursuant to either section 22 or CPR Rule 33.16, in most cases defence submissions will hinge on whether there are factors which require the court to exercise its discretion and find that it is unjust to grant the application.
  • The first question to ask, in this connection, is whether the nature of the asset or money and the circumstances in which it was obtained render it unjust to increase the amount payable under the original order. As already explained, the fact that any the asset was subsequently obtained in wholly legitimate circumstances is no bar to the court granting a section 22 application. Indeed, applications have been granted where defendants have started a successful business, come into their inheritance following the death of a family member, or won the lottery.
  • However, that is not to say that the provenance of the assets or the circumstance in which they were obtained is wholly irrelevant. In R v John [2014] 2 Cr App R (S) 73 (CA) the prosecution sought to increase the ‘available amount’ to reflect the receipt by the defendant of a substantial award of damages following a road traffic accident. The court at first instance allowed the application but that decision was overturned, in part, on appeal and it was held that a distinction could properly be drawn between general and special damages. The latter, the court held, should not be included because they amounted to money he would require to pay necessary expenses associated with his injuries and it would, therefore, be unjust to order them to be forfeited. The facts of the case are specific, but Supperstone J offered some general guidance when he added that in cases where a defendant will not be receiving a “windfall” the court must give particularly anxious consideration to the question of whether it is just to increase the order.
  • The next and, perhaps, most important factor is the passage of time. It is well-established that Article 6 of the ECHR requires that proceedings against a defendant be brought within a reasonable time. The clock for these purposes starts running from the commencement of the original pre-confiscation criminal proceedings brought against the defendant: Saggar [2005] EWCA Civ 174. However, the courts will not lightly refuse an application unless there has been an unreasonable and unexplained delay. Indeed, in R v S, the court increased an order in the face of an eleven year gap between the original order and the application. Notwithstanding the lengthy delay in that case, some assistance can be gleaned from remarks made by the judge at first instance – quoted with approval by the Court of Appeal – that there will come “a point where the passage of time becomes a very powerful or even decisive argument against the making of any recalculation under section 22.” When, exactly, that point in time is remains unclear and is likely to be context-dependent.
  • A further matter of some importance to the exercise of the court’s discretion is the amount of money the prosecution is seeking to include under the increased order. In circumstances where the value of the newly available assets is small, but the stakes are comparatively high for the defendant, the court will look carefully before ordering confiscation. Likewise, if the amount outstanding on the order is minimal but allowing the application would have a disproportionately negative effect on the defendant’s finances it may be unjust to grant the application. 

The above provides an indication of the matters the court may take into account in a given case. However, as the Court of Appeal stressed in R v Padda, it is a non-exhaustive list and courts considering such applications have a broad discretion to consider any factors relevant to the question of whether the order would be just in the circumstances. 

Recent Developments

This section provides a brief overview of some recent legislative and judicial developments which affect the operation of section 22.

Change to section 24(6) POCA

The Criminal Finances Act 2017 (“CFA 2017”) introduced a raft of changes to POCA, including an amendment to section 24(6). That provision provides that the fact that a confiscation order has been discharged no longer prevents the prosecution from seeking to increase the available amount.

While this is an unfortunate development for those subject to confiscation orders, the fact that the original order was discharged and the circumstances which led to that development will still constitute relevant considerations for the court when considering whether it is “just” in all the circumstances to vary the order.

R v Cole [2018]

In a separate development, the question recently arose as to the proper approach when considering an historic confiscation order in which the ‘benefit figure’ was not calculated in a proportionate manner.

The original order in R v Cole [2018] Lloyds FC 321 (CA) – a mortgage fraud case – was based on the value of the fraudulent mortgage advances themselves and was substantially in excess of being a Waya-compliant figure. The judge decided nevertheless to permit an application to increase the available amount almost up to the total amount of that original figure.

On appeal, that decision was quashed and it was held that one could not pretend as though R v Waya was never decided – the correct benefit figure was the total amount, less the mortgages.

The ruling is useful for those subject to pre-2012 confiscation orders as any application to vary will give rise to a need to re-evaluate the original figures as the variation must be framed within the bounds of what would, today, be considered a proportionate and properly calculated benefit figure.  

R v S

A further case of note R v S discussed above in relation to the passage of time.

The case is also of interest in relation to the relevance of any assistance the defendant has provided to the prosecution. The appellant in that case, following his conviction, had acted as an undercover intelligence source providing valuable information and assistance to the police.

Simon LJ held that where a defendant has supplied information to the authorities, particularly in the form of a witness statement or other evidence which is admissible in court, such action will constitute a compelling consideration when assessing whether it is just to permit the application to vary.

However, the court will also consider the terms on which assistance was given and whether the defendant was in receipt of any payment for the service rendered which could result in them receiving a ‘windfall’.

What Does The Future Hold? 

There has been a recent upsurge in activity in relation to the operation of section 22 – both at first instance and in the appellate courts. The use of this tool is only likely to increase as it offers the prosecution a swift and cost-effective means of obtaining additional funds by wringing existing confiscation orders to maximise recovery.   

For these reasons, it is more important than ever that those defending such applications understand what factors will have the most weight when the court decides whether to exercise its discretion.

Looking to the future, while it is clear that the courts have so far been careful not to hem themselves in by providing guidance which is too rigid or formulaic, it is hoped that in time additional assistance will be offered as to the circumstances in which particular factors will render an order “unjust”.

For example, when, if not eleven years after the original order, the passage of time alone will become so potent as to render it unjust to permit a variation; or what weight will now be attributed in the assessment to a decision by the court to wholly discharge the original order after the introduction of the CFA 2017?

How Can We Help? | Kangs POCA Defence Solicitors

Kangs Solicitors is able to assist clients with the full array of both criminal and civil investigations and court proceedings relating to POCA.

Our team is recognised as a national leader in the areas of asset forfeiture and POCA work, with our solicitors recognised in both the leading legal directories namely the Legal 500 and Chambers UK.

Please feel free to contact our expert solicitors through any of the following:

Hamraj Kang
hkang@kangssolicitors.co.uk
07976 258171 | 020 7936 6396 | 0121 449 9888

John Veale
jveale@kangssolicitors.co.uk
0121 449 9888 | 07989 521 210

Tim Thompson
tthompson@kangssolicitors.co.uk
0121 449 9888 | 020 7936 6396 | 07989 521210

Amandeep Murria
amurria@kangssolicitors.co.uk
020 7936 6396 | 0121 449 9888