POCA: Major changes now in force

Major amendments to the Proceeds of Crime Act 2002 were brought in force by the implementation of the Serious Crime Act 2015, and amendments to the Policing and Crime Act 2009 and the Crime and Courts Act 2013 all of which came into effect on 1 June 2015. A draconian piece of legislation just got more draconian. Some of the amendments are almost eye watering and their supposed practical effect simply does not reflect the realities faced by criminal lawyers routinely engaged in the application and enforcement of confiscation orders. The idea that there are thousands of criminals languishing in prison instead of using concealed assets to repay confiscation orders is frankly delusional and the amendments made to the Act appear to be nothing more than political window dressing. The simple fact of the matter is that they are likely to lead to further injustice and further extensive litigation in the Appellate Courts of this country which had just started to get to grips with the sharper edges of the current regime.

Third Party Interests

 Sections 1-4 of the Serious Crime Act 2015 permit a Crown Court to determine third party interests in realisable assets at the first instance stage. Prosecutors and Defendants are now required to exchange information about third party interests and there are restrictions against the right of appeal against such determinations by a Crown Court judge. The current regime (determination at enforcement stage) will apparently remain in force for more complicated issues.

Time for Payment

Confiscation orders will become payable on the day that they are made and the Court can only grant an extension if satisfied the defendant is unable to comply. That discretion will be limited to situations where assets need to be realised and then only for 3 months. A subsequent application can be made but only up to six months as opposed to the current 12. It is difficult to understand the logic behind legislation that permits only a maximum of six months to effect the marketing and sale of a property followed by a conveyancing transaction . Surely, this will simply result in extensive litigation before the Magistrates Court on enforcement.

Compliance Orders

Section 7 of the Serious Crime Act 2015 provides the Crown Court with additional new powers designed to secure compliance with a confiscation order. So now extending beyond sentence and confiscation orders, a Judge will be at liberty to impose restrictions on travel, the surrender of a passport or any other such order he "considers appropriate" to secure compliance with the Order. The mind boggles as to the potential scope of such an Order.

Default Sentences

Default sentences have been 'simplified' and made longer. So there is a new scale which is less complicated but provides for longer sentences ranging from 6 months to 14 years and ending automatic release at the halfway point for orders in excess of £10 million. For those practitioners that believe the current "hidden assets" regime can lead to serious injustice this is very concerning. Effectively, it has the propensity to change the entire dynamic of defending of serious fraud cases. For example, a defendant charged with cheating the revenue in a case where benefit substantially exceeds £10 million and there is the potential for a hidden assets finding, the consequential sentence could be one of 28 years (14 plus 14) with potential to serve up to 21. In effect, a life sentence. Plainly, there must be strong deterrent sentences to prevent the commission of serious fraud but that must be coupled with a more realistic approach to the idea that the defendants are able  to effectively conceal millions of pounds of assets and just spend time in prison (sometimes an extra 5 years) so they don't have to give them up. There are more than adequate provisions already contained within POCA to deal with that situation in any event.

Restraint Orders

Restraint Orders have been made easier to obtain by lowering the threshold from 'belief' to 'suspicion' but the Crown Court will now have a monitoring power where investigations drag on and on (as they invariably do these days) and even impose reporting requirements on the enforcement agency. Restraint Orders can now remain in force where convictions are quashed and retrials ordered and their potential life is extended to ensure legal aid contributions and costs orders are paid following satisfaction of a confiscation order.

Anticipatory Seizure

The cash detention provisions have seemingly been extended to cover items of value. This is not precisely how the new legislation reads but an officer may now seize property (think cars, watches, jewellery, furniture etc) if he suspects it might otherwise be made unavailable for satisfying a confiscation order. He can detain it for 48 hours and then he can go to a Magistrates Court and ask for a further period of detention where no application for a Restraint Order is made. Anybody who can recall how quickly the original cash detention provisions were extended will understand precisely what is likely to happen here.

Administrative Forfeiture of Cash

Now the onus is on the respondent/interested party to indicate that he objects to the forfeiture of cash otherwise it will take place without a hearing. Yes, without a hearing.

Other provisions

Other provisions include:

• Giving victim surcharge orders priority over confiscation
• Discharging confiscation orders where defendants have died
• Tightening up on confiscation against absconding defendants
• Extending power to seize money from banks to satisfy confiscation orders
• (Not yet in force) giving power to Magistrates to make confiscation orders
• Extending powers to permit the search of vehicles for cash
• Extending the scope of civil recovery investigations

The Home Office Circular explaining the amendments can be found here (Home Office Circular Amendment of the Proceeds of Crime Act)