Confiscation proceedings

Confiscation proceedings follow conviction for offences where it is alleged that there has been a financial benefit from the offending. The legislation detailing the procedure in confiscation proceedings is now found in the Proceeds of Crime Act 2002 for all offences which post-date 24 July 2002. The following is intended as a short guide for those subject to confiscation proceedings. Confiscation law is complicated, and it is important that you take expert legal advice at the earliest opportunity.

Following conviction for any offence where it is assumed that there has been a financial benefit from the offending, the Court must ask itself the following questions (as per the guidance of the House of Lords in R v May [2008] UKHL 28):

Has the defendant benefitted from his crime?
If so, what is the value of his benefit?
What sum is recoverable from the defendant?

The first question ought to be a simple one to answer, but the law relating to the assessment of benefit and the recovery of assets is highly complex. The following is merely a summary.

Benefit from ‘particular criminal conduct’ is merely a calculation of the sum acquired by the defendant in the course of his offending. Thus, in simple terms, if a defendant is convicted of stealing £50,000 then the benefit from his particular criminal conduct is £50,000.

However, if he is deemed to have a ‘criminal lifestyle’, triggered by the type of the offence, the number of offences or frequency of offending (as per section 75 of the Proceeds of Crime Act 2002), the Court is required to make certain statutory ‘assumptions’ about income and the acquisition of assets and the burden of proof switches to the Defendant to disprove them.

The prosecution will assert its calculation of benefit in a document which is known as a ‘section 16 statement’ and the defendant should respond to that by submitting what is known as a ‘section 17 statement’.

The available amount is the amount of assets available to the defendant. If this amount is less than or equivalent to the benefit figure then a confiscation order will be made in the available amount. If the available amount is greater than the assessed benefit then a confiscation order will be made in the amount of assessed benefit. It is irrelevant how the defendant acquired any asset. Confiscation is a value-based exercise. If assets are given away, or sold at an undervalue, then they many form part of this assessment as ‘tainted gifts’.

A confiscation order will be made at the conclusion of the confiscation proceedings. The defendant will be ordered to pay a fixed sum based on the above calculations.

At the same time as making the confiscation order, the court will set a ‘default’ custodial sentence.  This will be activated in the event of a confiscation order being unpaid.  Such a sentence is served in addition to any custodial sentence imposed for the offence.  The level of a default sentence will principally be determined by the value of the confiscation.  There are statutory maximum default sentences, ranging from six months for a £10,000 confiscation order to 14 years for a confiscation order that exceeds £1 million.

You will be ordered to pay the confiscation order within 3 months.

The Court has a discretion to extend the time to pay the confiscation order but only up to a maximum of six months from the date of the original order. You must make this application prior to the expiry of the three months.

You will be summonsed to appear at Magistrates Court’ for what is known as an enforcement hearing. The Magistrates will decide whether to impose the default term of imprisonment, whether to give you further time and to examine other available options for enforcement.  The sum outstanding will start to accrue interest at the penal rate of 8% per annum.

Confiscation orders can also be enforced by the appointment of a receiver to liquidate assets.  A restraint order may also be imposed (or continue if already in force), pending satisfaction of the confiscation order.

In limited circumstances this might be possible (for example, where the value of assets has changed).  Your solicitor should be able to advise you on this.  The prosecution can also seek to apply to vary a confiscation order, where the available amount has increased.