A guide to confiscation proceedings
The purpose of confiscation proceedings is to deprive a defendant of the financial benefit obtained from his criminal conduct. The Proceeds of Crime Act 2002 [POCA] is the main legislation underpinning the confiscation process.
Confiscation proceedings are treated as part of the sentencing of the defendant and the regime is draconian with the burden invariably on the defendant to establish the legitimacy of his assets in the face of prosecution assertions and statutory assumptions.
The ‘benefit’ obtained by a defendant is defined either in terms of a specific crime or based on a judgement that he has lived a criminal lifestyle. A defendant is judged to have led a ‘criminal lifestyle’ if he has committed certain offences (such as money laundering or drugs supply), or multiple offences. In the case of a ‘criminal lifestyle’ case statutory assumptions are applied meaning the defendant’s assets and expenditure over the previous six years can be included in the benefit calculation.
If the Court decides that the defendant has benefited from particular criminal conduct or general criminal conduct, it must assess the ‘recoverable amount’. This is an amount equal to the defendant’s benefit from the conduct concerned. If the defendant shows that the ‘available amount’ is less than that benefit obtained, then the recoverable amount will be assessed as the available amount or a nominal amount if the amount available is nil. The available amount is calculating by adding the total of all the defendant’s assets (at the time the confiscation order is made) minus the value of any obligations that have priority and the total value (at the time the order is made) of any tainted gifts.
If an order is unpaid within a set date (up to 6 months of the order being made), the defendant faces a prison sentence. Even if a default term is served, the amount owed is not extinguished and continues with interest accruing at 8%. The confiscation amount and its interest can be pursued indefinitely against the defendant until it is discharged by full payment. The defendant can, in limited circumstances, apply to the Court for a ‘certificate of inadequacy’ to discharge the order; while the prosecution, regardless of whether or not a confiscation order has been made, may apply within six years of the date of conviction for the Court to reconsider a decision not to make an order, or to reassess the defendant’s benefit and/or the available amount.
For the uninitiated, confiscation proceedings can appear daunting but we have extensive expertise to provide crucial advice at every stage of the process. Following a relevant conviction, the Crown Court sets a timetable for the proceedings with the first step typically being the direction for the defendant to serve on the Court and prosecution a section 18 POCA statement detailing his financial circumstances. The prosecution must respond with a section 16 statement of information detailing their assertions regarding the extent of the defendant’s benefit and assets. This will be accompanied by witness statements and documents supporting any assertions. The defendant will reply by serving a section 17 statement setting out the extent to which he accepts each assertion and the particulars of any matters he proposes to rely on. If no agreement can be negotiated between the parties over the benefit figure and available amount, the Court will determine the extent of the defendant’s financial benefit and the recoverable amount to be confiscated at a final hearing after considering evidence from the defendant and any experts or third parties.
Given that a proportion of the confiscated funds can be recouped directly by the prosecuting authorities, it is perhaps not surprising that individuals often face inflated assertions in respect of the alleged benefit figure and that their available assets are overestimated. We methodically examine and aggressively challenge the veracity of every prosecution assertion and regularly instruct drug experts and forensic accounts to ensure we establish the legitimate provenance of our clients’ assets to the maximum extent possible under the law. In this way we have achieved considerable successes in reducing the figures the prosecution have sought to confiscate.
Confiscation cases can involve complex, technical areas of law, such as the ‘corporate veil’, or fine arguments surrounding the wholesale or street value of drugs but we have the experience to ensure quality representation is provided whatever the issues raised. In addition, we never fail to remind the prosecution of their disclosure obligations which can prove telling in the final analysis of the disputed figures. From the outset though, our early representations can prove effective in challenging the proceedings as confiscation is not always appropriate or cost effective.
If you are subject to a Restraint Order, we can act to vary or discharge the order to allow you and your business to continue as normally as possible during a criminal investigation.
Please contact David Bloom on 020 7471 9157 for further information on how we can help you.
Certificates of Inadequacy
Magistrates Cash Forfeiture