Confiscation Orders – an overview

Introduction

I recently wrote a blog on compensation orders and indicated that there would be follow-on articles on two further topics – confiscation orders and social housing fraud in the context of shared ownership properties. It is the former topic I now seek to address in this article.

The modern manifestation of confiscation powers are to be found in the Proceeds of Crime Act 2002 (“POCA”), which came into force on 24 March 2003. Typically, Lord Bingham was able to explain POCA’s purpose succinctly when he said in R v May [2008] 1 AC 1028:

” The legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have retained such benefit, within the limits of their available means. It does not provide for confiscation in the sense understood by schoolchildren and others, nor does it operate by way of fine. “

Confiscation orders can only be made by the Crown Court at first instance.

POCA

Section 6

As noted in the introduction, the relevant legislation for confiscation orders is Part 2 of the Proceeds of Crime Act 2002. This provides, at section 6, that:

(a) when a defendant has been convicted of an offence in the Crown Court, or is committed there from the magistrates’ court for sentence in respect of certain specified offences (or for POCA purposes – see section 70); and

(b) the Prosecutor asks the court to proceed under section 6, or the Court “believes it appropriate for it to do so“

then the court on the balance of probabilities:-

First, must decide whether the defendant has a criminal lifestyle;

Second, if it decides that the defendant has a criminal lifestyle, it must decide whether they have benefited from their general criminal conduct. If it decides that the defendant does not have a criminal lifestyle it must then decide whether they have benefited from their particular criminal conduct.

Criminal Lifestyle

‘Criminal lifestyle’ is defined at section 75:

Criminal Lifestyle – section 75(1)A defendant has a criminal lifestyle if (and only if) the following condition is satisfied.

(2)The condition is that the offence (or any of the offences) concerned satisfies any of these tests –

(a)it is specified in Schedule 2; or

(b)it constitutes conduct forming part of a course of criminal activity; or

(c)it is an offence committed over a period of at least six months and the defendant has benefited from the conduct which constitutes the offence.

(3)Conduct forms part of a course of criminal activity if the defendant has benefited from the conduct and—

(a)in the proceedings in which he was convicted he was convicted of three or more other offences, each of three or more of them constituting conduct from which he has benefited, or

(b)in the period of six years ending with the day when those proceedings were started (or, if there is more than one such day, the earliest day) he was convicted on at least two separate occasions of an offence constituting conduct from which he has benefited.

(4)But an offence does not satisfy the test in subsection (2)(b) or (c) unless the defendant obtains relevant benefit of not less than £5000.

(5)Relevant benefit for the purposes of subsection (2)(b) is—

(a)benefit from conduct which constitutes the offence;

(b)benefit from any other conduct which forms part of the course of criminal activity and which constitutes an offence of which the defendant has been convicted;

(c)benefit from conduct which constitutes an offence which has been or will be taken into consideration by the court in sentencing the defendant for an offence mentioned in paragraph (a) or (b).

(6)Relevant benefit for the purposes of subsection (2)(c) is—

(a)benefit from conduct which constitutes the offence;

(b)benefit from conduct which constitutes an offence which has been or will be taken into consideration by the court in sentencing the defendant for the offence mentioned in paragraph (a).

Statutory assumptions

If a Defendant is found to have a criminal lifestyle the court will make certain statutory assumptions, unless the assumption is shown to be incorrect, or there would be a serious risk of injustice if it were to be made (see section 10).

The assumptions are broadly to the effect that any property received or held by the defendant from certain times prior to the criminal proceedings commencing (6 years) was obtained from or met by their general criminal conduct.

Making the order

If the court decides there has been such a (criminal) benefit then they generally must (again, on the balance of probabilities and if it is proportionate to do so) make a confiscation order and decide the recoverable amount: see section 6(5).

The word ‘generally’ is used because of the court believes that the victim has or will seek to recover their losses through the civil route, or an unlawful profit order has been or may be made, then a confiscation order is discretionary: section 6(6)(6A).

The amount a defendant will be ordered to pay will be the same as the amount of the benefit figure unless they show, and the burden is on them, that the assets available to them are less than this: section 7. 

Other Matters

1. A defendant can be given up to 6 months (exceptionally 12 months): see section 11.
2. Interest will be charged on unpaid confiscation orders: see section 12.
3. The court may imprison a defendant for default of a compensation order (the court will have set such a default provision): see section 38.

Conclusion

Last year saw a good example of a confiscation order in respect of a sub-letting offence. Jeremy Matuba pleaded guilty to three criminal offences under the Fraud Act 2006 related to the subletting of his local authority home, and providing false information on two right to buy applications. A confiscation order under POCA was made against Mr Matuba last September for £147,998.97.

Finally, the Home Office has asked the Law Commission to review the confiscation regime in the POCA, and the Commission aim to publish a consultation by September 2019.