The Supreme Court considers confiscation orders

The Supreme Court has today handed down judgment in R v Andrewes [2022] UKSC 24. The facts of the case concerned the defendant making, on his CV, a number of false or dishonestly inflated and misleading statements about his educational qualifications and experience in his application for a role (which he was ultimately appointed to and, seemingly, he carried out his duties extremely well and satisfactorily).

He was prosecuted and pleaded guilty to three counts, including obtaining a pecuniary advantage by deception contrary to s.16(1) of the Theft Act 1968 and fraud by false representation under the Fraud Act 2006. He was sentenced to two years’ imprisonment for those offences. 2018 confiscation order proceedings in the Crown Court made an order of over £96,000 (i.e. 15% of his earnings during the employment period).

The point of law certified by the Court of Appeal, who allowed the defendant’s appeal as they found the confiscation order to be disproportionate, was:

“Where a defendant obtains remuneration as a result of or in connection with an offence of fraud based upon the obtaining of employment by false representations or non- disclosure, in what circumstances (if any) will a confiscation order based on the wages earned be disproportionate within the terms of section 6(5) of the Proceeds of Crime Act 2002, or contrary to Article 1, Protocol 1 of the European Convention on Human Rights?”

As the Supreme Court’s case summary recorded:

“Section 6(5) of the Proceeds of Crime Act 2002 provides that, if Court has decided that the defendant benefited from the relevant wrongdoing or conduct then it must make a confiscation order requiring the defendant to pay the recoverable amount of that benefit, but that the requirement to make a confiscation order applies “only if, or to the extent that, it would not be disproportionate to require the defendant to pay the recoverable amount.” This appeal concerns the meaning of “disproportionate” in the context of that provision.”

The Supreme Court allowed the CPS’s appeal and took a “middle way” to the confiscation order and its quantum (the court also, with the agreement of the parties, found that there should be no linked compensation order). It reviewed the cases on the correct approach to disproportionality and confiscation orders (paras. 28-37 of the Judgment) and concluded:

“45. In our view, the answer in principle is that, at this stage in the analysis, where one is considering proportionality, the relevant benefit from the fraud that it is proportionate to disgorge is not the full net earnings but rather the difference between the higher earnings that Mr Andrewes has obtained and the lower earnings that he would have obtained had he not used fraud and hence had not been offered the particular job. This is to take away the “profit” made by the fraud (analogously to the reasoning adopted in R v Sale). This approach provides a principled “middle way” (or “halfway house”) between the take all or take nothing approaches to confiscation in cv fraud cases.”

If the employment services the “false cv” defendant was to undertake were such as to make it a criminal offence for them to do the work then the full net salary may well be the appropriate confiscation figure (para. 53):

“55. In contrast, it may be that the middle way we have adopted would not be appropriate (or would need modification) where, even though the performance of the services is lawful, there has been no equivalent to restoration because, for example, the defendant has been paid a large sum upfront (or has received a “golden handshake”) so that one cannot say that performance of the services by the fraudster constitutes the equivalent to restoration of what has been paid. But we prefer to leave that question open to be determined as and when it arises.”

Thus as the Supreme Court’s press summary concluded:

“Applying this principled middle way to the facts, a confiscation order of £244,568 would be proportionate (assuming not exceeding the recoverable amount) [51]. But as, on the facts, the recoverable amount is only £96,737.24, the Supreme Court holds that a confiscation order in the amount of £96,737.24 is proportionate [52]. The Supreme Court therefore allows the Crown’s appeal and restores, but for different reasoning, the confiscation order made by the judge [57].”

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