Blood from a Stone – New Laws Proposed to Recoup Proceeds of Crime

Written 18th July 2016 by Olliers Solicitors

The Home Affairs Select Committee on Friday 15th July 2016 released their report into the Proceeds of Crime Act. This in turn followed the National Audit Office’s 2013 and 2016 reports into the efficacy of the recovery of the Proceeds of Crime, which at the time reported that out of every £100 of criminal profits only 26p was being recovered to the public purse.

Home Affairs Select Committee Report into Proceeds of Crime

The Select Committee’s report has a number of recommendations that focus on enforcement of the outstanding orders and amount to a substantial toughening of Confiscation Laws (if the Government follows the Committee’s recommendations). These include;

  • Increased use of Restraint Orders  – “Ideally, assets should be frozen simultaneously with the criminal becoming aware of the investigation for the first time (this will often be at the time of arrest, although not always).
  • Specialist “Confiscation Courts” and specialist POCA Prosecutors – “We recommend that the Government takes the necessary steps to establish confiscation courts to allow for serious and/or complex confiscation hearings. For example, we would expect these courts to hear those cases featuring cross-border financial transactions, use of corporate vehicles or very high value proceeds.”
  • Outsourcing recovery of outstanding Confiscation Orders – “We recommend that the Government creates a market for the private enforcement and collection of unpaid confiscation orders once they enter arrears, earning a fee from a portion of that order.”
  • New powers of the Court to compel Defendants to attend Confiscation Hearings – “We also heard that that figure is so large because often a confiscation order is made for assets that may never have even existed. This is because, when a criminal refuses to engage with the POCA court proceeding, the judge is left with no option but to demand the full amount rather than the prosecution and defence agreeing the actual collectable amount. We therefore recommend that the courts be given a power to compel attendance at a confiscation hearing.”
  • Making non payment of a Confiscation Order a new criminal offence – “We agree with the Metropolitan Police Commissioner, Sir Bernard Hogan-Howe, that non-payment of a confiscation order should be made a separate criminal offence. To enforce this, we recommend that no criminal be allowed to leave prison without either paying their confiscation order in full, or engaging with the courts to convince a judge that their debt to society is squared.”
  • Automatic confiscation of passports for any Defendant subject to a Confiscation Order – “Given the global nature of many of these crimes, we recommend that the Government confiscates the passport of any criminal subject to a confiscation order. With non-payment of a confiscation order a separate criminal offence, the Home Secretary should use her discretion to deny criminals owing the state money under such an order the ability to evade payment by travelling abroad. These criminals will remain wanted for the crime of non-payment and travel restrictions are needed to ensure effective enforcement of the court order.”

Changes to Proceeds of Crime Legislation

These recommendations come on the back of recent changes to POCA which came into force in June 2015; these changes provided a range of new seizure, restraint and retention powers for the Police, and substantially increased default sentences for Defendants who do not pay their order.

Unpaid Confiscation Orders

The Committee described the outstanding unpaid figure for Confiscation Orders of £1.6billion as “very large and undeniable”. The Committee heard evidence to the effect that this was as a result of a wide definition of Criminal Benefit meaning the money “simply does not exist” (Helena Wood, RUSI) and is a “complete fiction” (Kennedy Talbot QC, 33 Chancery Lane). The Committee’s response to being told they cannot get blood from a stone appears to be that the stone should be squeezed harder.

It is disappointing that no recommendations are made for reform of the way Benefit is calculated under POCA so that the problem of large uncollected Confiscation Orders can be resolved by way of dealing proportionately with assets and money that exist and can be collected as part of a realistic order.

Non Payment of Confiscation Orders

The creation of a new criminal offence of non payment of a Confiscation Order would presumably be in addition to the default sentence that would either already be activated or be activated at the same time a Court sought to punish the non paying Defendant. Given that the recent change in the law increased the maximum default sentence to 14 years and removed early release for offenders subject to default sentence of 7-14 years, it seems unclear what the Committee hope to achieve.

Similarly the proposal for automatic confiscation of Defendants’ passports appears to have been made in ignorance of the fact that the June 2015 changes to POCA now allow Courts to impose a travel ban on Defendants subject to Confiscation Order by way of a “Compliance Order”.

Specialist Confiscation Courts

The principle of specialist Confiscation Courts has a great deal of merit, as this area of law is complex and specialised. The recommendation however is that “the confiscation courts must therefore be properly resourced, with highly motivated and expertly trained judges and prosecutors, to ensure the highest standard of understanding and consistency in the application of this aspect of the law”. The Criminal Justice System is already chronically underfunded, with serious consequences within the Courts, Prison System and Legal Aid flowing from previous cuts. It remains to be seen therefore whether against this background the Government will find the funding to properly implement the Committee’s recommendations.

Olliers Solicitors – Specialist Confiscation Lawyers

Article by Tom Cawley, a Solicitor specialising in all aspects of Confiscation and Asset Recovery. Tom has acted in POCA cases for the past 10 years and has experience at all stages of the Confiscation process.

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