(A) THE STATUTORY CONFISCATION REGIME FOLLOWING CRIMINAL CONVICTION

The statutory confiscation regime was consolidated in the Proceeds of Crime Act 2002^[1] by virtue of which the Crown Court can make confiscation orders as part of the sentencing process.^[2] The essence of such orders is to remove from criminals the proceeds of their crimes,^[3] by valuing the proceeds and imposing a personal liability on the defendant to pay value to the State. This has been called ‘value confiscation’.^[4] The Assets Recovery Agency was established by the Act to enforce confiscation orders made by the court. In 2012/13 6,392 orders were made, resulting in the confiscation of ?133 million, although this only amounts to 26 pence in every ?100 of estimated proceeds of crime.^[5] Confiscation orders will be considered where the defendant has been convicted of a crime and the Director of the Assets Recovery Agency requests a confiscation order or the court believes that such an order is appropriate.⁶⁶

When determining whether a confiscation order can be made against the defendant three separate questions need to be considered:^[6]

• (1) Has the defendant benefited from general criminal conduct if he or she has a criminal lifestyle or, if he or she does not have a criminal lifestyle, has the defendant benefited from particular criminal conduct?^[7] A defendant will have such a lifestyle if he or she has been convicted of a specified offence, such as money laundering or drug trafficking, or the offence forms part of a course of criminal activity involving the commission of a minimum number of other crimes or was committed over at least six months.^[8] The consequence of living a criminal lifestyle is that the court will presume certain things about the defendant’s property, such as that any property transferred to the defendant within six years of the proceedings being commenced is the proceeds of crime.^[9] It is open to the defendant then to rebut these presumptions.^[10] The benefit must be obtained ‘as a result of or in connection with’ the commission of a crime.^[11] Where the defendant has been convicted of one offence and the court considers that the defendant has obtained benefits from a course of criminal conduct, the court may order that all of these benefits should be confiscated, even though some of the benefits arise from crimes in respect of which the defendant has not been convicted and which have never been formally taken into consideration in criminal proceedings.
• (2) If the defendant has benefited from criminal conduct, what was the value of the benefit which the defendant obtained?^[12] An objective test of market valuation is adopted.^[13] So, for example, where a thief steals property, the value of the benefit will be what it would have cost the thief to acquire the property lawfully on the open market.^[14] There is no scope for subjective devaluation.^[15] The value of the benefit is the greater of the value of the property when it was obtained, adjusted for inflation, or its current value.^[16] The benefit includes property which has been substituted directly or indirectly for the original property.^[17]
• (3) What sum can be recovered from the defendant? It is assumed that the amount to be confiscated from the defendant is the value of the benefit which the defendant has obtained.⁷⁹ The recoverable amount may be less, however, if the defendant shows that the amount he or she has available⁸⁰ is less than the value ofthe benefit.⁸¹ In such circumstances the recoverable amount will be limited to the financial resources of the defendant at the date of the determination of the confiscation award or, if the available amount is nil, the recoverable amount will be a nominal sum.⁸² The reason why the recoverable sum is allowed to be less than the value of the benefits received arises from the fact that the consequence of the defendant defaulting on the confiscation award is a liability to be imprisoned, and so the defendant ‘cannot be ordered to pay a sum which it is beyond his or her means to pay’.^[18] In determining the recoverable amount the court cannot take account of the effect of a confiscation order on the defendant’s creditors.^[19] Having determined the recoverable amount the court will make a confiscation order requiring the defendant to pay that amount, save where it would be so disproportionate so as to constitute a violation of the defendant’s rights under Article 1 of the First Protocol to the ECHR, relating to the protection of property.^[20]

This tripartite structure to the confiscation scheme bears striking similarities to the statutory scheme under the Law Reform (Frustrated Contracts) Act 1943, especially section 1(3) concerning claims for the value of non-money benefits provided before a contract was frustrated, where these benefits are to be identified and valued and the claimant may be awarded a just sum which does not exceed the value of the benefit received by the defendant.^[21]

• [1] J Ulph, ‘Confiscation Orders, Human Rights and Penal Measures’ (2010) 126 LQR 251.
• [2] Zinga [2014] EWCA Crim 52, [2014] 1 WLR 2228.
• [3] Waya [2012] UKSC 51, [2013] 1 AC 294, [20] (Lord Walker and Hughes LJ).
• [4] Serious Organised Crime Agency v Perry [2012] UKSC 35, [2013] 1 AC 182, [31] (Lord Phillips).
• [5] National Audit Office, Confiscation Orders (20 1 3). 66 Proceeds of Crime Act 2002, s 6.
• [6] May [2008] UKHL 28, [2008] 1 AC 1028, [8]. 2 Proceeds of Crime Act 2002, s 6(4)(b) and (c).
• [7] 69 Ibid, s 75. 4 Ibid, s 10.
• [8] 71 This does not infringe the European Convention on Human Rights: Grayson v United Kingdom (2008) 48
• [9] EHRR 722. 6 Proceeds of Crime Act 2002, s 76(4).
• [10] 73 Ibid, s 76(7). Detailed rules as to valuation of benefits are included in ss 79-80. 8 Ibid, s 79(2).
• [11] 75 CPS Nottinghamshire v Rose [2008] EWCA Crim 239; Allpress [2009] EWCA Crim 8; Nelson [2009]
• [12] EWCA Crim 1573, [2010] QB 678.
• [13] 76 See p 69, above. 11 Proceeds of Crime Act 2002, s 80(2).
• [14] 78 Ibid, s 80(3). 79 Ibid, s 7(1).
• [15] 80 This is the total value of all the defendant’s free property and all tainted gifts minus the amount payable in
• [16] pursuance of obligations which have priority: ibid, s 9(1).
• [17] 81 Ibid, s 7(2). 82 Ibid.
• [18] May [2008] UKHL 28, [2008] 1 AC 1028, [41].
• [19] Serious Fraud Office v Lexi Holdings pic [2008] EWCA Crim 1443, [2009] QB 376. In the same way thatthe recognition of an institutional constructive trust over the profits derived from breach of fiduciary dutyappears to disregard the interests of the defendant’s creditors. See also p 513, above.
• [20] Waya [2012] UKSC 51, [2013] 1 AC 294; Barnes v Eastenders Cash & Carry pic [2014] UKSC26, [2015] AC 1.
• [21] See BP v Hunt (No 2) [1979] 1 WLR 783. See p 357, above.