Confiscation – the second time around

For most people being subject to confiscation proceedings once is bad enough – but a small number of people who have been subject to confiscation find themselves convicted of further offences later in life and are then subject to confiscation for a second time based on those later convictions.  Suppose that in both cases the figure of ‘benefit’ is to be calculated incorporating assumed ‘benefit’ arising under statutory assumptions.  How are the rules of confiscation adapted to fit this situation?

How are the rules of confiscation adapted to fit this situation?  The position is best explained with an illustrative example.

The position is best explained with an illustrative example.  Let’s say Jim has old convictions relating to thefts from his employer some year ago.  Jim has lived in England all his life.  In June 2003 he was convicted of several counts of theft and false accounting over a period commencing in 2000.  On 18 March 2004 a confiscation order was made against Jim under the provisions of Criminal Justice Act 1988 (as amended by Proceeds of Crime Act 1995 and other legislation).  His benefit was £180,000, including assumed benefit under the s72AA CJA 1988 assumptions.  His amount that might be realised (or available amount) was £45,000 and so he was ordered to pay £45,000.  Jim has since paid that £45,000 in full.

Since Jim came out of prison he has been out of work and living on benefits.  However after he had been out of prison for a while Jim was offered regular work part-time, 18 hours each week, with a local business.  He continued to claim benefits without declaring the income from the part-time work.  When this came to light he was interviewed and on 10 November 2009 he was charged with benefit fraud in that he failed to declare a change of circumstances affecting his entitlement to benefit after he started work.  He was subsequently convicted.  The benefit fraud is an offence which continued for at least 6 months and from which he obtained a benefit of at least £5,000.

Jim is now subject to confiscation proceedings under Proceeds of Crime Act 2002 on the basis that he has a ‘criminal lifestyle’ as a result of the benefit fraud offence, see s75(2)(c) & (4).

If Jim had not been subject to confiscation previously the ‘relevant day’ for the commencement of the ‘criminal lifestyle’ assumptions would be 6 years prior to the date on which he was charged with the offence – that would be 11 November 2003.  But that date falls prior to the date upon which the earlier confiscation order was made.

The effect of the earlier confiscation order made on 18 March 2004 was to fix the total of his ‘benefit’ up to that date.

The effect of the earlier confiscation order made on 18 March 2004 was to fix the total of his ‘benefit’ up to that date.  The later confiscation proceedings do not re-open the earlier ones – and double counting must be avoided.  There would be double counting if the ‘relevant day’ was earlier than the date of the previous confiscation order.

So the ‘relevant day’ for the second confiscation becomes the day on which the previous confiscation order was made – 18 March 2004, by virtue of s10(9)(a), so as to avoid double counting.

Also the assumption in s10(3) concerning property held by the defendant at any time after his conviction cannot be applied to any property held by Jim on or before that ‘relevant day’ (18 March 2004) because that property will have been taken into account in the making of the confiscation order that was made on that day.  Subsection 10(9)(b) modifies the effect of s10(3) accordingly – again to prevent double counting.

Both of these modifications serve to reduce the benefit to be taken into account in Jim’s second confiscation.  But it is not all good news for Jim!

Both of these modifications serve to reduce the benefit to be taken into account in Jim’s second confiscation.  But it is not all good news for Jim!

You recall that on 18 March 2004 the court found his benefit to be £180,000 but he was only ordered to pay £45,000.  Provisions in section 8 ensure that, in the new confiscation, that benefit of £180,000 is deemed to have been established, s8(3) & (4).  Since the benefit now to be taken into account in the new confiscation is Jim’s ‘benefit of his general criminal conduct’, s6(4), and that is defined as all his criminal conduct, s76(2), then the £180,000 is again benefit to be taken into account in the new confiscation proceedings.  In effect Jim cannot challenge that £180,000 of benefit (except by appealling against the earlier confiscation order which is unlikely to be possible so long after it was made).

The only reduction in that £180,000 figure is for the amount which Jim was ordered to pay by the earlier confiscation order – which is the £45,000 – see s8(5).

So the result is that there is established, before any consideration of the benefit derived from the more recent conviction or the operation of the criminal lifestyle assumptions for the period since the earlier confiscation order was made, a benefit equal to the amount which he was not ordered to pay last time around

So the result is that there is established, before any consideration of the benefit derived from the more recent conviction or the operation of the criminal lifestyle assumptions for the period since the earlier confiscation order was made, a benefit in Jim’s case equal to the amount which he was not ordered to pay last time around.  In Jim’s case that is £135,000 (£180,000 benefit less the £45,000 ordered to be paid at the time).  [NOTE:  For an example of this in practice see the judgment in R v Chahal & Chahal [2014] EWCA Crim 101 at paras 21 & 32.]

Would Jim have escaped that consequence if more than 6 years had elapsed between the previous confiscation order and the later offence? No he would not.  Because the definition of ‘general criminal conduct’ covers all Jim’s criminal conduct it makes no difference how many years ago that earlier confiscation order was made.

So being subject to confiscation for a second time is likely to be an unhappy experience.

David

Postscript:

The Court of Appeal in England & Wales recently reduced the figure of ‘benefit’ in a confiscation order from £5,085,222 to £873,010 as a result of the operation of the provisions concerning a defendant’s second ‘criminal lifestyle’ confiscation, R v Barnett [2011] EWCA Crim 2936.  The court commented that the “statutory material concerning confiscation is somewhat labyrinthine and the process of following the appropriate paths is difficult” but “the path does lead in this case to the conclusion that the “assessment” made on 10 October 2005 [that is to say the figure of benefit in the previous confiscation order] must be taken as fixed for the purposes of any subsequent assessment of benefit”.  As a result the Crown Court could not, on the making of a subsequent confiscation order, reconsider the defendant’s ‘benefit’ arising prior to the date of the previous confiscation order when the courts had been entitled to operate the statutory assumptions in the earlier confiscation proceedings.

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