Confiscation and multiple defendants

Police lamp copyright David Winch 2014The Court of Appeal in London recently considered a couple of questions which arise where more than one defendant is convicted and then subject to confiscation.  Where benefit is obtained jointly by co-defendants should each of them be regarded as obtaining the whole of the benefit which they obtained jointly?  Secondly, is it proper for confiscation orders to be made against the various co-defendants which require them to pay in total more than the amount obtained from the offence?

 

These questions arose in the case of Fields and Others v R [2013] EWCA Crim 2042.  Essentially the position was that the co-defendants, Mr Fields, Mr Sanghani and Mr Sagoo had been engaged in a fraud between January and June 2005 which generated £1,410,762.  Each of them was convicted of having been at the heart of the fraud and so each of them had jointly obtained the benefit of it.

In the Crown Court the judge made confiscation orders against each of them recording a benefit of the entire amount obtained in the fraud (uplifted for inflation between 2005 and the date of the confiscation order under s80(2)(a)).

When it came to considering the ‘available amount‘ of each defendant, the Crown Court judge concluded that none of the defendants had satisfied him that he had an ‘available amount‘ less than his benefit.  Accordingly he made confiscation orders against each of the defendants in the full amount of the benefit generated by the fraud.

Each of the defendants appealed against the confiscation orders.

 

Benefit jointly obtained

In relation to the benefit jointly obtained it was argued on appeal that – whilst each of them had obtained an interest in the entire £1,410,762 obtained from the fraud – the value of each defendant’s interest was only a one-third share (because of the impact of the interests held by the other defendants).  It was contended that, in consequence, s79(3) applied and resulted in the value of each defendant’s benefit being equal to one-third of the value of the total amount obtained by the fraud.

The Court of Appeal rejected that contention.  They considered the argument to be “altogether too artificial”.  They remarked that, “Section 79(3) of the 2002 Act is to be taken as, generally speaking, extending to making allowance for lawfully subsisting prior interests of other persons: not to the asserted ‘beneficial interests’ of co-conspirators whose very criminality has caused the relevant property to be obtained jointly in the first place”.

Furthermore they pointed out that there was precedent case law, binding upon them, particularly from the House of Lords decisions in R v May [2008] UKHL 28 and R v Green [2008] UKHL 30, which was wholly against the defendants’ argument on this point.  The Court of Appeal did not consider that more recent decisions, such as that of the Supreme Court in R v Waya [2012] UKSC 51, had undermined the authority of the House of Lords’ earlier decisions in this connection.

In truth it seems that there was little prospect of the defendants succeeding on this argument in the Court of Appeal and it may be expected that the decision will now be further appealed to the Supreme Court (which would not necessarily be bound by the earlier case law).  It may be noted that the possible implications of s79(3) were not discussed in the House of Lords’ judgments in those earlier cases.

 

Available amount and multiple recovery

The Court of Appeal considered whether it was open to the Crown Court judge to hold that none of the defendants had satisfied him that his ‘available amount‘ was less than his benefit.  The Appeal Court upheld the Crown Court judge’s findings on that point.

The defendants then argued that, as a result of the three confiscation orders, the Crown would (if the orders were satisfied) recover three times the amount obtained from the fraud.  They submitted that this multiple recovery operated like a fine upon the defendants and was disproportionate and a breach of the defendants’ rights under Article 1 of the First Protocol to the European Convention on Human Rights (‘A1P1’).

The argument based on disproportionality relies heavily upon the Supreme Court decision in Waya.  But Waya was not a case involving more than one defendant and the particular issue of multiple recovery was not a relevant consideration in that case.

The Court of Appeal rejected the defendants’ arguments on this point also.  They considered that the House of Lords cases again were authority, binding upon them, which were against the defendants’ submissions – and that the decision in Waya had no impact on this issue.

The confiscation orders made against each defendant by the Crown Court judge had reflected the amount of the benefit obtained by him.  The confiscation legislation, said the Court of Appeal, “requires the focus of attention to be on depriving each defendant of the proceeds of his crime”.  But the defendants’ argument would require each confiscation order to take into account the confiscation orders made against co-defendants – and that was not appropriate.

However this again is a point which the Supreme Court may be asked to consider if the case is further appealed.

Of course if the defendants had been successful in reducing their benefit to one-third of the amount obtained by the fraud then the issue of multiple recovery would have evaporated.

 

Delays in making the confiscation orders

Finally, it is interesting to note that in this case the police action against these defendants commenced in mid-2005.  The defendants were convicted of the fraud in November 2008.  The confiscation orders were made in the Crown Court in February 2010 (against Mr Fields) and November 2012 (against Mr Sanghani and Mr Sagoo).  The Court of Appeal decision was handed down in November 2013 (more than 8 years after the offence was committed) and the matter may yet go to a further hearing before the Supreme Court!

David

UPDATE: On 18 June 2014 the Supreme Court confirmed that the benefit should NOT be apportioned amongst the conspirators (see new blog article “UK Supreme Court rules on benefit obtained jointly“) but that the enforcement of each defendant’s confiscation order should be subject to a proviso that the State shall not recover more than 100% of the benefit jointly obtained, effectively creating a joint and several liability of the conspirators to ‘repay’ the benefit obtained jointly (see new blog article “Supreme Court caps confiscation enforcement“).

(Note: This article applies to confiscation orders under the provisions of Part 2 of the Proceeds of Crime Act 2002 in England and Wales. There are a number of additional issues which could be relevant to a defendant’s confiscation order in particular cases which it is not possible to deal with in a relatively short article such as this. Appropriate professional advice should be sought in each individual case.)

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