Prosecution applications under s22 to require a further payment from the convicted defendant are becoming more and more common.
A financial investigator or officer will normally file a s22 witness statement in support of the application. What do we look for in that s22 statement?
The prosecutor’s s22 statement
Rule 33.16 of the Criminal Procedure Rules 2015 addresses such an application. This simply says that the application must be in writing and may be supported by a witness statement. But the Rule does not prescribe the content of that statement.
I would suggest that it would be best practice for the statement to:
- Include an explanation of the history of the case, the current financial investigation and its findings, and the prosecutor’s proposals for variation of the confiscation order, and
- Take the court through the steps required under s22 to vary the order.
Hopefully the author of the s22 statement will demonstrate a good understanding of the legislation, the difference between the concepts of the “available amount” and the “amount required to be paid”, and the impact of changes in the value of money on the figures.
Ideally appended to the s22 statement should be copies of:
- The original s16 statement(s)
- The original confiscation order and supporting schedule 5050A of available amount, and any later variations to these
- The new evidence relied on, such as bank statements or Land Registry documents and property valuations
- Numerical schedules in support of the figures in the s22 statement,
- A copy of any current restraint order, and
- A draft of the proposed court order varying the confiscation order.
The author of the s22 statement will have had the opportunity to collect information using the investigation powers of Part 8 PoCA 2002 and under information request clauses in any restraint order which has been obtained as a precursor to the s22 application. Since the prosecution are making the application it does not seem unreasonable to me to ask that they present the evidence required to support it.
Poor quality s22 statements
However in my experience s22 statements are of poor quality, fail to take the court through the necessary steps to vary the order and confuse the defendant’s “available amount” (which depends only upon the assets he has today, liabilities secured on those assets, and any ‘tainted gifts’ he has made in the past) with the “amount required to be paid” (which is the total of the amount(s) previously required to be paid and the additional amount to be required to be paid under the proposed variation).
Where a s22 variation is proposed the prosecutor is requesting an increased “amount required to be paid” – which will in most cases be in excess of the defendant’s “available amount”.
Angela, Bernard and Cyril
Some worked examples will make the position clearer.
Consider Angela, Bernard and Cyril. Let’s assume (to make life easier) that, although there is no connection between them, each of them has suffered a very similar fate. So in each case:
- They have been convicted of possession of controlled drugs with intent to supply, a ‘criminal lifestyle’ offence
- Each of them was charged on 15 August 2007, convicted on 27 November 2008, and made subject to a confiscation order on 21 April 2009
- On 21 April 2009 each of them was found to have a benefit of £400,000 and an available amount of £100,000, and was the subject of a confiscation order made that day requiring payment of £100,000
- None of them had any benefit jointly obtained with another person
- Each of them paid £100,000 on 7 October 2009
- There have been no variations to the confiscation orders since 21 April 2009 and no other confiscation proceedings against them
- A s22 application is being made now (July 2019)
- The latest published CPIH figure is that for May 2019.
But each of them now is in a different financial position:
- Angela’s mother died and has left her £500,000 which she has in a bank account. She has no other assets and no secured liabilities
- Bernard owns a mortgaged property in which there is £120,000 of equity and has £30,000 in the bank. He has no other assets or secured liabilities
- Cyril has £70,000 in a bank account. He has no other assets and no secured liabilities
- None of them have made any ‘tainted gifts’ since 16 August 2001 (the ‘relevant day’).
What applications under s22 should the prosecution make in each case?
Let us assume that the prosecutor considers it would be “just” for the court to increase the amount required to be paid to the maximum amount possible under s22 in the circumstances.
We know from the Office for National Statistics that the CPIH stood at 87.5 in April 2009, 88.4 in October 2009 and 107.9 in May 2019 (the most recent figure we have).
Angela’s s22 variation
Angela’s available amount is £500,000. That is the result of the ‘new calculation’ under s22(3).
Her available amount in April 2009 was £100,000, that is the ‘relevant amount’ for s22(8). If we uplift that for CPIH changes since April 2009, in accordance with s22(7), that becomes £123,314.28.
Clearly £500,000 exceeds £123,314.28 so the ‘trigger’ condition of s22(4) is satisfied and the court can vary the order.
The total benefit was £400,000 in April 2009. Using CPIH we uplift that to an equivalent of £493,257.14. That is the maximum amount that can be required to be paid under s22(4)(b).
Assuming the court varies the order so that £493,257.14 becomes “the amount required to be paid”, of which Angela paid £100,000 in October 2009, she could be required to pay a further £393,257.14.
However the court may consider it “just” to uplift the £100,000 paid by Angela in October 2009 using CPIH, which gives £122,058.82.
This would mean that the court order would be that the amount required to be paid is £493,257.14 of which Angela has in effect paid £122,058.82, meaning she would be required to pay a further £371,198.32.
Bernard’s s22 variation
Bernard’s available amount is £150,000. That is the result of the ‘new calculation’ under s22(3).
Clearly £150,000 exceeds £123,314.28 so the ‘trigger’ condition of s22(4) is satisfied and the court can vary the order.
The prosecutor will ask the the court to vary the order so that £250,000 becomes the “amount required to be paid”, of which Bernard paid £100,000 in October 2009 so, if the court agrees, he would be required to pay a further £150,000.
The £250,000 required to be paid is clearly less than Bernard’s total benefit for the purposes of s22(4)(b) – or more precisely, £272,058.82 does not exceed £493,257.14 – so there is no s22(4)(b) bar to requiring Bernard to pay a further £150,000.
Cyril’s s22 variation
Cyril’s available amount is £70,000. That is the result of the ‘new calculation’ under s22(3).
Clearly £70,000 does not exceed £123,314.28 so the ‘trigger’ condition of s22(4) is not satisfied and the court cannot vary the confiscation order under s22 in Cyril’s case.
(In practice many prosecutors would apply to the court for a variation in a case such as Cyril’s. As far as I am aware there is no binding legal precedent yet on a situation such as this.)
Key mistakes made by prosecutors
In my experience the key mistakes made by prosecutors in preparing s22 statements are:
- Failing to give proper consideration to the detailed provisions of s22
- Failing to consider the impact of the changing value of money
- Misdescribing the “amount required to be paid” as the “available amount”, and
- Failing to append relevant documents and schedules to the s22 statement.
In consequence the prosecution can fail to assist the court to apply the correct test and come to a proper conclusion.
It then falls to the defence legal team, assisted where appropriate by forensic accountants such as ourselves, to provide the court with the information it needs under section 22.
Of course the defence legal team will also seek to persuade the court that it would not be “just” to vary the confiscation order in accordance with the prosecutor’s application – but that’s a subject for another time!
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(Note: This article applies to confiscation proceedings 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 proceedings 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.)