It is perhaps surprising and a little troubling to find in 2018 the UK Supreme Court split 3 – 2 on the application of confiscation legislation which is 15 years old.
The issue was a simple one – but its resolution involved consideration of some fundamental principles of statutory interpretation.
The issue & the relevant legislation
There were two defendants, who were husband and wife, R v McCool (Northern Ireland)  UKSC 23. Each of them had pleaded guilty to four offences in connection with false applications made for state benefits. In each case one offence occurred prior to 24 March 2003, and the other three after that date.
When it came to confiscation the prosecution wished to proceed under Proceeds of Crime Act 2002 rather than Criminal Justice Act 1988 confiscation provisions – but should they be permitted to do so?
That was the issue the Supreme Court was tasked to determine.
The Proceeds of Crime Act 2002 confiscation provisions apply to offences committed after 23 March 2003, by virtue of the Proceeds of Crime Act 2002 (Commencement No 5, Transitional Provisions, Savings and Amendment) Order 2003.
The prosecution had sought to disregard for each defendant the offence committed before 24 March 2003, relying in each case on the benefit from only the three later offences.
The prosecution did not seek to invoke the ‘criminal lifestyle’ assumptions against the defendants.
One might ask why the prosecution did not wish to proceed under Criminal Justice Act 1988 provisions, which could have allowed the s72AA statutory assumptions to be invoked. The answer is not spelled out in the judgment but it is clear that, in any event, each defendant’s ‘available amount’ was less than his or her ‘benefit’. So the statutory assumptions under CJA 1988 would not have produced any useful result in practice.
On the other hand, the CJA 1988 legislation has no provision similar to s22 PoCA 2002, which provides for the upward variation of a confiscation order in later years when a defendant has an increased ‘available amount’.
It may have been the potential for a future s22 application which attracted the prosecution to the PoCA 2002 confiscation provisions (even though this involved a reduction in ‘benefit’ because in each case any ‘benefit’ arising under the earliest offence could not be recognised at all under PoCA 2002).
Although this was a Northern Ireland case very similar legislation applies in England and Wales, so the decision of the Supreme Court is equally relevant in that jurisdiction.
The transitional provisions provide that “Section 6 of the Act (making of confiscation order) shall not have effect where the offence, or any of the offences, mentioned in section 6(2) was committed before 24th March 2003″ (but with the substitution of s156, the equivalent section, in Northern Ireland).
Subsection (2) (in England and Wales) provides:-
“The first condition is that a defendant falls within any of the following paragraphs —
- (a) he is convicted of an offence or offences in proceedings before the Crown Court;
- (b) he is committed to the Crown Court for sentence in respect of an offence or offences under section 3, 3A, 3B, 3C, 4, 4A or 6 of the Sentencing Act;
- (c) he is committed to the Crown Court in respect of an offence or offences under section 70 below (committal with a view to a confiscation order being considered)”.
The Northern Ireland legislation is similar, but with (b) omitted.
Here the two defendants had been committed to Crown Court with a view to a confiscation order being considered.
Lord Kerr’s view
Lord Kerr’s view was that it would be “a wholly anomalous result” if this legislation were interpreted to mean that where a defendant had been convicted, in the same proceedings, of offences committed both before and after 24 March 2003 all of those offences had to be dealt with under the earlier confiscation statutes.
In Lord Kerr’s opinion, it was Parliament’s intention that all offences committed after 23 March 2003 which could generate confiscation orders under the Act should be dealt with under PoCA 2002.
“It cannot have been intended that a swathe of post-2003 offences should be removed from the Act’s purview simply because the defendant was convicted of an associated offence before the relevant date”, he said.
Since the courts will generally seek to find an interpretation of legislation which does not produce an anomalous or absurd result, and which gives effect to Parliament’s intention, subsection (2) must be interpreted as referring to the “offence or offences” to which PoCA 2002 applied. That is the “offence or offences” committed after 23 March 2003.
It follows that the “offence or offences mentioned” in subsection (2) were all committed after 23 March 2003.
On that basis the defendants’ offences committed before 24 March 2003 could be ignored and confiscation could proceed under PoCA 2002 as sought by the prosecution – relying only upon those offences committed after 23 March 2003.
The views of Lord Hughes and Lady Black
Lord Hughes and Lady Black arrived at the same conclusion as Lord Kerr.
“If the appellants’ contention were correct, and the earlier confiscation regime has to be applied wherever there is a single pre-commencement offence on the indictment (or before the magistrates) even if it is not relied on for confiscation, it would follow that that rule would have to apply even if the pre-commencement offence could never, even arguably, have generated a benefit, and thus could never, even arguably, have had the slightest relevance to the issue of confiscation,” said Lord Hughes.
Because this outcome “might well be termed absurd” this could not be the appropriate interpretation of the legislation.
Since three of the five judges had reached this conclusion the prosecution’s approach had prevailed.
The dissenting minority
The dissenting minority, Lord Reed and Lord Mance, disagreed with the majority about the intention of Parliament and did not agree that it would be “absurd” for the earlier confiscation legislation to have been required to apply where one or more offences dealt with in the same proceedings had been committed before 24 March 2003.
They considered that the words in the legislation should be given their natural meaning and that the interpretation placed on the words by the majority was “strained beyond breaking point”.
“It seems to me to be much more likely that the drafter of the transitional provisions intended to bring all the offences in any set of proceedings into one statutory confiscation scheme or the other. Then, at least, no offences would fall outside all confiscation regimes”, said Lord Reed.
The prosecution won the day and it is now undeniable that the prosecution may opt, in confiscation proceedings, to entirely disregard offences committed before 24 March 2003 in order to proceed under PoCA 2002.
It is also true that none of the Supreme Court justices considered it appropriate in this case to “read into” the legislation additional words in order to give a clear and unambiguous meaning to that legislation.
However the sharp differences in opinion in these judgments underline the dangers of seeking to divine the intentions of Parliament – and the complexities of the law around confiscation.
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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.)