Confiscation and Ancillary Orders pre-POCA: Proceeds of Crime Guidance

Revised June 2009

• Principle
• Guidance
  • The power to make confiscation orders
  • What is a confiscation order?
  • Identifying a Confiscation Case
  • Confiscation and forfeiture orders
  • The High Court Powers
• Procedure
  • The Crown Court Confiscation Hearing
  • Benefit
  • Assumptions
  • Variation of Confiscation Orders Downwards
  • Variation of Confiscation Orders Upwards
  • Confiscation and Unused Material
  • Roles of Prosecutor and the Central Confiscation Unit of the Organised Crime Division (CCU OCD)
  • The Role of CCU OCD in Receivership Applications to the High Court
  • Work done by the CCU OCD
  • Further Information

Principle

A confiscation order is made after conviction to deprive the defendant of the benefit that he has obtained from crime. The prosecutor is able to take steps to preserve assets so that they are available to pay the order. If the order is not paid voluntarily then either the magistrates' court enforces the order as if it were a fine or the prosecutor may apply to the High Court to appoint a receiver.

Guidance

The power to make confiscation orders

The Drug Trafficking Act 1994 (DTA) and Part VI of the Criminal Justice Act 1988 as amended by the Powers of Criminal Courts Act 1995 (CJA) give the Crown Court power to make confiscation orders. The CJA also gives the magistrates' courts a limited power to make confiscation orders. This is confined to the types of offences set out in schedule 4 of the CJA.

What is a confiscation order?

A confiscation order is an order made against a convicted defendant ordering him to pay the amount of his benefit from crime. Unlike a forfeiture order, a confiscation order is not directed towards a particular asset. It does not deprive the defendant or anyone else of title to any property.

Identifying a Confiscation Case

In DTA cases the reviewing lawyer should consider whether to apply for a confiscation order. In CJA cases the Central Confiscation Unit of the Organised Crime Division (CCU OCD) decides.

See Roles of Prosecutor and Central Confiscation Unit of the Organised Crime Division, below. The following factors should be considered:

• to determine benefit from drug trafficking the court must calculate all trafficking at any time (even before the DTA came into force) anywhere in the world, whether the defendant has been convicted of it or not;
• whether the CCU OCD has taken High Court action to obtain a restraint order;
• if such an order has been obtained, the Crown Court should be required to conduct a confiscation inquiry. A restraint order can only be obtained to preserve assets for a confiscation order and so the CPS, through the CCU OCD, will have represented to the High Court that confiscation will be pursued;
• if, in exceptional circumstances, the reviewing lawyer takes the view that he will not make a confiscation requirement, he must contact the CCU OCD immediately he forms that view. The restraint order will have to be discharged on urgent application by the CCU OCD.
• the likely amount of the confiscation order, the greater it may be, the more appropriate it will be to require the court to carry out a confiscation inquiry;
• if there is a victim, whether civil proceedings are being pursued. If they are and an injunction is in place freezing all the defendant's assets, confiscation is unlikely;
• bankruptcy of the defendant. If this has occurred, the defendant's assets will vest in the trustee in bankruptcy, the person responsible for settling the defendant's debts. Confiscation may not be viable;
• the feasibility of enforcing a confiscation order if one were to be made
• the question of compensation should be left out of account when considering whether to treat a case as a confiscation case. Confiscation is not excluded if a compensation order in the criminal proceedings appears to be likely. Neither does confiscation cut across compensation. There is provision in the CJA for compensatees to be paid out of sums realised under a confiscation order.

Confiscation and forfeiture orders

If the court can make a forfeiture order depriving the defendant of the major part of his assets, this is preferable to a confiscation order. A forfeiture order deprives the defendant of title there and then, whereas a confiscation order is only an order to pay a sum of money enforced as if it were a fine. If confiscation is invoked the court will not usually be able to make a forfeiture order.

For more information see deprivation of property in Sentencing and Ancillary Order Applications, elsewhere in the legal guidance.

The High Court Powers

The High Court powers are only available in confiscation cases. These are:

• restraint. This is to prevent disposal of assets. Such an order may even be made before charge, provided the defendant is to be charged;
• disclosure. If a restraint order is made, the court may make an order requiring the defendant to disclose, by affidavit, to the prosecution the nature and whereabouts of his assets, wherever they may be in the world;
• repatriation. Again if the court makes a restraint order, it may also order that the defendant relocate any assets which are at that time outside England and Wales, within the jurisdiction;
• receivership. The court can appoint a receiver, either pre-conviction to manage a defendant's estate, or post conviction to ensure that the order is satisfied.

Procedure

The Crown Court Confiscation Hearing

Once the defendant has been convicted the court must perform a confiscation enquiry if the prosecutor applies to the court. The court can also proceed if it considers it appropriate to do so.

For DTA cases the application can be made orally to the court, for CJA cases the notice must be in writing, in CJA cases if the prosecutor wishes to trigger the assumptions, see Assumptions below, then the notice must contain a declaration that in the view of the prosecutor the assumption should apply.

The court must determine whether the defendant has benefited from drug trafficking or any relevant criminal conduct, see Benefit below. If there is benefit, the court must determine the amount.

The court and the CPS will be assisted in assessing the benefit by enquiries made by the police financial investigation officer who will produce a statement as to the amount of the defendant's benefit to the court.

Benefit

In DT cases this is the total benefit from all drug trafficking carried on by the defendant or another in connection with drug trafficking, not just from the offences of which the defendant has been convicted.

In CJA cases this is the benefit from relevant criminal conduct. Relevant criminal conduct is the offences of which the defendant has been convicted and any offences taken into consideration.

In both DTA and CJA cases the court may make assumptions as to the benefit from the crimes. See Assumptions, below.

The court must then make a confiscation order in the amount of the benefit, unless the defendant satisfies the court that the amount that might be realised is less. In this circumstance, the court must order the lesser amount to be paid.

The prosecution and defence cannot agree or limit the amount of a confiscation order.

The court has no discretion to mitigate the confiscation order. For example, if the defendant has an interest in the family home, its value must be calculated. This is so even if the effect of the confiscation order may be to render the defendant and dependent relatives homeless.

The court has the power to make a confiscation order in a sum of money. Thereafter, the court must settle a term of imprisonment in default. It may also permit the defendant time to pay or payment in instalments. The court has no power to direct payment from a particular source (for example, money held by police).

Assumptions

The court can make certain assumptions that:

• all property held by the defendant since conviction; and
• all income and expenditure over a period commencing six years prior to the date when the proceedings were commenced was received by the defendant from, or met out of, proceeds of drug trafficking. If the court chooses to make any of these assumptions, the defendant has to show to the civil standard that the assumption is incorrectly made.
• in DT cases these assumptions are mandatory; in CJA cases these assumptions cannot be triggered unless
• the prosecutor has served a notice under s71(1)(a) which contains a declaration that in the prosecutor's view it is appropriate for the assumptions to be made, and
• the defendant is convicted in those proceedings of at least two "qualifying offences"; (including the current offence) or has been convicted of at least one qualifying offence in the last six years.
• a "qualifying offence" is an offence committed after 1 November 1995, tried in the Crown Court or contained within schedule 4 of the CJA from which the defendant has benefited.

Variation of Confiscation Orders Downwards

The defendant can obtain the reduction of a confiscation order made under the Acts (see DTA Section 17 and CJA Section 83) where the amount that might be realised turns out to be less than that assessed by the Crown Court. This is a two-stage process. First, the defendant must apply to the High Court for a "certificate of inadequacy".

If a certificate is issued, the defendant may apply to the Crown Court for the balance remaining under the order to be reduced. That court may then substitute such lesser amount as it deems just and reduce the period of imprisonment in default. Such applications are dealt with by the CCU OCD.

Variation of Confiscation Orders Upwards

There is power for confiscation orders to be varied upwards. The salient points are:

• power to increase a confiscation order where a confiscation order has been made and, at the time of its making, the defendant's benefit from drug trafficking exceeded the amount he could pay (DTA Section 16, CJA section 74C );
• the prosecution may make an application in these circumstances, first to the High Court, then to the Crown Court. Such applications will be handled by the CCU OCD;
• in cases where a defendant has been dealt with power to make a confiscation order where none has been made or increase one where it has been so made (DTA sections 13-15, CJA section 74A and section 74B):
• this power is restricted to cases where the prosecution discover, after the defendant was dealt with, further evidence to prove benefit or more benefit.
• the application is made by the prosecution, can only be made up to 6 years after the defendant was dealt with and the assumptions set out above do not apply;
• any application under these provisions should be handled at level E, with advice sought from the CCU OCD.

Confiscation and Unused Material

Material created by the police in the course of a financial investigation and by the CCU OCD in High Court proceedings against the defendant falls within the definition of unused material. For guidance on handling and procedure see the Disclosure Manual elsewhere in the Legal Guidance.

Roles of Prosecutor and the Central Confiscation Unit of the Organised Crime Division (CCU OCD)

If the CCU OCD become involved to take High Court action, the CCU OCD will not take over the prosecution. It is vital that the CCU OCD is kept informed of all material developments in the case that may affect confiscation. Material developments in the case may mean that the restraint order should be varied or discharged. Additionally, normal practice is to obtain such an order with out notice. The CCU OCD therefore has a continuing duty to the High Court to inform it of material developments. The following are examples of developments that should be brought to the attention of the CCU OCD.

• significant alteration of the charges;
• abandonment, discharge or acquittal of any defendant;
• notification of any civil proceedings involving a defendant (including proceedings for ancillary relief in matrimonial proceedings, bankruptcy or repossession by mortgagees);
• acceptance of pleas;
• the conviction of the defendant and the making of any confiscation order. In these circumstances, the CCU OCD should be sent, a copy of the confiscation order, any certificate issued by the court setting out the extent of the defendant's benefit and the police officer's financial statement;
• appeal against sentence to the Court of Appeal where a ground of appeal is against a confiscation order.

The Role of CCU OCD in Receivership Applications to the High Court

All applications to the High Court for the appointment of a Receiver pursuant to the pre-POCA legislation will be made by CCU OCD.

An officer of CCU OCD is responsible on a centralised basis for maintaining the rota of firms and for providing Area / CCU OCD lawyers with the name of the firm on the panel that will, subject to appointment by the High Court, conduct the receivership.

Work done by the CCU OCD

The CCU OCD will carry out the following work:

• make or defend all High Court applications. This includes the preparation and settling of witness statements, drafting orders, advocacy, and service of any orders made.
• take proceedings for committal for contempt of any High Court order;
• liaise with financial investigation police officers, who will normally carry out a financial inquiry;
• respond to appeals against sentence where a ground of appeal is against a confiscation order;
• prepare letters of request to foreign jurisdictions for the obtaining of evidence for the confiscation hearing, or the recognition or enforcement of any High Court order;
• make or defend applications in the Crown Court (following a certificate granted in the High Court) for a reduction or increase of a confiscation order;
• in CJA cases, decide whether to treat a case as a confiscation case and prepare the written notice to the Crown Court;
• in CJA cases, assist the police financial investigation officers to prepare a statement to assist the court in the calculation of a confiscation order; and
• in CJA cases, brief your counsel in respect of the confiscation element.

Further Information

Archbold 2006, chapter 5.

Mitchell, Taylor and Talbot: Confiscation and the Proceeds of Crime. Third Edition