Disclosure Manual: Chapter 21 - Disclosure in confiscation proceedings

Guidance on disclosure in confiscation proceedings conducted by the CPS

This chapter is only concerned with proceedings under Part 2 (Confiscation: England and Wales) Proceeds of Crime Act 2002 (POCA). It sets out the CPS’ duties of disclosure in domestic criminal confiscation proceedings, and the guidance, systems, and processes that investigators and prosecutors will follow to comply with those duties. As investigators in a criminal investigation that may lead to a prosecution, financial investigators will also have duties to deal with unused material in accordance with CPIA. They will need to provide schedules of the material gathered by them to the disclosure officer in accordance with the CPIA, and the associated legislation and guidance. This chapter must be read in conjunction with the other chapters of this manual, all relevant legislation, and the Attorney General’s guidelines on disclosure. Finally, the prosecutor is reminded to be aware of any redaction requirements under GDPR and apply them as appropriate throughout the process and procedure set out in this chapter.

In this chapter, “Part 2 POCA proceedings” means disclosure in connection with:

• An application for a Restraint Order to preserve assets so that they are available to make a Confiscation Order
• An application for a Confiscation Order, and
• Applications to enforce a Confiscation Order, such as for a Compliance
• Order or for an Order to appoint an Enforcement Receiver.

The following matters fall outside the scope of this chapter:

• Management Receivership applications under sections 48 and 49 POCA,
• Civil Recovery proceedings under Part 5 (Recovery of the Proceeds etc of Unlawful Conduct),
• Applications for investigation orders under Part 8 (Investigations) POCA,
• Mutual Legal Assistance under the POCA (External Requests and Orders) Order 2005 and European Union Mutual Recognition under The Criminal Justice and Data Protection (Protocol No.36) Regulations 2014. The 2014 Regulations have now been repealed, subject to saving provisions for extant requests, and
• The Trade and Cooperation Agreement between the EU and Euratom and the United Kingdom, 31 December 2020.

The Law: General Background

As has been mentioned previously in this Guidance the CPIA applies to all criminal investigations commenced from the 1 April 1997.

In cases tried in the Crown Court, the CPIA applies from the arrival of the case in the Crown Court (section 1(2)) and ceases to apply upon the conclusion of the trial (section 7A (1) (b)). Where the CPIA applies, it displaces common law duties of disclosure (section 21).

In criminal proceedings to which the CPIA does not apply, disclosure is governed by the common law: R (on the application of Nunn) v Chief Constable of Suffolk Constabulary and another 2014 UKSC 37; [2015] AC 225, paragraph 19.

There is no requirement to schedule unused material at common law (unlike under the CPIA).

It is important that prosecutors approach disclosure in a “thinking manner”; disclosure should never be reduced to a “box- ticking exercise” (R v Olu, Wilson and Brooks [2010] EWCA Crim 2975; [2011] 1 Cr App R 33 at paragraph 42). (See also:Attorney General’s Guidelines on Disclosure.)

In R (on the application of Nunn) v Chief Constable of Suffolk Constabulary and another 2014 UKSC 37; [2015] AC 225, the Supreme Court considered the continuing duty of disclosure at common law and two key principles were explained.

First, that the test for disclosure is one of fairness. The Court cited with approval the decision of the House of Lords in R v H [2004] UKHL 3, [2004] 2 AC 134:

“Fairness ordinarily requires that any material held by the prosecution which weakens its case or strengthens that of the defendant, if not relied on as part of its formal case against the defendant, should be disclosed to the defence.”

Second, that the common law duty of disclosure (before and since the enactment of the CPIA), is not the same at each stage of the proceedings; for example, prior to the case being sent to the Crown Court, before sentence, pending appeal, and post appeal. Though R v Nunn did not consider disclosure in the context of confiscation proceedings, it does provide authority for the duty of disclosure being tailored to the context: thus, the duty owed to a defendant at the preliminary stages of a criminal prosecution (for example at the time of a bail application) is different from the duty owed while preparing for and during trial. The disclosure duty is again different after a conviction; at that stage the defendant has been convicted and the duty of disclosure relates to such material as might cast doubt on the safety of the conviction.

There is specific case law relevant to disclosure in the context of applications for Restraint Orders (in particular, where such applications are made without notice). In Director of the Serious Fraud Office v A [2007] EWCA Crim 1927; Lloyds Rep FC 30, Hughes LJ stated:

“Because the initial application is commonly made without notice, the court will not at that stage hear evidence on both sides. For this reason, as with other without notice applications, the court insists on full and complete disclosure by the applicant of everything which might affect the decision whether or not to grant the order. There is a high obligation on the applicant to put everything relevant before the Judge, whether it may help or hinder his cause”.

In Re-Stanford International Bank [2010] EWCA Civ. 137; [2011] Ch. 33 the Court of Appeal (Civil Division) gave useful guidance and noted that the duty of candour:

“…consists in a duty to consider what any other interested party would, if present, wish to adduce by way of fact, or say in answer to the application, and to place that material before the judge….in effect, the prosecutor seeking an ex parte order must put on his defence hat and ask himself what, if he were representing the defendant or a third party with a relevant interest, he would be saying to the judge, and, having answered that question, that is what he must tell the judge”.

In R (on the application of Virdee) v NCA [2018] EWHC 1119 (Admin), the High Court added that the ex parte (without notice) applicant:

“Must make proper inquiries before making the application and material facts include additional facts that would have been discovered if inquiries had been made”.

The effect of these authorities is that if there is a weakness in the prosecution’s application, it must be clearly drawn to the attention of the court: the prosecution’s obligations are unlikely to be met if the weakness is contained within exhibits annexed to the witness statement in support, and not set out in the statement itself.

CPS Proceeds of Crime Division (CPS POCD) is responsible for all Restraint Order applications conducted by the CPS.

The common law imposes a duty of disclosure on an applicant for a Restraint Order. This duty is to disclose to the defendant any material which might influence the judge in exercising their discretion on whether to make a Restraint Order. Where the application is without notice, the duty of candour requires the prosecution to draw that material to the attention of the court and make such submissions as would have been made had the defendant been present (see section 2 above). If there is sensitive material, see sections 3.4 and 3.5 below.

Where a Restraint Order is imposed at the investigative (pre-charge) stage, the court must (unless it decides not to and gives reasons) include provision in the order for the prosecutor to report on the progress of the investigation. Prosecutors must reconsider disclosure on each occasion a progress report is submitted to the court and served on the restrained persons.

Where the Financial Investigator’s (FI) report is in written form, it must contain a declaration that the common law duty of disclosure has been complied with. Such a report should be served on the alleged offender, as well as any other persons restrained by the order, unless the prosecutor obtains permission from the court to withhold some, or all, of the report on grounds of public interest. If information has come to light that might undermine the appropriateness of the order continuing, this must be disclosed to the court and the restrained persons. If there is sensitive material, which meets the test for disclosure, a PII application must be considered.

If the prosecutor is aware of material which meets the test for disclosure, but the material is sensitive, the prosecutor should refer to this manual and the section below on Public Interest Immunity (PII) applications. The prosecutor must also notify their LM1 (Legal Manager).

If the prosecutor is aware that highly sensitive material exists (material, including CHIS material which, should it be compromised, would lead directly to the loss of life, or directly threaten national security) which may meet the test for disclosure, the prosecutor must notify their Unit Head. The prosecutor and their Unit Head should refer to this manual.

This chapter is to be read in conjunction with the other chapters of this manual, which deal with the procedure for Type I, Type II and Type III applications. This section provides additional guidance in Type III applications.

In without notice restraint applications, the application will be Type III and must be authorised by a Chief Crown Prosecutor (CCP) in advance of the application. The reviewing lawyer must attend the hearing.

The court must not publish the application on the court list or notify the defendant of the application.

The court must be asked to exclude the usher from the PII hearing.

The PII application must be made in advance of the application for the Restraint Order; the application for the Restraint Order can immediately follow the PII application if the application is without notice, as the court will sit in private for both hearings.

If the restraint application follows the PII hearing, the court must be asked to use new tapes to record the restraint hearing, rather than use those used for the PII hearing. This is because the defence are entitled to ask for a transcript of the restraint application: to continue with the same tapes risks the transcript containing details of the PII hearing.

The draft order, redacted and non-redacted statements, following review by the prosecutor, will be served on the judge personally in advance of the hearing by the FI.

If the PII hearing is successful, the order and redacted statement will be served on the defendant. The statement will not identify that it has been redacted.

The court must be asked to return the non-redacted statement to the Financial Investigator (FI) in court, at the conclusion of the PII hearing.

A Covert Human Intelligence Source (CHIS) is defined by the Regulation of Investigatory Powers Act 2000, Part II (see the other chapters of this manual).

In all restraint applications, prosecutors must establish whether a Restraint Order is being sought against a CHIS. If so, the appropriate Unit Head in CPS POCD should be informed. Where the OIC/SIO does not know the answer, they must make the relevant enquiries.

Where a Restraint Order is being sought against a CHIS, the court should ordinarily be informed of the defendant’s status, and, where necessary, a PII application should be made (see the other chapters of this manual and A v ACC [2017] EWHC 301(QB)).

Where the application for a Restraint Order is made without notice, the PII application will be Type III (see section 3.5 above); where the application for a Restraint Order is on notice, the PII application will usually be Type II. If a Type II application is being made, prosecutors should consider the application being made on a different day to the restraint application, and, in any event, by the same judge who will hear the Restraint Order application. 

Section 41(7) of the POCA, enables the Crown Court, when making a Restraint Order, to order a defendant to disclose information, for the purpose of making a Restraint Order more effective. Such material is known as “compelled material”.

Whilst the prosecution can use compelled material in restraint, confiscation, and enforcement proceedings, and any proceedings for perverting the course of justice or perjury arising out of the restraint proceedings, such material cannot (generally) be used in the criminal prosecution.

For the purposes of disclosure, the CPS is indivisible; once compelled material is provided by the defendant, it becomes material in the possession of the prosecutor which falls to be considered for the purposes of disclosure.

The prosecutor responsible for the restraint proceedings must provide the prosecutor with responsibility for the criminal prosecution with a copy of the compelled material, to enable the prosecutor to comply with their disclosure obligations.

The compelled material must not be disclosed to the investigation team, and should only be viewed by the prosecutor, prosecuting counsel, the FI and the disclosure officer.

Where the FI is not dealing solely with obtaining a Restraint Order(s), or the confiscation proceedings, but is actively involved in gathering evidence to build the prosecution case, the compelled material should not be disclosed to the FI.

Where the prosecutor responsible for the criminal prosecution believes that compelled material should be disclosed to a co-accused, they must liaise with CPS POCD, and if disclosure is still considered appropriate, notify the court that made the Restraint Order (usually the Crown Court), and seek the permission of the court. There must be no disclosure of compelled material to a co-accused without leave of the court. The defendant who supplied the material should be given the opportunity to make representations to the court, as should the co-accused.

There may be circumstances where compelled material meets the test for disclosure, for example, in respect of a co-accused or a third party.  Where a document that remains confidential is disclosed pursuant to the common law, the recipient is subject to an implied undertaking not to use it for a collateral purpose: Taylor v SFO [1999] 2 AC 177.

Rule 33.40 of the Criminal Procedure Rules provides a legislative basis for the Crown Court to order disclosure in relation to restraint proceedings for the purposes of deciding whether property is “realisable property” (see section 83 of POCA).

It should also be noted that Rule 33.45 of the Criminal Procedure Rules allows for disclosure of evidence relating to the restraint and receivership proceedings for the purposes of the criminal proceedings.

All confiscation proceedings commenced by CPS Areas and/or CCDs must be transferred to CPS POCD once the timetable has been set.

Section 18 POCA enables the court to order the defendant to provide information to assist the court in carrying out its functions, including whether to make a determination under section 10A POCA.

The prosecutor must provide a statement under section 16 POCA. This must contain statements of relevant matters (as to which see section 16(3) – (5) set out below). In summary, the prosecutor will set out its case as to: (i) the defendant’s ‘criminal lifestyle’ (if the prosecutor believes he has one); (ii) whether the defendant has benefited from his criminal conduct and (iii) the amount of any such benefit. The statement: must identify any matters which are relevant to those considerations; should articulate any known issues; and may respond to any section 18 Statement.

The defendant may be made subject to an order under section 17 to respond to the section 16 Statement. Such an order may require him to indicate the extent to which any allegation in the section 16 Statement is accepted and, to the extent it is not accepted, to give particulars. The defendant may seek further disclosure at this point. Further exchanges of section 16 and 17 Statements may follow. 

In R v Benjafield (2001) 2 Cr App (S) 221, it was noted:

“A statement serves the useful purpose of forewarning the defendant of the case of the prosecution which he will have to meet as to his assets. It should assist the defendant by making clear the matters with which he has to be prepared to deal. It is right that, as the rules require, the prosecution should identify any information which would assist the defendant.”

The obligations to provide disclosure in the section 16 Statement are contained in section 16(3)-(5) of POCA. The content of the obligation depends on whether the prosecutor believes the defendant has a criminal lifestyle, or not:

3. If the prosecutor believes the defendant has a criminal lifestyle the statement of information is a statement of matters the prosecutor believes are relevant in connection with deciding these issues:

(a) whether the defendant has a criminal lifestyle

(b) whether he has benefited from his general criminal conduct

(c) his benefit from the conduct.

4. A statement under subsection (3) must include information the prosecutor believes is relevant:

(a) in connection with the making by the court of a required assumption under section 10

(b) for the purpose of enabling the court to decide if the circumstances are such that it must not make such an assumption.

5. If the prosecutor does not believe the defendant has a criminal lifestyle the statement of information is a statement of matters the prosecutor believes are relevant in connection with deciding these issues:

(a) whether the defendant has benefited from his particular criminal conduct,

(b) his benefit from the conduct.

In summary, section 16 imposes a duty on the prosecution to state all matters which are “relevant” to: whether the defendant has a criminal lifestyle (where that is alleged); whether he has benefited and the amount of such benefit. Thus, the statute imposes on the prosecutor a duty that is akin to the duty of candour, in that the prosecutor must state not only those matters which are relied upon for a particular proposition, but all matters which are “relevant”.

The section 16 statement, as well as addressing the question of the defendant’s benefit (which, as explained above, must be addressed), may also include what is known about the extent of his realisable property. It is for the defendant to prove the extent of his realisable property (see section 7(2) POCA). However, in practice the prosecution is often in possession of evidence as to the defendant’s assets. For example, the prosecution may claim that the defendant has a one hundred percent beneficial interest in a certain property. Where that is alleged, as a matter of fairness the statement should also include any information that undermines that assertion, for example, material which showed that the defendant’s wife owned the property as joint tenant and claimed to have contributed to the mortgage. Having revealed that matter, the statement may then go on to rebut the wife’s claim, by showing the transfer of title into joint tenants only took place after the defendant was charged, that the wife did not work, and that monies the wife claims to have paid towards the mortgage in fact came from the defendant.

See section 2 above.

As noted above, the prosecution is required by section 16 POCA to make a statement of all matters that are (in summary) relevant to the extent of the defendant’s benefit, if any, from criminal conduct. This entails a corresponding duty to disclose the material on which such statements are based. In practice, therefore, the duty imposed by section 16 leaves little room for the common law, subject to two points. First, the common law imposes a duty of ensuring fairness in the confiscation proceedings. To the extent that the prosecutor has not disclosed something in accordance with section 16 which affects the fairness of the proceedings, it should be disclosed. Second, the prosecutor may be aware of material which affects the ability of the court to make a Confiscation Order at all, as where there are civil proceedings (section 6(6)) or where the benefit alleged is “joint” benefit and a Confiscation Order has already been made and paid. 

Should material come to light that should have been disclosed during the trial, or undermines the safety of the conviction, then the procedures set out in this manual must be followed. Such material may also be disclosable in the confiscation proceedings.

CPS POCD is responsible for the enforcement of CPS obtained Confiscation Orders, where the CPS is deemed to be (under a MOU with HMCTS) the Lead Enforcement Agency (LEA).

This section should be read in conjunction with the guidance on Common Law Disclosure set out at section 2 above.

Disclosure arises in enforcement cases when proceedings to enforce a Confiscation Order commence or following disclosure issues being raised by a defendant or third party.

It is less likely that disclosure issues will be raised by the defendant or a third party in the time to pay period. This is because any disclosure which the prosecution is required to be make, has already been made during:

a. Any restraint proceedings,

b. The trial,

c. In the confiscation proceedings, or

d. Any appeal.

and the court has already considered all the material before it, and any issues raised, before making the Confiscation Order. 

CPS POCD is responsible for all CPS applications under sections 19-22 POCA. These applications are made by a prosecutor for the court’s reconsideration of the making of a Confiscation Order, where an order has not been made (section 19); the making of a decision on benefit where an order has not been made (section 20); the reconsideration of benefit where an order has been made (section 21); and the reconsideration of the available amount where an order has been made (section 22).

Applications under section 23 POCA (variation of the order due to inadequacy of the available amount) are made by the defendant, and in some circumstances by the prosecutor. If the CPS is in possession of material which supports the application, this must be disclosed to the defence. If the material is sensitive, see sections 3.4 and 3.5 above.

Applications under sections 24, 25 and 25A POCA (to discharge a Confiscation Order in various circumstances where there are minimal amounts outstanding) are the responsibility of the designated officer of the magistrates’ court. CPS Areas and/or CCDs should refer such matters to CPS POCD.

If CPS POCD, or a CPS Area and/or a CCD is asked by the designated officer of the magistrates’ court to comment on whether an application should be made to the Crown Court under sections 24, 25 and 25A POCA, the CPS must respond in writing, setting out its reasons, providing any material which would undermine or support the application, and inviting the designated officer to provide the CPS response to the Crown Court and the defendant.   The CPS Area and/or CCD may ask CPS POCD to deal with this correspondence following referral of the case.

If material which undermines or supports an application under sections 24, 25 and 25A POCA, is sensitive material, the CPS should intervene in any Crown Court proceedings, and consider whether a Public Interest Immunity Application should be made (see 3.5 above).

Applications under sections 19, 20, 21 POCA should only be made by CPS POCD. A court proceeding under sections 19, 20 and 21 will proceed under section 6, subject to relevant modifications. The court may make a Restraint Order pending the determination of the application. The following sections of this chapter are therefore relevant and should be considered: section 2 (General principles of disclosure at common law); 3 (Restraint); and 5 (Confiscation).

An application under section 22 POCA is an application to increase a Confiscation Order on the basis that, since the Confiscation Order was made, the amount available has increased. The prosecutor is referred to section 22(4) POCA which sets out the test the court must apply: “the court may vary the order by substituting for the amount required to be paid such amount as it believes is just”.

The prosecutor is also referred to R v Padda [2013] EWCA Crim 2330, and R v S [2019] EWCA Crim 569, where the application of section 22(4) and the exercise of the judge’s discretion are considered.

Judicial discretion: The prosecutor must make the court and defendant aware of any material, which might influence the judge, in exercising their discretion, in deciding whether to make an order under section 22 POCA. If material is sensitive, see sections 3.4 and 3.5 above.

Prosecutors are reminded that disclosure is an ongoing process, and that the prosecutor’s duty continues through to the end of the case and any appeal. For example, the prosecutor should re-consider disclosure on receipt of correspondence from the defence and interested parties, and on receipt of replies and responses to statements of information. Prosecutors must be aware of the guidance in this manual for post-conviction requests.

“Prosecutors must be alert to the need to provide advice to and, where necessary, probe actions taken by the investigator to ensure that disclosure obligations are met… There should be no aspects of an investigation about which prosecutors are unable to ask probing questions” (Attorney General’s Guidelines on Disclosure).