Member Article

Confiscation Orders Extended by the House of Lords

People convicted of crimes for the first time or those deemed less serious need to be aware of the recent widening of the confiscation order regime. These orders are essentially the means by which the prosecutor may seize a convicted person’s assets, which are said to be the proceeds of crime.

Historically, confiscation orders could not be imposed when the courts passed down a sentence of an absolute or conditional discharge. Such sentences are imposed under the Powers of Criminal Courts (Sentencing) Act 2000 and are generally seen when it is a person’s first time before the court, when the offence warrants a lesser sentence or there are particular mitigating circumstances. They are usually viewed as a ‘telling off’ by the court, as opposed to a punishment. The Court of Appeal in the case of R v Clarke in 2009 held that the courts do not have the power to impose confiscation orders following the conviction for an offence where the defendant is made subject to a discharge. The view being that it was inappropriate to impose an order where the court felt that punishment was inexpedient.

However, the position has now changed.

The House of Lords has decided that the Proceeds of Crime Act 2002 does impose a duty on the Crown Courts to impose a confiscation order when the sentence is a discharge. The courts must do so when the defendant is convicted in the Crown Court and when the prosecutor requests that an order be made or the court believes it is appropriate to do so. They must then decide if the defendant has a criminal lifestyle and whether they have benefited from their criminal conduct. If so, they will proceed to make a confiscation order

The Lords stated in the case of R v Varma in October 2012 that the Proceeds of Crime Act 2002 does create an absolute duty for the courts to impose a confiscation order when the above criteria are met, regardless of the sentence imposed.

Mr Varma had pleaded guilty to three charges of evading duty by smuggling tobacco into theUKthroughGatwickAirport. A confiscation order was later imposed and he was ordered to pay £1,500 in settlement. However, he later challenged the order and the Court of Appeal found in his favour. The case was appealed before the House and they found to the contrary. The order was therefore restored to the sum of £1,500.

Andrew Swan, Head of the Financial Crime Unit at Newcastle-based solicitors Short Richardson & Forth LLP commented: “Whilst the House of Lords has given a literal view of the Act, it does seem rather harsh that confiscation proceedings could flow from cases where the courts have deemed punishment to be inappropriate”.

“Mr Varma faced a low value order, but very often I see defendants subject to confiscation orders running to millions of pounds. They can potentially lose everything they have. Being discharged from the court and then losing your home and life savings seems somewhat disproportionate”.

This was posted in Bdaily's Members' News section by Andrew Swan .