Asset Forfeiture

Does current UK asset forfeiture law strike the correct balance between the interests of the general public in the recovery of the proceeds of crime and the rights of the defendant?

It is not a matter in dispute, nor simply the rabid knee jerking of the tabloid press, that the interests of the general public dictate that crime should not pay, and that criminals should be stripped of assets obtained through their criminal conduct. The rights of defendants subject to confiscation proceedings, and indeed the basis of prosecution in the UK, that the Crown brings the case and therefore it is for the Crown to prove their case, must however be weighed against this. Asset forfeiture law in the UK, when challenged on the grounds of proportionality in the case of R v Smith1, elicited this response at para 23 from their Lordships;

"If in some circumstances it can operate in a penal or even a draconian manner, then that may not be out of place in a scheme for stripping criminals of the benefits of their crimes. That is a matter for the judgment of the legislature, which has adopted a similar approach in enacting legislation for the confiscation of the proceeds of drug trafficking."

Tackling financial crime has been held by the European Jurisprudence to be a legitimate aim, and the UK confiscation regime a proportionate means of achieving that aim (as in the case of Philips v United Kingdom2).

The present legislative position has its origins in the failure to recover the proceeds of crime in Operation Julie3. The findings of the parliamentary Hodgeson Committee established after the conclusion of the case (where £750,000 worth of assets although traced were not able to be recovered) were largely enacted in the Drug Trafficking Offences Act 1986. This act itself was superseded by the Drug Trafficking Act 1994, and crime other than drug trafficking came into the regime following the Criminal Justice Act 1988, superseded by the Criminal Justice Act 1993 and the Proceeds of Crime Act 1995.

UK asset forfeiture law now stems from the Proceeds of Crime Act 2002 (hereafter POCA). S6 of the Act sets out the circumstances where a confiscation order will be made, and the process is mandatory where the Crown requests it.

The principle of recovery of the proceeds of crime is given strong backing through the way the Court must calculate criminal benefit and the amount in which any order should be made.

POCA requires the Court to determine whether the defendant has a criminal lifestyle4 and if so whether he has benefited from his general criminal conduct prior to determining the level of benefit from his particular criminal conduct (i.e. his substantive criminal offences). The criminal lifestyle provisions5 represent the greatest change from the previous legislative regime. Criminal lifestyle confiscation proceedings require the Court to make the assumptions that any property transferred to the defendant during the relevant period (6 years prior to commencement of proceedings), any property obtained by the defendant within the relevant period, and any expenditure by the defendant within the relevant period shall be held to be criminal benefit unless the defendant can show the assumption is incorrect or that there would be a serious risk of injustice if the assumption were made.

It is clear that the "criminal lifestyle" provisions are the main reason as to why confiscation proceedings are often referred to as having draconian outcomes, as the assumptions can result in vast figures added to the defendant's particular criminal benefit (i.e. what he has obtained through his substantive offending).

The value of the benefit to a defendant is defined as the value of property (or pecuniary advantage) obtained through or in connection with criminal conduct.

Of note are the recent House of Lords decisions in the cases of R v May6 (and the linked cases of Green7 and Jennings8 ), where it was confirmed that the value of the benefit is the total value, not the net profit to a defendant9, and that "obtained" means by the relevant defendant10. Perhaps most important in consideration of the question posed by this essay, where two or more defendants obtain property jointly, each is to be regarded as obtaining the whole of it11. In a conspiracy, the Court should consider the facts when deciding whether a defendant has "obtained" and therefore benefited12.

This can result in confiscation orders, particularly in the case of multiple defendants, where benefit figures from the particular criminal conduct alone dwarf the actual criminal property involved.

When applying the...

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