POCA: A new future for the defendant’s “benefit”
The introductory text to the Proceeds of Crime Act 2002 places the defendant’s benefit at the heart of the confiscation regime. The Act was established “to provide for confiscation orders in relation to persons who benefit from criminal conduct”. But what is meant by the defendant’s “benefit” has been neither uncontroversial nor constant.
When, in 1984, the Hodgson Committee first proposed the adoption of a confiscation regime in the UK, the framework defined a defendant’s benefit by reference to her net profit from criminal conduct. The current confiscation regime under POCA 2002 defines “benefit” much more widely, and includes any property “obtained” by the defendant as a result of or in connection with her criminal conduct.
In September of this year, the Law Commission published their long-awaited consultation paper addressing Confiscation under Part 2 of POCA 2002. The paper devotes an entire chapter to an evaluation of the test for a defendant’s “benefit” under the current statutory scheme.
The Law Commission’s consultation paper proposes a framework for a new test for determining a defendant’s “benefit” in confiscation proceedings and provides an opportunity to reflect upon whether “benefit” should be defined by reference to profits or proceeds.
The Law Commission’s Proposal: The Defendant’s Gain
In proposing a new test for the defendant’s benefit, the Law Commission starts by establishing what the confiscation regime is intended to achieve. The primary aim of the legislation should be to deprive the defendant of her benefit from criminal conduct. The regime is thus intended to be neither retributive nor punitive but deprivatory.
The Commission suggests a model for ascertaining “benefit” based on holding persons to account financially for the property they have “gained”. The revised model replaces “obtaining” and property law concepts with the concept of “gain”. In determining a defendant’s “benefit” the Court should:
- determine what was gained by a defendant as a result of or in connection with, the criminal conduct for which she was convicted; and
- Make an order that the defendant’s benefit is equal to that gain, unless the court is satisfied that it would be unjust to do so because of the defendant’s intention to have a limited power of control or disposition in connection with that gain.
“Gain” is a concept familiar to criminal practitioners. It is defined by the Fraud Act as including “keeping what one has”, as well as “getting what one does not have”.
Unlike “obtaining”, the concept of “gain” has the advantage of not being linked to a large body of case law that has sought to attach principles of property law to confiscation, resulting in caveats and exceptions which seek to achieve the “right” result. These difficulties are perhaps most apparent in how the courts have approached the question of “benefit” in the case of couriers and mere custodians.
The focus upon the defendant’s intention in the second limb of the test is designed to ensure that, for example, couriers and other bailees will not necessarily fall within the ambit of the test for establishing the defendant’s “benefit”. The proposed regime thus provides a framework which appeals to a common sense view of a defendant’s benefit and avoids the apparent injustice which has plagued the current regime.
Between Proceeds and Profits
In its proposal for a new test, the Law Commission revisits the recommendations of the 1984 Hodgson Committee Report with which the confiscation regime began. The Law Commission explores whether a framework based on net profits, as set out by the Hodgson Committee, should form the basis of their proposed model.
The hallmark of the Hodgson Committee’s approach was the aim of restoring the status quo before the offences were committed. The defendant will therefore have the ability to offset from their benefit figure any expenditure made from the proceeds of crime and the value of any assets seized by the authorities.
The Law Commission rejects the Hodgson Committee’s approach and proposes a framework that does not allow for deductions. Like the current scheme, the Law Commission’s proposed model is based on gross proceeds from criminal conduct.
There may be good reasons not to account for expenditure from the proceeds of crime within the benefit figure. These include the desire to avoid an accountancy exercise which treats a criminal enterprise as if it were a legitimate business.
But there are also good reasons to support a model which does not count the value of assets seized within the benefit figure. The Law Commission states that a drug dealer who has gained money from crime would no doubt be seen by the public as having had the benefit of that money, even if is seized. It is evident however that one of the greatest merits of an approach to the benefit figure which is based on net profit is that it does not include within the defendant’s benefit assets which have already been recovered by the state and thus prevents double counting which is plainly unfair.
The Law Commission’s proposal recognises this advantage. The consultation paper concludes that while the value of seized assets should form part of the defendant’s benefit, they should not, as they presently do, form part of the recoverable amount because the state already has the goods in question. The proposal provides a welcome link between the model envisioned by the Hodgson Committee and the future approach to the benefit figure in confiscation proceedings.
Nneka Akudolu and Redmond Traynor
 POCA 2002 introductory text.
 POCA 2002 section 76 (4).
 Consultation Paper 5.85.
 Consultation Paper at 12.177.
 Consultation Paper at 12.186.
 Fraud Act 2006, section 5 (3).
 It is now well established that couriers do not “obtain” for the purposes of the Act (R v Allpress  EWCA Crim 8  2 Cr App R S 58. But as the consultation makes clear, on a strict application of property law principles to section 84(2)(h) POCA 2002, couriers would “obtain” and thus “benefit”.
Derek Hodgson, Profits of Crime and their Recovery: The Report of a Committee chaired by Sir Derek Hodgson (Cambridge Studies in Criminology: London 1984).
 Consultation paper 12.78; This idea is familiar from the case law: R v Banks  2 Cr App R S 110 (CA); R v Waya  UKSC 51.
 Consultation Paper 12.185.
 Consultation Paper 15.42.