Blog 23rd Jun 2014

The proceeds of crime act 2002: Is it fit for purpose?

In the conjoined cases of R v Ahmad; R v Fields [2014] UKSC 36, the Supreme Court last week gave further guidance on the calculation of ‘benefit’ in multi-handed confiscation proceedings brought under the Proceeds of Crime Act 2002 (“the Act”). Whilst the primary purpose of the judgment was to cast light on this notoriously difficult area, it also emphasised once again that the legislation, described by the Court as ‘poorly drafted’, is materially deficient.

Indeed, ‘poorly drafted’ is perhaps an understatement. The plain fact is that the intricacies of the Act (which were largely shared by its predecessors, the Criminal Justice Act 1988 and the Drug Trafficking Act 1994), are such that the legislation has become all but impossible to apply in any meaningful sense.

One only has to examine the decision of the Court last week in order to make good on this contention. The essence of the judgment itself can be expressed in relatively simple terms. Defendants will ‘obtain’ property for the purposes of the Act if they assume the rights of the owner in relation to such property. In multi-handed cases, co-conspirators will either obtain such property on a several basis, in which case their benefit will be limited to their identifiable share, or on a joint basis. If the latter, they will each be deemed to have benefited in a sum equal to the full value of the property in question. Multiple recovery against each of them in that sum will, however, no longer be permissible. Rather, they will be jointly and severally liable for the discharge of it, but only once. After that has been achieved, and no matter which conspirator has achieved it, there will be no scope for seeking to enforce the same sum against other co-conspirators convicted at a later point in time.

If these conclusions can be simply expressed, however, the reasoning behind them is correspondingly dense. In arriving at its views, the Court was required to undertake a labyrinthine exercise in statutory construction and to examine in detail complex issues of property law and joint ownership. This is by no means the only time in recent memory that this exercise has been necessary. On the contrary, the judicial landscape is littered with similar decisions on every aspect of the confiscation legislation, giving rise to a significant body of jurisprudence as a result.

In practical terms, the situation is hopeless. At the conclusion of a complicated fraud trial, the spectre of lengthy confiscation proceedings now hangs over both busy Crown Court practitioners and judges alike. The legislation is largely impenetrable, the authorities lengthy and internally inconsistent and the facts of the individual cases complex. The net result is that most cases end up either being fudged, or flawed on any proper legal analysis. Either way, one party or the other misses out, either the defendant because he is on the wrong end of a decision which has no basis in common sense or fairness, or the Crown because the legislative purposes of the scheme have not been met.

This situation has persisted now for 20 years at least. In that light, the time must have come to rip up the statute book and to start again. Notwithstanding the deficiencies of modern parliamentary drafting, it must be possible to devise legislation which accurately and succinctly defines the salient features of the scheme, and which renders otiose the judicial guesswork presently required. Equally, it must be possible to clarify the extent to which concepts imported from the civil law are to apply to the scheme, or not. Unless and until this happens, the confiscation regime will continue to fail both defendants and the Crown alike. That serves the best interests of no-one.

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