Serious About Proceeds Of Crime Act

The House of Commons rung in the New Year on the 5^th January with the second reading of the Serious Crime Bill, a seriously serious Bill with the aim of ensuring that law enforcement agencies have effective legal powers to bring to justice serious and organised crime.

The Bill contains new laws designed to tackle various serious offences including terrorism, professionals who participate in their client’s criminal activities and cyber crime.

One of the many areas of the Bill that will concern libertarians fearful of the growing powers of the State however will be the Bill’s proposed reforms to the Proceeds of Crime Act 2002. The Bill seeks to extend the powers currently enjoyed by the Courts under the 2002 Act, an Act which is already widely regarded by most practitioners as excessive and draconian.

These increased powers will come as a disappointment to many practitioners frustrated by the unfairness and unpredictability of the current 2002 Act. The Proceeds of Crime Act is one of the most litigated, misunderstood and misapplied pieces of legislation in the Criminal Justice System. Many would argue that that Government should be repealing the Act in its entirety rather than adding to it.

Under the proposed provisions of the Serious Crime Bill the Court’s powers under the 2002 Act will be extended such that judges will be able to make a determination on the extent of any third party interests in property, reduce the maximum time allowed for payment under any confiscation order (which is currently only six months), impose compliance orders (including restrictions, prohibitions and travel bans), increase prison sentences for non payment and lessen the test when the authorities apply for a restraint order.

Currently a third party to confiscation proceedings cannot have their interest in property considered by the Court until after the confiscation order is made and then enforced. The Serious Crime Bill will give the Court the power to determine the extent of third party interests in property at the time of making any order. Alas in practice this might not be as easy or as desirable as first thought. Confiscation proceedings are already widely criticised for their complexity and length. Allowing third parties a right of audience to these initial proceedings will inevitably drag the process out even longer. Furthermore, the extent or even the existence of a third party interest is not always known from the outset. It is not difficult to imagine a situation where a third party interest would only ever be discovered after the confiscation order was made and during the secondary enforcement proceedings. The Bill is unclear as to what would happen if that third party interest only came to light after the confiscation order was made.

The most worrying change to the 2002 Act will be the shortening of the maximum period of time allowed to pay any sum owed under a confiscation order. Currently six months, the Bill proposes to reduce this to three. The Court can extend this to a maximum of six months but only in exceptional circumstances, where the defendant has made all reasonable attempts to realise his property and the period of extension must be as short as it can be. More often than not the realisable asset determined by the confiscation order will be equity in property. It is far from inconceivable that a person subject to a confiscation order who is already serving a prison sentence will face difficulties realising this equity in such a short space of time.

“Serious and organised crime in Britain must be fought on many fronts”, Theresa May told MPs when she launched the new legislation. The Notes accompanying the Bill claim that some defendants would rather serve default prison sentences than pay what is due under a confiscation order. Even if this is true, it is questionable that stricter time limits and longer prisons sentences will assist enforcement of confiscation orders. What does seem inevitable however, is that those defendants who are genuinely unable to satisfy their orders in such a short timeframe will be more heavily penalized. 

Finally, for those readers curious as to whether there are any positives changes for a defendant proposed by the Bill, under Clause 8 it is now possible for a confiscation order to be discharged where the defendant has died prior to making his final payment. Now that is SERIOUS!