One of the lesser known, often poorly understood provisions of the confiscation regime under the Proceeds of Crime Act 2002 (POCA) is section 22, which provides an opportunity to the prosecutor to invite a ‘reconsideration of the available amount’. For many defendants who have been through the process, had an order made and in many cases satisfied that order in full, the first they have heard of that section is the letter informing them that such an application is to be made.
What is a ‘reconsideration of the available amount’?
So what does it mean? The key to understanding the provision is to recall that, at the confiscation stage, the court made an order in the lower of two sums – the first being the ‘benefit’ that the defendant had received from crime, the second being the amount he had available at that time (including any so-called ‘tainted gifts’). The idea of section 22 is that, where the amount then available was lower than the benefit, it should be possible to go back and recoup the rest (or at least, as much as might become available) at some point in the future.
The logic of that would be hard to argue with if the benefit figure genuinely represented what the defendant had made from crime, and the amount that becomes available later came either from further crimes, or from a windfall (a lottery win is often cited as an example, but a rise in the value of real property is the most common in practice). But unfortunately it is far more common for the section to be used less fairly.
What if the original benefit figure was wrong?
Part of the problem is the way that benefit is calculated in the first place. It can include for instance the value of property that the defendant did not retain, or that he obtained together with others. In the latter case, where those others have also been prosecuted and had orders of their own, the defendant’s only protection is that the state cannot collect the same amount twice over.
When the court makes the original order, many defendants will not pay too much attention to the benefit figure when the available amount is lower: it is only the lower amount that matters on the day, after all; many will not realise that the higher figure can come back for another bite. In the most unfair cases of all, a defendant who has genuinely made efforts to rehabilitate himself and received entirely legitimate earnings could find those targeted by the state, raising the dismal question of whether such efforts will ever be worthwhile.
What can be done to defend these cases?
Thankfully, there is one saving grace about section 22, in contrast to most other provisions of the confiscation regime. That is the element of judicial discretion: under subsection 22(4), the court may (not shall) vary the order as requested, and the variation it makes is to substitute the amount it believes is just. So while the benefit figure itself may stay as it is, the court may (this time) listen to arguments about (for instance) where the money from the offence actually went, and where the defendant’s money actually comes from.
That is not, of course, to underestimate the challenge: courts do not always exercise their discretion in favour of convicted defendants, especially (as is often the case) where the judge making the decisions is the same one who heard the trial, and/or who made the original order. The Court of Appeal will rarely interfere with the judge’s discretion, though they may have a role where complex legal issues are at stake.
What this all means in practice is that there is invariably some real benefit in seeking advice on how to respond to such an application, and (in contrast, perhaps, to the experience of the original order) some real hope of achieving a just result. The theory of section 22 is indeed that some criminals may never finish paying off what they gained from crime. But there is an opportunity for the many defendants who don’t fit that picture to ensure they are not caught up in the same draconian net.
If you’d like to discuss any of the issues raised in this article with one of our solicitors then please contact us in the strictest confidence.
John Binns is a partner at BCL specialising in all aspects of business crime, with a particular interest in confiscation, civil recovery and money laundering under the Proceeds of Crime Act 2002 (“POCA”). His business crime experience includes representing suspects, defendants and witnesses in cases invoking allegations of bribery and corruption, fraud (including carbon credits, carousel/MTIC, land-banking, Ponzi and pyramid scheme frauds), insider trading, market abuse, price-fixing, sanctions-busting, and tax evasion. He has coordinated and undertaken corporate investigations and defended in cases brought by BEIS, the FCA, HMRC, NCA, OFT, SFO and others.