R v Ryan: Crown Court increases confiscation order using new POCA compensation direction powers

Southwark Crown Court has applied the new principal objective and compensation direction provisions of the Proceeds of Crime Act 2002 (POCA) to increase a confiscation order, directing that the money go to victims of a carbon credits fraud. Sections 5A and 22A came into force on 29 June 2026.

In R v Ryan [2026] EWCR 9, HHJ Rudolf KC granted part of a prosecution application under s 22 to reconsider the available amount. The defendant was convicted of fraudulent trading in 2021 after selling worthless carbon credits to investors. A 2022 confiscation order found benefit of £808,223.47 but an available amount of only £29,199.98, which was paid and distributed among 34 victims. Their losses totalled £254,737.30, leaving about £220,000 unrecovered.

A restraint order followed in February 2026. The prosecution sought £22,227.49 held in a savings account. An application concerning the defendant's interest in the family home was deferred by agreement pending family proceedings.

The judge described a three stage process. The application must be properly brought and supported by material. The defendant then bears the burden, on the balance of probabilities, of showing that identified sums are unavailable, following R v Flaherty and R v Wood. Finally, the court decides what increase is "just", an evaluative and multifactorial exercise.

The principal objective in s 5A(2) is the starting point, and the power to make a compensation direction under s 22A carries, in the judge's judgement, particular weight over and above it. In many cases the two will be determinative in favour of an order, although he stressed that each case turns on its own facts and that comparisons with other decisions are of limited use unless a point of principle emerges.

The funds were legitimately earned, and the financial investigator disavowed any suggestion otherwise. Because the case was not one of windfall, the judge applied the particularly anxious scrutiny called for by R v John. He found the defendant had been rehabilitated. He was working as a self-employed tradesman, using credit cards as a working overdraft, with tax on profits still to be paid and relatives having lent money to cover minimum repayments. The passage of some four and a half years did not assist him, there being no unusual delay. Rehabilitation, the judge said, cedes to the principal objective but still informs what is just.

The defendant was allowed to retain £7,228, representing minimum credit card repayments from March to June 2026, reflecting the reasoning behind an earlier variation of the restraint order. The available amount rose by £14,999.47, with a supplemental compensation direction for the sum to be shared equally among the 34 victims. Three months were allowed to pay.

The six month default term was unchanged. Section 39 permits variation only where the maximum default period under s 35(2A) changes, and the increased order remained within the same bracket, between £10,000 and £500,000. The judge said he would not have varied the term in any event, as the money is restrained.

In a postscript, the judge noted that s 22 applications are not limited by time or number, with more than £200,000 still owed. He encouraged voluntary repayment through agreed s 22 orders, in the spirit of early resolution of confiscation, while making clear that such arrangements would not displace applications considered on their merits. The restraint order will be discharged once the confiscation order is satisfied.

Tom Nicholson appeared for the prosecution, instructed by the Crown Prosecution Service. Emily Jarron represented the defendant, instructed by Janes Solicitors.