The will to find a way: POCA and criminal confiscation

Nicola Finnerty, Gemma Tombs and Phil Taylor examine Law Commission reform recommendations on proceeds of crime confiscation

On 9 November 2022, following a lengthy period of research and consultation, the Law Commission (the Commission) published its final report and recommendations for the reform of Part 2 of the Proceeds of Crime Act 2002: the post-conviction confiscation regime (the report).

The issue

As acknowledged in the report, the UK’s confiscation regime is considered to be inefficient, complex and ineffective. As at 31 March 2021, the estimated value of outstanding confiscation orders stood at £2.35bn.

The Commission’s recommendations seek to pave the way for a long overdue reform of this fundamental part of the criminal justice process. The report begins by underlining the importance of clearly drawing the boundaries and objectives of the regime, proposing the new statutory objective of “depriving defendants of their benefit from criminal conduct, within the limits of their means.”

The recommendations

The many recommendations which follow in the report are, without exception, unobjectionable – and the Commission should be commended for its thorough review of the regime, seeking to:

• Speed-up confiscation proceedings by establishing strict timetables for hearings;
• Give courts the power to impose so-called contingent enforcement orders alongside confiscation orders;
• Strengthen the restraint order framework and codify the risk of dissipation test;
• Strengthen law enforcement agencies’ responses;
• Update the provisions that factor in a defendant’s criminal lifestyle when assessing their benefit from crime;
• Give greater consideration to the defendant’s ability to pay an order; and
• Create more flexible tools for judges when drawing up orders.

Analysis

The first proposal to accelerate confiscation proceedings and avoid ‘drift’ is a noble one. The Commission recommends a timetable for confiscation proceedings must be raised as a matter before the court by the completion of the sentence hearing. This is a significant improvement on the Commission’s initial proposal that confiscation proceedings should be started within six months of sentencing (other than in exceptional circumstances).

As any practitioner involved in confiscation proceedings will attest, it can be an uphill struggle to keep momentum and focus on this latter part of a criminal prosecution. This recommendation (along with the proposal that timetables for service of statements be set out in the Criminal Procedure Rules) will stop confiscation being sidelined and lessen the impact of long, drawn out, proceedings on victims, as well as defendants and other stakeholders.

Also to be applauded is the recommendation to formalise the negotiations between the prosecution and defence which normally take place in the wings and make them centre stage, by way of Early Resolution of Confiscation (EROC) meetings and hearings. In a similar vein to the relatively new process of pre-charge engagement, the EROC process should reduce costs and the scope for misunderstanding, make agreement between the parties more likely and avoid a contested confiscation hearing.

Progressive proposals

These recommendations are illustrative of the Commission’s overarching aim to simplify and clarify what exists in practice rather than overhauling the entire regime. So too are the recommendations that case law on the vexed issues of ‘benefit’ and ‘tainted gifts’ be incorporated into guidance in the Criminal Procedure Rules and Practice Directions and in POCA 2002 in order to be clear and accessible.

Worthy and carefully considered as the recommendations in the report are, the likelihood of them becoming reality any time soon feels remote. The recent Economic Crime (Transparency and Enforcement) Act 2022 and the awaited Economic Crime and Corporate Transparency Bill show the government is currently focussed on preventing the proceeds of crime being brought into the UK rather than addressing issues with the post-conviction regime of depriving defendants of their proceeds of crime.

The Commission’s aspirations also require increased funding and resourcing of the courts and the law enforcement agencies at a time of economic uncertainty and competing interests.

Many will also query whether the scale and cost of the measures required are worthwhile - the Commission expects the reforms, if enacted, to result in an increased annual recovered debt of between £2.94m and £14.7m (a 2 per cent to 10 per cent uplift on current figures) but this barely scratches the surface of the outstanding debt of £2.35bn.

Conclusion

The Commission expects a draft Bill to be tabled sometime in 2023. Although reforms are long overdue, a confiscation regime is only as good as the agencies and individuals enforcing it – and the ability to enforce effectively does not come cheap. It can only be hoped that this point will be given due consideration in the Bill.

Kingsley Napley contributed to the consultation and their views featured in the report. The Law Commission’s project page can be found here, and includes the full final report, a report summary and an impact assessment.

Nicola Finnerty is a partner, Gemma Tombs is Legal Director and  Phil Taylor is professional support lawyer.  All are with the criminal litigation team at Kingsley Napley LLP: kingsleynapley.co.uk