Posted: 27 / 03 / 2022

Terminology in confiscation is notorious for confusing prosecutors, lawyers and defendants by using expressions which do not mean what they say. So a person’s ‘benefit’ may not be the amount by which he has benefited from his crime, his ‘available amount’ may not be the amount he has available, and a ‘criminal lifestyle’ has nothing to do with a person’s lifestyle.

But the expression the ‘amount required to be paid’ does mean exactly what it says. It is the amount required to be paid under the confiscation order. So where is the confusion?

Paradoxically because this expression means simply what it says there is no statutory definition of the term – as a result lawyers and the authors of s16 statements may fail to identify the ‘amount required to be paid’ as an important or meaningful expression at all.

Worse, the ‘amount required to be paid’ is often equal to the ‘available amount’ – leading to prosecutors in particular using the term ‘available amount’ when they mean the ‘amount required to be paid’. That misuse of terminology can lead to misunderstanding and error.

Meaning of the available amount

The ‘available amount’ (which is defined by s9 PoCA 2002) is calculated at a specific day (the day on which the court makes the confiscation order) and is the sum of the values of  the defendant’s interests in property on that day plus the values on that day (calculated in accordance with s81) of tainted gifts made by the defendant, less the value of any obligations having priority (as defined by s9(2)).

Certain PoCA provisions require the court to prepare a new calculation of the defendant’s ‘available amount’ at another (later) date. For example s23 requires the court to prepare a new calculation of the defendant’s current ‘available amount’ and compare that to the amount currently remaining to be paid (the amount outstanding) under the confiscation order.

Meaning of the amount required to be paid

The ‘amount required to be paid’ under the confiscation order is the total amount which the defendant is required to pay under the confiscation order. Initially that will be calculated in accordance with s6(5).  It may subsequently be varied (up or down), for example under s23 or s22.

In the course of confiscation proceedings the ‘amount required to be paid’ may be equal to, more than or less than the defendant’s ‘available amount’. Some simple examples can illustrate this.

Example 1 – Angela

Angela has a benefit of £20,000 (which is an amount of money she stole from her employer by a fraudulent bank transfer). The only property she currently holds is £10,000 in her bank account. Angela has made no tainted gifts and has no obligations having priority. Her ‘available amount’ is therefore £10,000.

In Angela’s case no issues of proportionality arise.

The ‘amount required to be paid’ in confiscation will be £10,000 – which is equal to Angela’s ‘available amount’ at the time the confiscation order is made.

Example 2 – Brian

Brian has a benefit of £400,000 (following his conviction for possession of cocaine with intent to supply). The only property he currently holds is £20,000 in his bank account and a house worth £300,000 subject to an outstanding mortgage for £220,000. Brian has made no tainted gifts and has no obligations having priority. His ‘available amount’ is therefore £100,000 (the £20,000 in the bank and £80,000 equity in the house).

In Brian’s case no issues of proportionality arise.

The ‘amount required to be paid’ in confiscation will be £100,000 – which is equal to his ‘available amount’ at the time the confiscation order is made.

Brian pays £20,000 from the money in his bank account. Later he manages to sell the house, but for less than he expected. His net sales proceeds are only £50,000. Brian applies to have the confiscation order varied under s23.

The court calculates his current available amount is £50,000 (the net sales proceeds of the house). The amount remaining to be paid under the confiscation order is £80,000 (the original amount required to be paid of £100,000 less the £20,000 which Brian has already paid).

The court varies the confiscation order under s23 so that the ‘amount required to be paid’ is £70,000 (instead of £100,000). Since Brian has already paid £20,000 of this, the amount outstanding is now £50,000 which Brian can pay from the net proceeds of sale of the house.

So in this example the ‘amount required to be paid’ in confiscation is £70,000 – which is more than Brian’s ‘available amount’ at the time of £50,000.

It is important to recognise that neither at the date the confiscation order was made, nor on the date it was varied, did the court find that Brian had an ‘available amount’ of £70,000.

Example 3 – Cedric

Cedric has a benefit of £50,000 (which is the value of jewels he stole from a shop in a burglary). The only property he currently holds is £5,000 in his bank account and a house worth £200,000 subject to an outstanding mortgage for £180,000. Cedric has made no tainted gifts and has no obligations having priority. His ‘available amount’ is therefore £25,000 (the £5,000 in the bank and £20,000 equity in the house).

Since the burglary the police have recovered most of the jewels intact. The value of the jewels returned to the shop by the police is £40,000. In these circumstances it would be disproportionate to order Cedric to pay more than £10,000 (his £50,000 benefit less the £40,000 value of the jewels returned intact) in confiscation.

The ‘amount required to be paid’ in confiscation will be £10,000 – which is less than Cedric’s ‘available amount’ at the time the confiscation order is made.

 

This brief article can only provide an outline of the main issues. Lots more information is available on our website blog HERE or via our recorded webinars HERE.

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David

(Note: This article applies to confiscation proceedings under the provisions of Part 2 of the Proceeds of Crime Act 2002 in England and Wales. There are a number of additional issues which could be relevant to a defendant’s confiscation proceedings in particular cases which it is not possible to deal with in a relatively short article such as this. Appropriate professional advice should be sought in each individual case.)