A Seismic Shift in Confiscation Law

At last there may be some light at the end of the tunnel for anyone facing confiscation proceedings.

The good news is that in an important recent decision the Court of Appeal said that there has been a “seismic shift” in confiscation law recently.

This follows the case of Waya, which became law in December 2012. Waya requires the Crown Court in every case to consider if a confiscation order is proportionate (or fair) applying the European Convention of Human Rights.

Defence lawyers should now be considering Waya in every POCA confiscation case.

The bad news is that the Appeal Court has also said that this fairness test does not apply retrospectively to cases heard before Waya.

Furthermore, Waya does not offer defendants an escape route from POCA. If an order is not “unfair” and does not breach the ECHR, Judges must follow the legislation.

Nevertheless, it is hoped that Waya will mitigate some of the manifestly unjust results POCA often produces.

Whether it succeeds in this depends on how the courts apply the fairness test.

Until now we have had little guidance on that from the Appeal courts. But some recent decisions, particularly the recent cases of Harvey and Sale, have thrown up some useful pointers. They are examined below.

Partial Restoration

Harvey 2013 EWCA Crim 1104 is an important recent decision not just because the Court of Appeal spoke of a “seismic shift” but as it also reviewed older cases to see if they were still good law following Waya.

One particularly controversial area it touched upon was “partial restoration” cases. Offenders who repay part of the loss incurred to their victim are strictly speaking not entitled to have this deducted from their confiscation orders. Only if full payment is made will this count.

In Harvey, the offender had repaid 81% of the loss to his victim. These payments were disregarded when calculating what he should pay under the order.

But the Court said that the decision was “close to the line”, opening the door for arguments that partial restoration payments should be deducted from a confiscation order where, for example, an offender had repaid most of the loss to his victim.

Business Turnover

R v Del Basso and Goodwin [2010] EWCA Crim 1119 is a notorious case that was also reviewed by the Judges in Harvey.

The defendants operated an illegal car park. They pleaded guilty to breaching planning regulations.

A confiscation order was made that required them to pay all the money (i.e. entire turnover, not profit) they had received from their business. No deduction was made for any business expenses they had incurred.

Applying Waya and the fairness test, the Court also held this decision was “close to the line” and the order made was “excessively harsh.”

If heard today, it is likely the order would have been calculated differently.

Identifying the “Real Benefit”

A sale is another case where the principle that an offender’s benefit is his turnover from an illegal business was challenged. The MD of a small engineering company obtained contracts to the value of £1.9m by bribing a Network Rail Manager.

The court made a confiscation order for £1.9m or the total value of the contracts. On appeal, the order was held to be unfair.

A new benefit figure was calculated based on the gross profit made by the firm, which was around £197,000. Prosecutors were urged in future to identify the “real benefit or pecuniary advantage derived by the wrongdoer.

The original article can be found at www.confiscationorder.com