Confiscation: a serious risk of injustice

In confiscation proceedings the court must not make a criminal lifestyle assumption in relation to particular property or expenditure if that creates a serious risk of injustice, see s10(6)(b) PoCA 2002.  Similar provisions apply to earlier confiscation legislation in England and Wales employing statutory assumptions for the purpose of determining a defendant’s benefit.  But what does this mean in practice?

A serious risk of injustice

The legislation expressly refers to a “serious risk of injustice”.  Does that mean the risk of a serious injustice?

In the Court of Appeal judgment in the case of R v Benjafield [2000] EWCA Crim 86 it was held, at paragraph [41.4]: “In particular, while a defendant is required to show that an assumption in his case in incorrect, if he fails to do this, the court must still not apply an assumption where there would be a “serious risk of injustice in the defendant’s case if the assumption were to be made”.  As to the weight that has to be given to the word “serious”, any real as opposed to a fanciful risk of injustice can be appropriately described as serious.  The court, at the end of the confiscation process, has therefore a responsibility not to make a confiscation which could create injustice”.

So it appears almost as if the word “serious” could be omitted.

But in my experience convicted defendants who have been made subject to confiscation orders under the ‘criminal lifestyle’ provisions often leave court feeling that they have suffered a serious injustice.

Indeed more recently the Court of Appeal in the case of Shabir v R [2008] EWCA Crim 1809 said at paragraph [27]: “If it is a case in which the criminal lifestyle provisions of the Act can legitimately be applied, and with them the several section 10 assumptions as to the source of assets, it may well be perfectly proper for a confiscation order to be massively greater than the gain from the offences of which the defendant has been convicted”.

Many defendants might regard that as a description of precisely the serious injustice which they have suffered.

A general discretion to avoid unfairness?

One might think that s10(6)(b) Proceeds of Crime Act 2002 offers Crown Court judges a general discretion to avoid excessive harshness or unfairness towards defendants in confiscation proceedings, but courts have held that it does not operate in that way.

It appears that a judge is permitted to ‘stand back and determine whether there is or might be a risk of serious or real injustice’ (as it was put in Lunnon v R [2004] EWCA Crim 1125 at paragraph [11]) but in this context the courts have had in mind possibilities such as “a defendant suffering from some mental infirmity” (alluded to in R v Briggs-Price [2009] UKHL 19 at paragraph [104]) or the position of an unrepresented defendant putting his case in person (see WB v R [2006] EWCA Crim 3062 at paragraph [135]).  The position in relation to that rather restricted application of s10(6)(b) may have been changed somewhat by the Supreme Court decision in R v Waya [2012] UKSC 51, which is discussed below.

But the courts have expressly said that the fact that a confiscation order will cause hardship to the defendant is not to be regarded as a factor giving rise to a serious risk of injustice.  Consideration of a possible serious risk of injustice is not a discretionary exercise by the judge to determine whether or not it is fair to make an order against a particular defendant, see R v Jones [2006] EWCA Crim 2061 at paragraph [14].

The courts have considered the serious risk of injustice in the context, as the statute suggests, of whether or not the assumption should be made in relation to particular items of property or expenditure.

Rebutting the criminal lifestyle assumptions

But, once the courts have concluded there would be no serious risk of injustice in making the assumption, the courts have not considered that the placing of the burden of rebutting the assumption (on the balance of probabilities) on the defendant – rather than placing the burden on the prosecution to provide evidence of further criminal conduct – gives rise to a serious risk of injustice.  In effect the Crown Courts are not permitted to consider whether that may, of itself, give rise to a serious risk of injustice because the placing of that burden on the defendant is an integral feature of the legislation and because courts (both at national and European level) have consistently held that placing that burden on the defendant is proper and does not breach the defendant’s human rights.

So, for example, a defendant who has not kept records of his financial affairs, and in consequence cannot produce the clear and cogent evidence which the court requires in order to rebut the statutory assumptions, will not be saved from a substantial confiscation order on the basis that there would be a serious risk of injustice if the assumptions were applied in his case, see R v Jones [2006] EWCA Crim 933 at paragraph [20].

However where there is sufficient evidence to rebut the statutory assumption in relation to property or expenditure, but the extent to which the assumption is rebutted by that evidence is uncertain, the court may make a broad brush reduction in the amount of the assumed benefit to eliminate any perceived risk of injustice – as was done in the case of R v Deprince [2004] EWCA Crim 524 at paragraph [21].

Double counting of benefit

More straightforwardly, the provision also allows the court to avoid the injustice which could otherwise occur where the same property falls to be considered as assumed benefit more than once as a consequence of the operation of the statutory assumptions.  So, for example, where an item of property is both transferred to the defendant after the relevant day and held by him after the date of his conviction that property should not be counted twice for benefit purposes.

But even in relation to alleged double counting, sometimes called double accounting, it is necessary for there to be adequate evidence before the court to rebut the statutory assumptions or show that there is a serious risk of injustice.  In the case of Priestley v R [2004] EWCA Crim 2237 the defendant had been convicted of offences concerning the sale of counterfeit perfume, champagne and clothing.  In the confiscation hearing Mr Priestley had not given any evidence himself nor called any witnesses.  The judge found his benefit by calculating the estimated proceeds from the sale of the perfume (based on the number of perfume bottles that had apparently been used and an estimated average sale price per bottle), and adding to that figure the amount of monies deposited in the defendant’s bank account and the estimated expenditure on production of the perfume since the relevant day, together with the amount of cash in the defendant’s possession on the day of his arrest.  On appeal it was submitted that this involved double accounting since the bank deposits, the expenditure and the cash in hand would all have represented monies generated from the sale proceeds of the perfume (which had already been taken into account).  The Court of Appeal dismissed the appeal holding that the judge had “no secure evidential basis” to conclude that there was a serious risk of injustice in applying the statutory assumptions in full.

The decision in R v Waya

The Supreme Court in the case of R v Waya [2012] UKSC 51 has made it clear that the courts should not make confiscation orders which are disproportionate to the objective of the confiscation legislation.  Where an order calculated in accordance with the provisions of PoCA 2002 would be disproportionate the judge should reduce the amount of the order so that it will not infringe the defendant’s human rights, in particular with respect to Article 1 of the First Protocol of the European Convention on Human Rights (A1P1).

But the Supreme Court indicated that ordinarily the operation of s10(6)(b) should avoid the making of an order in a ‘criminal lifestyle’ case which would infringe the defendant’s A1P1 rights.  It remains to be seen whether these comments in Waya will breathe new life into the s10(6)(b) provision, although clearly the Supreme Court did not intend by its judgment in Waya to create a wide-ranging general discretion for Crown Court judges in ‘criminal lifestyle’ confiscation cases.

At the end of the day criminal lifestyle confiscation remains a potentially Draconian deterrent penalty employed by the courts as a part of the sentencing process.

David

Note: This article has been updated to reflect the decision of the Supreme Court in R v Waya.