Confiscation under Part 2 of the Proceeds of Crime Act 2002

Current project status

  • Initiation: Could include discussing scope and terms of reference with lead Government Department
  • Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
  • Consultation: Likely to include consultation events and paper, making provisional proposals for comment
  • Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
  • Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

A reformed confiscation regime will aim to improve the process by which confiscation orders are made; ensure fairness of the confiscation regime; and optimise the enforcement of confiscation orders so they are more effective at depriving a defendant of their benefit from criminal conduct.

Download the Consultation Paper

Download the Executive Summary of the Consultation Paper

Download a Welsh version of the Executive Summary of the Consultation Paper

 

The problem

The “confiscation order” is an order made personally against a defendant to pay a sum of money equivalent to some or all of their benefit from crime, depending on the assets available to the defendant. The defendant is not obliged to realise any particular asset to satisfy the order, as long as the sum of money is paid.

A confiscation debt running into the billions of pounds has led to a perception that the current confiscation regime is ineffective. As at 31 March 2019, the value of outstanding confiscation orders was £2,065,303,000.

The perceived complexity of the legislation has also motivated a desire for change. A guide produced for judges on confiscation describes the proliferation of appellate judgments over an eleven-year period.

Our Consultation Paper considers how the existing statutory framework could be improved with the following objectives in mind:

  1. to improve the process by which confiscation orders are made;
  2. to ensure the fairness of the confiscation regime; and
  3. to optimise the enforcement of confiscation orders.

The consultation

In our consultation paper, launched on 17 September 2020, we have suggested reforms to encourage the effective use of powers to prevent assets from being dissipated before a confiscation order is made, to ensure that when confiscation orders are made they realistically reflect what a defendant gained from crime, and to improve the enforcement of confiscation orders.

Our proposals include changes that would include:

  • Introducing new, clear processes and frameworks set out in legislation, procedure rules and in guidance as to how to courts should approach confiscation. For example:
    • Setting out express statutory objectives of the confiscation regime of: depriving a criminal of their proceeds of crime; deterring and disrupting crime; and compensating victims (where such compensation is to be paid from confiscated funds).
    • Removing “punishment” from the objectives of confiscation, so that punitive sentencing and restorative confiscation are clear and distinct parts of the criminal justice process.
    • Clarifying that sentencing should take place prior to confiscation proceedings being resolved unless the court otherwise directs.
    • Making the process more efficient by establishing standard timetables for confiscation and introducing a six-month maximum period between sentencing a defendant and a confiscation order coming into effect.
  • Giving the Crown Court the discretion to impose contingent orders at the time of making the confiscation order. If a defendant then fails to pay the confiscation order, the contingent order would allow assets to be claimed in a timely way, permitting the efficient recovery of the proceeds of crime.
  • Giving the court discretion to impose financial penalties and forfeiture orders prior to confiscation proceedings being resolved. This will enable compensation to be awarded far earlier in the process than at present, benefitting victims.
  • For defendants who are sent to prison for failing to pay their confiscation order, we propose that when automatically released half way through their sentence, they should be released on licence – rather than unconditionally – so they could be returned to prison for continued refusal to pay their confiscation order.
    • This would improve the enforcement of confiscation orders.
    • In the current system, defendants are unconditionally released half way through their sentence. They are still liable to pay the confiscation order, however enforcement of the order tends to be difficult.
  • Defendants appearing before the magistrates’ court in enforcement hearings will be obligated to provide clearer and more detailed evidence of their financial position if they claim to be unable to pay their order.
  • Creating flexible tools for enforcement. For example, a judge could decide to pause or reduce the accrual of interest to incentivise continued compliance with the confiscation order.

Consultation events

We held a number of consultation events, which you can watch using the links below.

  • Consultation launch event (29 September 2020), co-hosted with POCLA, 33 Chancery Lane and Blake Morgan solicitors – available here.
  • Webinar 1, preparing for a consultation hearing and forum (8 October 2020), co-hosted with IALS – available here.
  • Webinar 3, benefit in criminal lifestyle cases (22 October 2020), co-hosted with New Park Court chambers [link available soon]
  • Webinar 4, realisable assets (29 October 2020), co-hosted with 7 Bedford Row – available here.
  • Webinar 5, enforcement (5 November 2020), co-hosted with 6KBW College Hill. [link available soon]
  • Webinar 6, other orders of the court (12 November 2020), co-hosted with 33 Chancery Lane. [link available soon]

For more information or if you have any queries, please email us at confiscation1@lawcommission.gov.uk.

The background to the project

In 2018, the Home Office commissioned a Law Commission project with the objective of reforming Part 2 of Proceeds of Crime Act 2002. Our Consultation Paper considers how the existing statutory framework could be improved with the following objectives in mind:

  1. to improve the process by which confiscation orders are made;
  2. to ensure the fairness of the confiscation regime; and
  3. to optimise the enforcement of confiscation orders.

Terms of reference

The scope of our project is set by the Terms of Reference agreed between the Law Commission and Government. The project seeks to make proposals which clarify, simplify and modernise the post-conviction confiscation regime, contained within Part 2, Proceeds of Crime Act 2002.

This review seeks to analyse and address the most pressing problems with the law on confiscation, including the irregular compensation of victims in confiscation proceedings; the frequent imposition of unrealistic confiscation orders; the ineffective incentives and sanctions of the confiscation regime; the interplay between civil and criminal investigations under POCA, the complexity of the relevant legislative provisions and related case law; the role of restraint and the insufficient enforcement powers of magistrates’ courts and Crown Courts.

This review also seeks to explore and assess a range of solutions to these problems. It considers alternatives to the current value-based regime, options for a specialist forum for confiscation proceedings, and new ways of preventing the dissipation of assets.

The proposals in this consultation paper include amendments to the current legislative regime as well as proposals for non-legislative avenues for reform.

Our full Terms of Reference are available here.

Timing and next steps

The consultation has now closed. We are currently analysing responses and preparing our final recommendations for reform. We are aiming to publish the final report later in the year.

Contact

For general enquiries, please contact us by email: confiscation1@lawcommission.gov.uk

Documents and downloads

Project details

Area of law

Criminal law

Commissioner

Professor Penney Lewis