
CHAPTER FIVE – THE FUNDAMENTALS OF CONFISCATION
This chapter provides a brief outline of the fundamentals of confiscation.
The eight questions to be addressed
In essence the court, before finalising a confiscation order against a defendant, has to address and resolve eight questions:
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Does the court have power to make a confiscation order?
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Does the defendant have a criminal lifestyle?
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What is the amount of the defendant’s benefit?
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How much of the defendant’s benefit was obtained jointly?
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What is the defendant’s available amount?
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What amount should the defendant be required to pay?
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How much time should the defendant be allowed to make payment?
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How long should the default sentence be?
Does the court have power to make a confiscation order?
All confiscation orders are made in the crown court1. The court will have the power (and in most cases is obliged) to commence confiscation proceedings if the prosecutor asks the court to do so, or the court believes it is appropriate to do so2, and the defendant has been either:
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Convicted of an offence in the current proceedings in the crown court; or
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Committed for sentence in the crown court in respect of an offence under any of the provisions of sections 14 to 20 of the sentencing code; or
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Committed to the crown court under s70 for a confiscation order to be considered3.
In practice it is very rare for the court to instigate confiscation proceedings of its own volition. Confiscation proceedings are normally triggered by a request from the prosecutor.
The court may make a confiscation order following conviction, immediately before sentencing the defendant. Typically, however, the making of the confiscation order is postponed. Such a postponement must occur before sentencing and the court should (where no exceptional circumstances are found) commence the confiscation process (for example, by setting a timetable for the submission of any necessary statements under sections 16 to 18A and a deadline for the confiscation hearing) within 2 years of the date of conviction4.
Does the defendant have a criminal lifestyle?
The answer to this question depends entirely upon the defendant’s convictions – it has nothing to do with his actual lifestyle.
However, in order to fully resolve this question, the court may first have to determine whether the defendant has obtained aggregate benefit of at least £5,000 from offences for which he has been convicted together with any offences which are being, or have been, taken into consideration in sentencing him.
Further details can be found in chapter 9 dealing with criminal lifestyle.
What is the amount of the defendant’s benefit?
Where the court finds that the defendant does not have a criminal lifestyle, the amount of his benefit will be limited to the benefit of his particular criminal conduct. His particular criminal conduct is the conduct of which he has been convicted in the current proceedings and any offences being taken into consideration in sentencing in these proceedings5.
Where the court finds that the defendant does have a criminal lifestyle, the amount of his benefit will be the actual and assumed benefit of his general criminal conduct. His general criminal conduct is all his criminal conduct (whenever this occurred) and includes any criminal conduct of his of which he has not been convicted6.
The defendant’s benefit of his general criminal conduct may therefore have three components:
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The benefit of his particular criminal conduct;
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The assumed benefit arising under the statutory assumptions7; and
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Any other benefit arising from criminal conduct of his which is not being dealt with in sentencing in the current proceedings (including benefit arising in relation to criminal conduct of which he has previously been convicted, benefit of criminal conduct of which he has neither been convicted nor acquitted, and benefit which has been found by the court in previous confiscation proceedings against him – but subject to the deduction of any amount previously ordered to be paid by him under a previous confiscation order)8.
In practice prosecutors, and hence courts, typically ignore or overlook the third component.
The burden of proof falls generally upon the prosecution to satisfy the court, on a balance of probabilities9, of the defendant’s benefit. However, in relation to the statutory assumptions, although the burden falls initially on the prosecution, the burden then shifts to the defendant to show that an assumption is incorrect or that there would be a serious risk of injustice if an assumption were made10.
Further details can be found in chapter 10 dealing with the statutory assumptions.
How much of the defendant’s benefit was obtained jointly?
Where the court finds that the defendant obtained benefit jointly with one or more other persons, the whole of the benefit jointly obtained is treated as benefit of the defendant.
But the confiscation order should provide that it is not to be enforced to the extent that a sum has been recovered by way of satisfaction of a confiscation order made against another person in relation to the same jointly obtained benefit11.
It is therefore necessary for the court to identify which benefit was jointly obtained and, if possible, with whom. Practitioners need to be mindful that they may need to remind the court of this fact.
What is the defendant’s available amount?
It is important to keep in mind that the exercise of determining the defendant’s available amount is entirely separate from the consideration of his benefit.
The defendant’s available amount is the aggregate of the total value of his interests in assets held by him (after taking into account any liabilities secured on those assets, such as outstanding mortgages) and the total value of any tainted gifts made by him – but subject to the deduction of obligations which have priority (as defined)12.
Obligations having priority are very limited and, apart from outstanding fines, sums outstanding in respect of previous confiscation orders, and certain tax liabilities, are rarely encountered in practice.
When a confiscation order is being made the burden of proof falls generally upon the defendant to satisfy the court, on a balance of probabilities13, as to his available amount14.
What amount should the defendant be required to pay?
The defendant should be required to pay whichever is the lower of the amount of his benefit and his available amount, this is known as the recoverable amount15.
However, if the court finds that it would be disproportionate to require the defendant to pay that amount, it should require him to pay the largest amount, not exceeding the recoverable amount, which would not be disproportionate16.
A confiscation order simply requires the defendant to pay a specified sum or sums of money by a specified date or dates. The confiscation order does not concern itself with how the defendant achieves that. So it does not, for example, require the defendant to sell any specified assets to enable him to make payment.
The court has additional powers which it may exercise with a view to ensuring payment is made17 but these are not a necessary constituent of a confiscation order.
How much time should the defendant be allowed to make payment?
Unless the court allows further time to pay, the full amount required to be paid under a confiscation order must be paid on the day on which the order is made18.
However, the court may allow a period, initially of no more than 3 months, for payment19. The court can set different dates for different parts of the total amount required to be paid.
The court may make an extension to the period initially allowed.
However, payment of the entire amount must be required by no later than 6 months after the day on which the confiscation order was made20.
Where payment is made late, interest must be added to the amount outstanding under the confiscation order21. This interest is currently charged at a rate of 8% per annum.
It will be generally beneficial for a defendant to obtain an extension to the period initially allowed (and in many cases the court will in practice agree to this without difficulty) since – even where payment cannot be made within the 6 months – the extension will have the effect of reducing the interest arising on late payment. An application for an extension must be made before the existing deadline has passed22.
How long should the default sentence be?
If the defendant fails to pay the full amount required to be paid, he may be committed to prison. A maximum sentence in default will be specified in the confiscation order.
The default sentence will be fixed by reference, amongst other factors, to the amount required to be paid under the confiscation order.
A table of maximum default sentences is set out in s35(2A).
The default sentence will be consecutive to any term of imprisonment for which the defendant has been sentenced for the offence.
See chapter 14 on the default sentence for further details.
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1 A proposal to give Magistrates’ Courts power to make confiscation orders has never been implemented.
2 s6(3)
3 s6(2)
4 s14
5 s76(3)
6 s76(2)
7 See chapter 10 on the statutory assumptions
8 s8
9 s6(7)
10 s10(6)
11 R v Ahmad [2014] UKSC 36
12 s9
13 s6(7)
14 s7(2)
15 s7 & s6(5)
16 s6(5) and R v Waya [2012] UKSC 51
17 For example, compliance orders under s13A
18 s11(1)
19 s11(2) & (3)
20 s11(4) & (5)
21 s12
22 s11(4)