Corporate Crime analysis, written by Barnaby Hone for Lexis Nexis PSL: Collins v Director of Public Prosecutions [2021] EWHC 634 (Admin).

In an appeal by way of case stated, which arose out of confiscation orders made by His Honour Judge Kinch QC against a number of defendants who were co-conspirators, the High Court was asked if it was right that the time served by the appellant’s co-defendants of their default sentences should be deducted from the sentence he should serve for nonpayment of his confiscation order or if he must serve his default sentence as a whole. 

What are the practical implications of this case?

This is a case which considers the implications of the decision of the Supreme Court in R v Ahmad and Fields [2014] UKSC 36, clarifying the guidance in R v May [2008] UKHL 28, that a person’s jointly responsible co-defendants should each have the whole amount of the benefit from their criminal conduct reflected in their confiscation orders. The Supreme Court in Ahmad importantly added the codicil that it does not follow that the confiscation order can be enforced to the same extent against each co-conspirator who jointly obtained the benefit because this would risk double recovery. Therefore, any payment of an amount under the confiscation order by one defendant in a joint enterprise in respect of jointly received benefit should reduce or extinguish the amount payable by the other defendant, and that the order should contain a proviso to that effect. 

This left a number of questions relating to the mechanics of enforcement. For example, did it mean that default sentences included as part of the confiscation orders made against co-conspirators in joint benefit cases were likewise severable or were they made against the defendants individually? Should the money paid by one co-defendant take time away from another co-defendant’s default sentence? Also, if a person’s co-defendants did make repayments towards the satisfaction of their orders, was it to be applied to pay off their general or particular criminal conduct first? Finally, how should the court consider what assets are available to all co-defendants when considering the appointment of an enforcement receiver in a case such as this? 

This judgment gives a resounding answer to the first of these questions although the full ramifications of Ahmad are yet to be fully explored by the courts.

What was the background?

This was an appeal by way of case stated from a decision District Judge Blake made on the 1 August 2019 at Westminster Magistrates’ Court to enforce the appellant’s confiscation order by issuing a warrant of commitment for him to serve his default sentence. The original confiscation order had been made by HHJ Kinch QC sitting at Woolwich Crown Court. In line with Ahmad, the judge had included a proviso in the confiscation orders against all members of the conspiracy, that the Crown should not be permitted to recover the same money twice. After only a small proportion of the appellant’s confiscation order had been paid by the expiry of the time to pay, the Crown sought to enforce the order and applied for the default sentence to be imposed in the magistrates’ court.

District Judge Blake found that the defendant had failed to pay the £7,502,519.68 and ordered that he serve a period of 2309 days imprisonment.

The confiscation order had followed the conviction of a number of people, including the appellant, of conspiracy to burgle the Hatton Garden Safe Deposit Company Ltd. On 30 January 2018, following contested confiscation proceedings, HHJ Kinch QC found that the benefit from the crime was just under £14m which was obtained jointly by four relevant defendants who had been convicted at that stage. A significant amount of the stolen property was recovered which reduced the amount of the confiscation orders. HHJ Kinch QC found that the defendants had all failed to discharge the persuasive burden on them to establish that the available amount of unrecovered stolen property was less than the £5.75m contended by the prosecution by way of hidden assets. The judge therefore held each of the defendants liable for this sum and, taking into account the other realisable assets of the appellant, he added a further £2m to the appellant’s order and set a default sentence of seven years.

The decision under appeal was that District Judge Blake decided that the default sentence should be served in whole by the defendant. In the stated case, District Judge Blake asked if he was right to decline to endorse the appellant’s warrant of commitment to the effect that any term of imprisonment served by a person in default of payment of a confiscation order made in relation to the same joint benefit should reduce the term of imprisonment to be served by the appellant for his default of payment.

What did the court decide?

Does proportionality require the prison sentence to be, effectively, shared? The High Court’s answer was, emphatically, no.

In its judgment (delivered by Lord Justice Edis), the court was skeptical of the use of the phrase ‘joint and several liability’ in this context saying that it adds nothing useful to the analysis, particularly where hidden assets are concerned, and may serve to confuse. It also noted that the Supreme Court did not itself use the phrase to describe the effect of what it determined was the correct course in Ahmad. Therefore, it seems that the use of the language of joint and several liability of co-accused in confiscation proceedings will become less common place.

The court went on to hold that, quite simply, reducing a default sentence to reflect someone else’s detention would undermine the statutory purpose of the regime. When the court making the order fixes the default term it has decided that this is the term necessary to persuade each defendant to pay their order, or to secure its payment, by all possible means. Each term works because, if it is imposed, each defendant will themselves have to serve it and cannot benefit from other people who have also failed to secure payment of their orders having served the sentences imposed on them.

Case details:

  • Court: Queen’s Bench Division, (Divisional Court), High Court of Justice.
  • Judge: Lord Justice Edis and Mr Justice Linden.
  • Date of judgment: 9 March 2021.

Barnaby Hone is a barrister with specialist expertise in all types of asset recovery and financial crime. He is ranked in Chambers and Partners and the Legal 500 for his knowledge within POCA, asset recovery, and forfeiture.  Barnaby writes the chapters on International Asset Recovery and Terrorism Finance for Millington and Sutherland Williams on POCA.

This analysis was first published on Lexis®PSL on 20 April 2021.