The following article was published on LexisPSL on 10 April 2019. You can read the article on the link above.
Corporate Crime analysis: David McNeill, barrister at 5SAH, discusses the practical implications of the decision in R v S, in which, the Court of Appeal considered an appeal in respect of a successful application under section 22 of the Proceeds of Crime Act 2002 (POCA 2002) and acknowledged the ability of the court to reflect assistance given by offenders to the police in the revised confiscation order amount.
R v S  EWCA Crim 569,  All ER (D) 44 (Apr)
What are the practical implications of this decision?
The particular circumstances of this case, specifically the assistance to police point, are unlikely to recur often. However, this is the first case in which the Court of Appeal has approved a percentage reduction in an confiscation order which has been revisited under POCA 2002, s 22. All previous reported cases have either approved an increase in the confiscation order to capture all of the newly identified available assets (see, for example, In re Peacock  UKSC 5,  2 All ER 257 or Leon John  EWCA Crim 1240), or approved a decision by the Crown Court to make no order at all (see further R v Mundy (Ian James)  EWCA 105 (Crim)).
This authority therefore opens the door to defence submissions that Crown Court judges should reduce the sums payable on confiscation orders pursuant to applications under POCA 2002, s 22 (section 22 applications) to take account of particular factors in each case.
The case also illustrates the wide discretion which judges have on section 22 applications, in contrast to the strict and inflexible mandatory rules which must be followed when confiscation orders are first made. This discretion also means that the Court of Appeal will be very reluctant to interfere with decisions made by Crown Court judges who will have seen all the relevant documents and heard witnesses giving evidence.
What was the background?
This case was an appeal from a Crown Court decision to reconsider a confiscation order under POCA 2002, s 22. The original confiscation order had been imposed on the defendant in 2007, more than 11 years previously, after he had been imprisoned for four years and six months. The benefit figure was £189,621.36—but he had only been required to pay £18,050 (later reduced to £8550). At that time those were his only identified assets.
After his release from prison, the defendant had started a successful business and eventually in 2014 he purchased a property. The Crown Prosecution Service became aware of his new wealth and started proceedings under POCA 2002, s 22. The Crown Court decided that the defendant’s newly acquired assets exceeded the outstanding £181,071.36 benefit figure. However, it took an unusual course because of the unusual facts of the case. It decided to reduce the total sum payable under the reconsidered order by 40% for two reasons. These were:
- the period of more than 11 years that had passed since the original order
- the fact that the defendant had, in the interim period, given substantial assistance to the police and been paid £27,000 for the assistance, which he had used as seed money for his business
The defendant appealed, arguing that the revised order should not have been made in the first place, in light of the risks the defendant had taken to help the police and the fact that his newly earned money ultimately derived from money paid by the police. Alternatively, he argued that the discount ought to have in the region of 75-80%, by analogy with authorities like R v P; R v Blackburn  EWCA Crim 2290,  2 All ER 684.
What did the Court of Appeal decide?
At paragraphs –, the Court of Appeal gave six points for future guidance:
first, the Crown Court has broad discretion under POCA 2002, s 22 to make no order at all, or such order it ‘believes to be just’
second, although it was a novel point, there was no reason in principle why a section 22 application should not take into account assistance given to the police where the facts justify it. However, Crown Courts should bear in mind that a reduction in the amount ordered will have the effect of allowing the offender to benefit from crime
third, the Court of Appeal considered the existing practice of taking into account assistance to the police for the purposes of sentence, whether the assistance was given under the statutory scheme of the Serious and Organised Crime and Police Act 2005 or by the old informal system of ‘texts’
fourth, the extent of the discount to sentence could not be reduced to hard and fast rules. It is inevitably fact specific
fifth, the court should:
‘form a view as to the quality and quantity of the material provided by a defendant...Particular
value will be attached to those cases where a defendant provides evidence in the form of a witness statement, or is prepared to give evidence at a subsequent trial, and does so, with added force where the information either produces convictions for the most serious offences, including terrorism and murder, or prevents them, or which leads to disruption to or indeed the break-up of major criminal gangs’
the court should also consider the risks defendants take, including the serious potential consequences to them and their families
sixth, the court may also take into account the terms on which the defendant gave assistance, including whether he was paid a reward, and if so, how much
On the facts of the case, the Court of Appeal found that the Crown Court had carefully and properly considered the facts and made an appropriate order. The appeal was dismissed.
Interviewed by Varsha Patel.
David is a barrister with a strong practice in fraud and serious and organised crime cases. David is ranked in Chambers and Partners as a Band 4 leader in the field of financial crime. David has built up a wide experience prosecuting and defending difficult, complex, multi-handed cases, both alone and as junior counsel. He has particular knowledge of tax, VAT and Excise, drugs, money-laundering and organised crime cases and has been instructed on a number of cases with a significant international dimension.