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Confiscation Update: R v Waya [2012] UKSC 51 & R v Mahmood [2013] EWCA Crim 325 – by Miles Herman

The recent long awaited judgement in R v Waya will patently have far-reaching effects in future post-conviction confiscation proceedings of significance for the profession. The Supreme Court ruled that, in line with the European Convention on Human Rights, criminal courts must not make disproportionate confiscation orders.

There can be little doubt that defence practitioners will need to make frequent references to the judgement in Waya to assist in tactical approaches to confiscation proceedings from now on.

The facts of Waya are well known to many and are not repeated here. The significance of the judgement is that the Supreme Court looked at the existing legislation in light of European law and concluded that confiscation orders under POCA must be proportionate with the aims of the legislation and further POCA legislation must be compliant with European law.

How will this be played out in future cases? Well the Court stated that the usual safeguard to protect a defendant against a 'disproportionate' order would normally be the common sense approach of either the Crown not to seek one or the Court not to make one.

We as defence practitioners are quite aware there have been many orders made against defendants that have been disproportionate and, indeed, ludicrously high, resulting in prisoners serving time in default. This judgement, I believe, will lead to a greater sense of fairness when the Court considers the issue of confiscation orders post-conviction.

Furthermore, this case opens the gateway for defence practitioners to argue matters that have not previously been questioned in the courts.

There may be circumstances, even where a defendant has obtained property as a benefit from criminal conduct, when it may be argued that it would be disproportionate to make an order in the sum that would otherwise be recoverable.

So the word 'proportionate' is the new buzzword and one that will be before the courts in cases that warrant arguments to be advanced in the future.

What is for certain is that there will be cases coming before the Court of Appeal where judges will reconsider exactly what proportionality means. For now in confiscation cases where these issues may be important, the judgement should be looked at and argued by the defence practitioners in support of their client's case.

One of the first cases where the principles laid down in Waya have been referred to was in R v Mahmood. In this case, the Appellant had conspired with others to import large quantities of heroin from Afghanistan. He was sentenced on the basis that he played a vital role in the conspiracy, and the prosecution argued in confiscation proceedings that the Appellant should be treated as having joint liability and those assumptions under the criminal lifestyle provisions should be applied.

The Court found that the Appellant lacked credibility and must have hidden assets. It was ruled his benefit consisted of the value of the heroin seized; expenditure incurred during the length of the conspiracy and due consideration was given to the criminal lifestyle led by the Appellant.

The Court held the recoverable amount to be the same as the benefit as the Appellant had been unable to show that the value of his assets was less than the benefit figure.

The appeal was lodged on the basis the judge was wrong in the valuation of the benefit for heroin seized and also the expenses incurred by the co-conspirators.

In respect of the valuation of the heroin, Mahmood contended that he had not had ownership of the full value of the heroin seized and that as he did not have the leading role, therefore the confiscation order was disproportionate under the principles discussed in Waya.

The Court held on this point that with a conspiracy each member of it can be regarded as having jointly obtained the whole benefit and that each member can be required to pay its full value as had been confirmed in Waya. To this extent the appeal was unsuccessful.

As to the issue of expenditure, the Court stated the judge was wrong as joint liability and a conspiracy does not assist in identifying which member incurred what expenditure in the course of an operation.

Consequently the Court stated that the assumptions does not mean that each conspirator is treated as having incurred all of the expenditure, inferences may be drawn and in many cases it will be found that co-conspirators contribute equally to such expenses. In this case, however, there was no finding about the Appellant's expenditure and it was therefore wrong it was held to attribute the expenses to the Appellant.

In light of this judgement all criminal defence practitioners will need to consider when advising their clients not only as to the valuation of the benefit of in this case the drugs but also the expenses incurred during the conspiracy.

In Mahmood the argument as to disproportionality failed; this will be one of many cases where confiscation orders not previously contested in the Crown Court will now be contested on this point and there will be more appeals to the Court of Appeal.

As a consequence of Waya, the extent of the investigation and legal work involved in many confiscation cases can only increase.

All defendants are entitled to have all of these issues considered carefully and in detail and at Lewis Nedas Law we are well placed to do that.

We have successfully contested cases in the Crown Court and most recently in the cases of R v P Charlery. Through diligent defence work undertaken by Miles Herman and Jeremy Ornstin, the Court has been invited to make a nominal order against a defendant who was initially treated as equally benefitting from other co-conspirators in a million pound conspiracy.

For further advice and guidance please contact Miles Herman.

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City of London Fraud Arrest 7 on Pension Liberation Fraud Allegations – by Siobhain Egan

After a joint high profile campaign (including agencies such as HMRC, the Pensions Regulator, the FCA, the SFO and SOCA) seven people were arrested yesterday by City of London fraud police.

Essentially, the authorities are of the view that alleged pension liberation frauds are another manifestation of the 'boiler room fraud', and claim that since 2008 over £400 million has been defrauded.

Pension liberation schemes are not illegal per se; essentially it is the transfer of a pension scheme member's savings to an arrangement that will allow access to the funds before the age of 55 years.

The authorities are of the view that because of the dire economic climate in this country, pension scheme members are tempted to release funds, e.g. to help their offspring with deposits for homes etc.

Allegations of fraud arise when members are misled about the consequences of such a transfer, e.g. not told about fees, tax liabilities, or how the remainder of the pension funds are invested.

Often loans are raised against the pension schemes or the monies are moved to an unregulated scheme (i.e. not registered to HMRC and the Pension Regulator), often to an offshore vehicle. The liberation company often charges a fee of between 20% and 30% and HMRC will tax any sums released.

The other aspect to pension liberation is that the taxes that HMRC will apply to the released funds are anything between 55% and 70%.

Contact Jeffrey Lewis if you have any problems concerning this issue.

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The Length of my Lease is Diminishing and so is the Value of my Flat: What Should I Do?

You are not alone; there are at least 1.5 million leaseholders in the UK who are in the same position as yourself and they represent 10% of all residential owner-occupiers. This could spell real trouble, because for most of these individuals their property is their major asset.

The value of your property can fall by as much as 5% as the lease approaches 80 years or less, and drops even more if the lease is in the region of 60 years. This in turn means that it could be difficult to secure a mortgage and make the property difficult to sell. Certainly, in our experience, most lenders will not re-mortgage if the lease is less than 70 years.

You can extend the lease or buy the freehold of the property.

A standard lease extension for a flat is 90 years (see the Leasehold Reform, Housing and Urban Development Act 1993) which is added to the remaining term on the lease. This is actually a fairly straightforward process, it only becomes expensive if the lease is less than 80 years and the respective parties’ valuers have to take into account the ‘marriage value’ of the lease.

The ‘marriage value’ means the potential for increase in the value of the flat arising from the grant of the new lease. The ‘profit’ will be shared 50:50 between the landlord and the leaseholders.

Non legal costs for this rise dramatically if the term is less than 80 years. The parties’ respective valuers will rely on local knowledge and experience to assess the value of the flat as a result of the new lease.

If you hold a leasehold flat in a block or conversion, very common experiences in Central and North London, why not see if your neighbours will renew their leases at the same time (or try and acquire the freehold)? This would give you real, collective bargaining power.

Our property lawyers are here to help. They are highly skilled, talented, experienced, fully qualified solicitors who have worked in the London leasehold market for many years. They understand how stressful this whole process can be and will do everything to relieve as much of the worry from you as they can. They are cost efficient and offer attractive price plans to keep the costs of this important process down.

Contact Richard McConnell, Janak Bakrania, or Layna Thompson.

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Are You Facing a Historic Sexual Abuse Allegation?

The recent avalanche of high profile arrests and prosecutions, and the attendant publicity concerning allegations many decades old, raise a number of disturbing legal issues and problems for the accused.

The whole issue is very emotive; the view of the general public, including juries, has changed markedly and the CPS has greatly increased the number of prosecutions (including a number that would previously have been deemed as ‘weak’ allegations).

Another consequence of these prosecutions is that a civil claims industry has mushroomed with claims being made against assets/estates of the accused. So, not only has the accused to worry about defending these types of allegations but also that s/he may lose financially as well. The stakes are very high for any such individual and will often mean that careers, family life, and relationships come crashing down as a result. Sentencing policy in this field means that s/he could face lengthy prison sentences at a late age and when in declining health.

The first thing to do is to find the right firm of criminal lawyers who have a proven success record and who have successfully defended these allegations previously. You will need a team that are approachable, diligent, believe in your innocence, and are prepared to fight for you every inch of the way. Only senior, qualified lawyers have conduct of these cases in our firm - see our Historic Sex Abuse (Defence) page for more details.

We understand the difficulties presented by these cases and have an excellent record of success, using experienced barristers.

These cases can very often come down to the word solely of the complainant; corroboration is no longer necessary. So the Crown will often proceed upon a number of individual witnesses and point to similar facts as the basis of their case.

You will need lawyers who are experts in disclosure, focusing upon the veracity of the witness; who will be familiar with recovered memory syndrome, childhood amnesia syndrome, and the tainting/contamination of witness evidence. You will need lawyers who are prepared to look for defence witnesses, find alibi evidence, and documentary evidence which supports your defence. Essentially, you need lawyers who are proactive.

The defence of these cases is a delicate matter. There is unlikely to be any medical or forensic evidence supporting the complainant’s allegations. It very often depends upon whom the jury believe, and the way in which your defence is presented by your defence team is vital.

If you are facing such allegations contact Jeffrey Lewis or Tony Meisels.

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SFO: Perhaps the Phoenix Will Rise from the Ashes, After All?

A quick analysis of the SFO’s recent activities shows that the SFO director David Green does mean business and has secured additional funding in order to do so.

Finally, the SFO have lost patience with ENRC and all that has gone on with that company regarding an investigation into African bribery and corruption. This is a good example of a potential civil settlement going badly wrong and it looks likely that a criminal inquiry will now get underway since the SFO have served a s.2A notice.

The SFO also want to draw a line under the Rolls Royce corruption allegations originating in Indonesia, and are apparently considering a Civil Recovery Order. Presumably, this case would have been an ideal candidate for a Deferred Prosecution Agreement, however these will not come into effect until February 2014. They also seem to have BUMI and the alleged missing £48 million within their sights, and finally perhaps some movement on the Libor criminal inquiry. The SFO are currently advertising for a lawyer to assist with their endeavours in this regard.

It seems that the SFO have secured additional funding after having had their budget slashed in the Government’s recent austerity drive. They have increased income to a new high of £6.6 million in 2011/12 as a result of asset seizures, secured £3.5 million for the Libor criminal inquiry from the Treasury, and also ‘blockbuster’ funding for any investigation deemed to cost more than £1.5 million.

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