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The rise of Section 22 POCA 2002 – What you need to know.

Introduction

1. Section 22 of the Proceeds of Crime Act allows the prosecution to ask the court to reconsider the available amount where a confiscation order has previously been made and the available amount was lower than the benefit amount. This section has been increasingly used in the last year by various police forces in an effort to enforce a larger part of their confiscation orders. In an environment of severely tightened belts, s.22 can be seen by some in law enforcement as a good way to increase funding for their unit. It is not surprising given the reductions in both charging decisions and prosecutions that there are less POCA cases now before the courts which means that there are less orders now being made and enforced.

2. In some areas such as Yorkshire and Hampshire there are specialist teams looking for appropriate cases in which section 22 applications can be made. We have seen a marked increase in London too in which “old” orders, long since forgotten about are now being re visited with an initial restraint order being obtained , ex parte, and thereafter the Authorities in many cases offering an easy way out by payment of the balance.

3. In the cases coming into our respective practises most seem to fall within the category that an asset which, in some cases, was realised at the time of the original order has since then risen in value. In many cases, defendants never appreciated that the shortfall between the Benefit and Available figures was ALWAYS open to variation without limit of time.

4. Below the relevant law is set out and then the key points to consider in section 22 cases. There are also a couple of illustrations of where it can be argued that the ‘Just’ test can be applied. We also set out possible arguments that could be deployed in front of the ECHR

Law

5. A s.22 application can be made if a confiscation order has been made and the benefit figure was higher than the available amount. This of course in practise captures the vast amount of cases before the Courts at the time of a Confiscation order being made. The applicant for a Section 22 variation can either be the prosecutor or the receiver.

6. Under these provisions the court can order that the available amount is increased, up until the amount of the benefit, if it is just to do so under s.22(4). The total amount paid cannot be more than the original benefit.

7. In deciding what is just the court must consider any fine which was imposed, whether there is an appeal against the order, and whether any other orders have been made.

8. The leading case on this is R v Padda [2014] 2 Cr App R (S) 22. In that matter it was found by the Court of Appeal to be just to increase the available amount in a case where the defendant has started a business after leaving prison, and that business had flourished. The application was made six years after the original order was made.

9. It is clear from the Judgment that factors to be considered when looking at whether it is just are; the time between the application and the order being made; the source of the money; the amount of money; and the affect of making such an order.

Key Points

10. Though in all cases the courts will have to consider if section 22 is triggered the key point will almost certainly be if making an order is indeed just. In our experience, this is not a perceptive test. A key factor will be the amount of money being applied for and its source. In a recent case Barnaby had, he represented a plumber who had saved £4000 over a period of 18 months so he could take his family on a holiday. It was clear he had worked 80 hour weeks to do this and that making an order would have an affect on his whole family. The court found that it would not be just to make the order. In one in which we are both acting, the equity in the house was determined at the point of the Confiscation Order, and paid in full by 2010. Some 9 years later the Crown are seeking to increase the sum, as the equity in the property has risen over time. We are opposing this one and will update as this may arguably be a case to take further.

11. As evidenced in the last example, a factor will be the period of time between the making of the confiscation order and the s.22 application. As has been written in other articles, as orders get older it will be harder to enforce them or to apply for a section 22 variation. In our view 10 years is the time period after which it will be worth evoking the time restraint principle under the argument of fairness. But as yet this is new territory. Given that the 6 year rule applies for redetermination of Benefit it could be argued that 6 years ought to be the bench mark for Section 22.

12. In our view section 22 cases could also be taken to the ECHR, on the basis that they interfered with family life and are arbitrary. This will have to be before we leave the EU. But in the right case, where the interference with family life can be seen as arbitrary, it might be a rewarding course of action. As Barnaby has written in other articles, POCA 2002 is ripe for challenging in the ECHR in the right cases and the opportunity should net be squandered.

Conclusion

13. The use of section 22 is only going to increase. Prosecuting agencies see it as a way of maximising revenue as well as maximising the recovery of the defendant’s criminal benefit. This is motivated by the austerity environment, the scrutiny of varies bodies on the need to enforce confiscation orders properly and the need for bodies to self fund their units from the money they get from Asset Recovery Insentivitsation Scheme.

14. This environment means that the case law in this area will rapidly expand. In our view the definition of just, is open to definition and guidance, on top of what has already been given in padda. Only time will tell.

 

5 April 2019

Barnaby Hone
Drystone Chambers

Keith Wood
Lewis Nedas Law

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