Proceeds of Crime: Confiscation Orders, Crime Doesn’t Pay
The Scottish legal system operates with a number of core principles. One of the most important is the concept that crime should not result in financial gain. This article by our Criminal Defence Senior Associate Ross McGowan considers the principles and practicalities of Confiscation Orders in Scottish Courts.
After a person is convicted of a crime that they have financially benefitted from, the Crown can ask the Court to make a Confiscation Order under the Proceeds of Crime Act 2002. This is the route by which the criminal justice system seeks to remove financial gain from offending.
While there are also civil recovery processes under the Proceeds of Crime Act that do not require a conviction, this article focuses solely on criminal Confiscation Orders following from conviction.
What is a Confiscation Order?
It is important to understand that a Confiscation Order is not seen as a punishment. It is seen as a financial recovery mechanism to prevent criminals from profiteering from their criminal conduct. The order will usually coincide with punishment.
A Confiscation Order is not an automatic process. There requires to be a conviction and the Crown must ask the Court to grant confiscation. The process is commenced by the serving of a statement of information.
The statement of information will outline the criminal lifestyle or particular criminal conduct that a person is said to have as well as two crucial figures; the benefit amount and the available amount. The benefit amount will be an assessment of how much the individual is said to have gained through offending. The available amount will be the value of the person’s assets at the time of the confiscation proceedings. The amount that the Court will be asked to confiscate will be the lower of the benefit amount and the available amount. The law permits reviewing the preceding six years in criminal lifestyle cases.
What is the benefit amount?
The benefit amount is expressed as a figure but will encompass any property or assets seized. In criminal lifestyle cases may include assets such as houses, cryptocurrency or illegitimate sources including drugs. In relation to specific conduct cases, it will usually be the direct benefit. For example, in criminal lifestyle cases the prosecutor can call into question all assets purchased over the previous six years. That is commonplace particularly following convictions for drug dealing. Alternatively in specific criminal conduct cases, if a person obtained £100,000 through a fraudulent scheme, that would be the benefit amount even if the money is no longer in the person’s possession.
What is the available amount?
The available amount reflects the figure that the amount the person has that can be paid towards a Confiscation Order. It will include any and all realisable property such as cash, houses, vehicles and other realisable assets. It may, crucially, take into account assets owned jointly or transferred to others, particularly if done to thwart confiscation proceedings. Certain obligations can be removed from the available amount (e.g. outstanding mortgages). The available amount may be the assets seized by the Crown at the point of arrest, those subject to a restraint order or moratorium or entirely unrestrained assets.
What happens if the benefit amount exceeds the available amount?
Whilst the Confiscation Order will be for the lower of the available amount and the benefit amount, that is not to say that if your benefit outweighed the available amount, you would escape the clutches of the proceeds of crime proceedings having benefitted from your crime. The benefit amount is recorded within the Confiscation Order and it would be open to the Crown to seek an increase in the enforcement of the order to the benefit amount. That can occur if further assets come to light or the individual’s assets increase.
What happens if there is a dispute?
If matters are disputed, the Court is likely to assign a proof to hear evidence on the issues before making a determination. The burden of proof rests on the individual to disprove matters advanced by the statement of information on the balance of probabilities.
Payment and consequences of non-payment
The Court will assign a deadline for payment to be made. A default on that deadline can result in a period of imprisonment being imposed and enforcement measures may continue beyond that. The Court may impose interest until the debt is satisfied.
Why specialist advice matters
Confiscation proceedings are one of the most complex and technical areas of criminal law. Confiscation orders can have far reaching consequences meaning that early specialist advice can be crucial in protecting yourself and your assets.
There are various matters that can be challenged including the calculation of the relevant figures, whether there is a criminal lifestyle, asset valuations and third-party interests.
We have a wealth of experience in assisting clients that find themselves facing confiscation proceedings. If you find yourself in such a position, contact us for confidential advice. Early intervention can make a significant difference to the outcome.
Senior Associate Ross McGowan
