Confiscation: multiple defendants & double counting

The Court of Appeal has recently handed down its judgment in Lambert & Walding v R [2012] EWCA Crim 421 (8 March 2012).  This was a confiscation case, under the Proceeds of Crime Act 2002, following the conviction of Mr Lambert and Mr Walding of drugs and money laundering offences.

The Crown Court judge found that the benefit of the offences was £107,860 and that this benefit had been obtained jointly by the two co-defendants.  He also found that, taking into account the equity in the homes which they owned, each man had an 'available amount' in excess of that figure.  None of these findings were disputed on appeal.

The Crown Court judge had made a confiscation order in the sum of £107,860 against Mr Lambert and a confiscation order against Mr Walding, also for £107,860.  As a consequence the Crown stood to recover a total of £215,720 from the defendants following a crime from which the benefit had been only half of that amount.

Mr Lambert and Mr Walding appealed against the confiscation orders - arguing that they each should have been ordered to pay an amount equal to only half of the total benefit derived from the crime.  Ordering each of them to pay the full amount was, their counsel argued, disproportionate and unlawful being in breach of the defendants' human rights and an abuse of process.

The Court of Appeal upheld the confiscation orders and rejected all the arguments put on behalf of the defendants.  In so doing the Court of Appeal followed the trend of previous cases including the leading case, the House of Lords' judgment in R v May [2008] UKHL 28.  In that case the House of Lords had said that, as a long established feature of common law in England, a person who owns property jointly with another holds the whole of the jointly held property.  (I am here using the word 'property' in its legal sense - meaning an asset of any description.)  Therefore a person who obtains property jointly thereby obtains all of that property.  Since the confiscation legislation requires the court to equate each defendant's benefit with the value of the property obtained by him it follows, said the House of Lords, that each defendant's benefit is equal to the whole of the property jointly obtained.

This is probably not the outcome which the layman - or even the accountant - would have expected!  It may not even be the outcome which MPs would have expected when they voted to approve the legislation.  But it is what the courts have found the legislation to mean.

David

Comments
stepurhan's picture

Determining split    1 thanks

stepurhan | | Permalink

Splitting the proceeds would appear to create a separate problem. Due to the illicit nature of criminal property. It seems unlikely that it would be possible to determine an exact split of benefit. Could joint defendants tie up court time by each claiming to have received less than 50% of the benefit? Each could claim they are being unfairly penalised by being assigned a share of the benefit greater than that.

I'm not saying that the current situation is ideal, and it does seem bizarre that twice the amount obtained could be assessed in this way. Perhaps this should be more well publicised. I can't help thinking that if more people knew that they could end up paying back a lot more than they personally received in a criminal act, that woudl be a hearty deterrent.

davidwinch's picture

The split or share

davidwinch | | Permalink

I can see that there might be issues of determining the split or share of an individual defendant.  I would suggest that courts would assume an equal split and would take some persuasive evidence to depart from that.

Even then however there may be an issue where the exact number of persons jointly entitled in an organised crime might not be known.

Clearly the burden would be on the defendant to establish that his share was less than the whole, and what his share was.

A similar problem can arise in conspiracy cases.  You might be interested in my blog article "Confiscation, conspirators, couriers and money launderers" which includes the following:

"So in confiscation proceedings following a conviction for conspiracy it is necessary to consider the role played by the individual conspirator and the benefit obtained by him (including any benefit which he has obtained jointly with one or more other members of the conspiracy).

The Court of Appeal summarised the position in the case of R v Rooney [2010] EWCA 2 as follows: “(a) if a benefit is shown to be obtained jointly by conspirators, then all are liable for the whole of the benefit jointly obtained. (b) If, however, it is not established that the total benefit was jointly received, but it is established that there was a certain sum by way of benefit which was divided between conspirators, yet there is no evidence on how it was divided, then the court making the confiscation order is entitled to make an equal division as to benefit obtained between all conspirators. (c) However, if the court is satisfied on the evidence that a particular conspirator did not benefit at all or only to a specific amount, then it should find that is the benefit that he has obtained.”

David

b.clarke's picture

Not sure

b.clarke | | Permalink

stepurhan wrote:

..... I can't help thinking that if more people knew that they could end up paying back a lot more than they personally received in a criminal act, that would be a hearty deterrent.

Not sure I agree with you on that. After all, how many would-be criminals expect to get caught?

 

 

Why should fraudsters pay less?

louisVW4 | | Permalink

Fraudsters obtain financial benefit at the expense of others, which in turn they invest in 'assets' which invariably increase in value over time, or they obtain assets which they could not have afforded but for the proceeds of their criminal activities. If they had not had the initial fraudulently obtained 'capital' to invest, they would not have their assets.

They cannot claim they should pay back the first £100K they obtained fraudulently, but not the second £100K, even though they would not have had it without the first £100K.

It therefore follows, they should not be assisted in any defense against the courts confiscating the full value of their investments.

davidwinch's picture

It's not about investments

davidwinch | | Permalink

louisVW4 wrote:

Fraudsters obtain financial benefit at the expense of others, which in turn they invest in 'assets' which invariably increase in value over time, or they obtain assets which they could not have afforded but for the proceeds of their criminal activities. If they had not had the initial fraudulently obtained 'capital' to invest, they would not have their assets.

They cannot claim they should pay back the first £100K they obtained fraudulently, but not the second £100K, even though they would not have had it without the first £100K.

It therefore follows, they should not be assisted in any defense against the courts confiscating the full value of their investments.

The issue is that where two criminals, call them X and Y, work together to obtain £100k by crime - but then are caught - should BOTH X and Y be required to 'pay back' £100k, meaning that in total they 'pay back' £200k although only £100k was stolen.

Of course if they have created additional wealth using what they stole then that additional wealth is liable to confiscation in addition (there has never been any dispute about that).

David

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