Is it a benefit, and if so what value?

John is known to be a drug dealer. The police have him under surveillance; they see him park his van in a car park, another van parks alongside and packages are transferred into John's van. John then drives away, and police tail him.

A few minutes later, John parks in another car park and before he can do anything police swoop and arrest him.

The packages turn out to be drugs (what a surprise!). A specialist Drugs Squad officer estimates their value at £1m (street value) and about £450,000 wholesale. The police build their case, and an officer's statement is that in his view John was preparing to sell the drugs to sub-dealers, who would in turn sell on to end users.

A couple of questions arise:

1. Can the police say with the necessary certainty that John was not planning to turn the drugs into the proper authorities? (As I understand it, the civil standard of proof applies here, in which case it seems a no-brainer, but I would appreciate comments.)

2. What is the value of the criminal benefit to John, for the purposes of a confiscation order?

If the prosecution case is that John was planning to sell the goods wholesale, then surely the criminal benefit is £450,000. But what if the confiscation order claims £1m?

 

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davidwinch's picture

Two different questions

davidwinch | | Permalink

I assume these events took place somewhere in England or Wales.  The likelihood is that 'John' will be charged with possession of controlled drugs with intent to supply.  The specifics of the charge will depend upon whether the drugs are of Class A (the most serious), Class B or Class C.  But s5 Misuse of Drugs Act 1971 is likely to be relevant.

The matter will wend its way to Crown Court where John may plead guilty (perhaps on a written basis of plea).

If he pleads not guilty then it will be for the Crown to produce evidence which makes the jury "sure" that John has committed an offence of which he is charged.  (Judges are no longer supposed to tell juries that they need to be "satisfied beyond reasonable doubt".)

With regard to whether John had an intention to supply, the amount of drugs in John's possession will be a factor (was the amount consistent with mere personal use by John himself?).

If John asserts that he intended to hand the drugs in to the police then the surveillance evidence will be relevant as will John's behaviour on recognising the police presence and on his arrest, and his comments (if any) in police interview.  The police are also likely to examine John's financial affairs and (of course) any previous convictions of his and, if relevant, this information can be put before the jury.

At trial John will have to decide whether to give evidence in his own defence and be subject to cross-examination.

So the question of John's guilt (or not) of the offence is ultimately decided on the 'criminal standard' by the jury.

If John is acquitted that is the end of the matter.

But let's assume John is convicted.  He will be sentenced (no doubt) to a term of imprisonment.  A factor in the length of sentence will be the weight and purity of the drugs in his possession.

John will also be subject to confiscation.  Having been convicted of a Schedule 2 Proceeds of Crime Act 2002 offence John will be deemed to have a 'criminal lifestyle' by virtue of s75.

His benefit in the confiscation will include the benefit of the offence of which he was convicted (based on the 'market value' of the drugs) plus any benefit arising under the criminal lifestyle assumptions of s10 PoCA 2002

Matters in the confiscation proceedings are decided on the civil standard (i.e. on the balance of probabilities) - see s6(7) - and, in respect of the statutory assumptions, once the Crown have shown that something falls within the scope of the assumptions the burden is upon John to rebut the assumption in connection with that something.

For example, John banked £1,000 in his bank account 5 years ago.  That is assumed to be a benefit of unspecified criminal conduct (it is a receipt caught by the s10(2) assumption).  If John can show he won £1,000 on the Premium Bonds that month (he needs some evidence - not just his own unsupported assertions) then the assumption is rebutted in relation to that £1,000. (An oversimplified example - but hopefully you get the gist.)

But what is the 'market value' of the drugs which John had in his possession?  In law it is the value those drugs would expect to be sold for in the market in which one would expect them to be sold.

That, of course, begs a few questions!  I have seen prosecutors say something like, "I would expect this cocaine of 40% purity to be 'cut' with additives to reduce the purity to no more than 10% and then to be sold in one gram wraps at £40 each.  Therefore the value of each kilogram of 40% purity is £160,000.  As 6.0 kilograms were seized their value is £960,000".

I would respond along the lines of, "But this was not of 10% purity as it had not been 'cut' and it was not in 1g wraps - so we need to look at the wholesale market value of the 6.0 Kg of drugs in the state they were in when they were seized".

Obviously my figure in these circumstances will be much less than the Crown's figure.

The leading case on this is R v Islam [2009] UKHL 30.  A good source of independent data on drug prices is the IDMU.

It may be that John will abandon the defence you have alluded to (that he was about to surrender the drugs to the police when he was arrested) and instead assert that he was a mere courier being paid a small sum to transport the drugs from A to B.  If that is the case John's lawyers may argue that, whilst he was guilty of the possession offence, his benefit for confiscation purposes is limited to the fee he was paid for acting as courier and that - in the legal sense - he never 'obtained' the drugs which he was transporting on behalf of another.

Ultimately if the Crown and the defence cannot agree on John's benefit there will be a confiscation hearing (probably before the same Crown Court judge who handled John's trial) and the judge will make a ruling. 

A judge's ruling on confiscation under PoCA 2002 is open to appeal (by either side) to the Court of Appeal and the Supreme Court (the court we used to call the House of Lords).

By the way, in terms of calculating John's 'available amount' the drugs have no value at all as John would not be permitted to sell them!

David

www.AccountingEvidence.com

b.clarke's picture

Amount of benefit

b.clarke | | Permalink

David,

Thanks for your comments. Always helpful. Let us assume that John has been convicted, a police witness has valued the drugs seized at the figures I have stated in the original post, and that those figures are not disputed by the defence. The only issue then is whether the benefit is £450,000 or £1m.

If, as I said originally, the prosecution case is that John was going to sell to sub-dealers, that implies to me that the benefit to him is £450,000. I don't pretend to have read the whole judgement in R v Islam yet, but I have not so far found anything in there touching on the distinction between wholesale and retail markets. There seems to be some unanimity between the judges that the value is market value and that market value is the price reached between willing buyers and sellers. John would apparently have been willing to sell for £450,000, if he had been allowed the chance, but I can't see anything in the judgement directly backing him up on that.

Have I missed something?

Brian

 

davidwinch's picture

Which market?

davidwinch | | Permalink

Brian

I have added some further detail to my earlier response, but I have not addressed the specific point on the Islam judgment.

One is not supposed to suggest that one judge is better than another, but I do think Baroness Hale is always worth reading.

Part of her (brief) judgment in this case, at para 25 of the report, reads:

"[This] is a case where we are applying the words of the same section to different factual situations.

We are concerned only with section 79 of the Proceeds of Crime Act 2002. Section 79(1) provides that "This section applies for the purpose of deciding the value at any time of property then held by a person". Section 79(2) provides that "Its value is the market value of the property at that time".

We are, I think, all agreed that references to a market can on occasions include a black market. In applying section 79(2), it seems to me entirely appropriate to ask "upon what market do we expect the value of this property to be raised?" When we are looking at the benefit which the malefactor has gained from his conduct, we look at the market in which he expected to dispose of the property in question. That is what it was worth to him."

 

There is (as you may know) another House of Lords decision in the case of CPS v Jennings [2008] UKHL 29 in which the court said (at para 14):

"a person benefits from an offence if he obtains property as a result of or in connection with its commission, and his benefit is the value of the property so obtained, which must be read as meaning 'obtained by him'".

 

So my view would be that these judgments both support the view that you need to look specifically at what John would have done with the drugs and what John would have got when he sold them.

The answer, based on the facts you provide, is £450,000.

(The position might be different if John had been convicted of conspiracy with others to supply controlled drugs and that conspiracy spanned wholesale to 'retail' or street-level supplies.  It might then be argued that the conspirators intended to sell the drugs in 1g wraps at street level and that therefore the £1 million figure was the appropriate one to reflect the value of these drugs to the operations of the organised criminal group.  John might be regarded to be physically in possession of the drugs (at the time of arrest) on behalf of the organised criminal group - i.e. holding jointly on behalf of himself and other members of the group.  As a joint holder his benefit would be equal to 100% of the amount jointly held.  You have to look very carefully at the facts of the case.

So it is perfectly proper for the expert police officer to provide the court with both figures.  And it is not surprising that the prosecutor will argue for the higher figure.  It is for the defence lawyers - supported if need be by their own expert (presumably that is yourself) - to argue for the lower one.

Even if John's available amount is not more than £450,000 it is still worth keeping the benefit figure down if you can because of the danger of a later application by the Crown under s22.)

David

b.clarke's picture

Many thanks, David

b.clarke | | Permalink

This does seem to be a point worth pursuing.

 

ShirleyM's picture

Another question

ShirleyM | | Permalink

If the alleged drug dealer claimed he was acting as a 'courier', would he have to name the person engaging his services, or would he get off with the lighter sentence regardless?

davidwinch's picture

Sort of, neither

davidwinch | | Permalink

Shirley

It is commonplace (as you might expect) for arrested persons to say that other persons were responsible for the more serious aspects of the crimes in which they were engaged - and then refuse to name those other persons.

Whether the defendant is believed and the effect (if any) that may have on sentence are matters for the prosecution, then jury and judge.

I mentioned earlier on this thread pleading guilty on a 'basis of plea'.  In effect this is where the accused admits some facts which result in him being guilty of the offence but puts forward other facts which limit his culpability (the seriousness of what he did).

Such a plea is usually put in writing and it is then for the prosecution to decide if they are going to accept the plea on that basis or go ahead with a full trial.

For example a basis of plea might say something like, "Although the conspiracy had been trafficking in drugs for some time prior to the arrests I only became involved from [date] and only received a payment of [amount] in that connection".

If the prosecution accept the basis of plea the judge has to sentence on the basis that the facts asserted in the plea are true.

Having established the extent of the criminality the defence is then able to put its arguments in mitigation (first offence, orphaned at an early age, fell into bad company, etc.).

So a sensible defendant with a good legal team can get several 'bites of the cherry'.  He might be able to get the most serious charges dropped and lesser ones substituted (e.g. from possession with intent to supply down to acting as a courier).  He might be able then to agree a basis of (guilty) plea which limits his culpability.  He then seeks mitigation of sentence (and a discount for having pleaded guilty).  If he goes to prison he will be looking for release on licence before he has served the full term to which he was sentenced.

On the other hand if he consistently denies everything he may be acquitted, but if convicted he will get a worse outcome.

However prosecutors do routinely accept a written basis of guilty plea with the rider that "the Crown accepts the plea without prejudice to confiscation proceedings".  When it comes to the confiscation the prosecution then has freedom to allege more substantial criminality for the purpose to calculating the 'benefit' figure.

David

ShirleyM's picture

Thank you, David

ShirleyM | | Permalink

.... for satisfying my curiosity.

Phil Rees's picture

"Thank you, David .... for satisfying my curiosity."

Phil Rees | | Permalink

You mean that you made it up?

 

davidwinch's picture

@Shirley

davidwinch | | Permalink

Any time - I love talking about my subject!

And of course if ever you are in trouble with 'the law' give me a call . . .

David

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