Law Commission issues key review of POCA 2002 confiscation regime

On 9 November 2022, the Law Commission published its final report following its review of Part 2 of the Proceeds of Crime Act 2002 (“POCA”), also known as the post-conviction confiscation regime. The regime, designed for the recovery of proceeds of crime from offenders, has long been considered ineffective.

The main criticisms levelled at it are that not only is the process for obtaining a confiscation order ^₁ complex and time consuming, but offenders are also able to frustrate attempts at enforcement. To better understand the current state of affairs, as of 31 March 2021, the UK’s confiscation debt had grown to over £2 billion. 

The Law Commission’s recently released report contains key recommendations on how to improve the existing statutory framework with the main objectives of giving courts more powers to enforce confiscation orders and seize offenders’ assets, of limiting unrealistic orders that can never be paid back, and of speeding up confiscation proceedings.

It is hoped that these proposals for reform will help recover an extra £8 million per year.

Law Commission Recommendations

The Law Commission has set out in clear terms its recommendations. They consist of eight main objectives, as follows:

1. Accelerate confiscation proceedings by establishing strict timetables for hearings, which take effect immediately after the defendant has been sentenced for their crime.
2. Give courts the power to impose “contingent enforcement orders” at the time that a confiscation order is made, meaning that if a defendant does not pay back the proceeds of a crime within a set time, assets – including property or funds in a bank account – could instead be taken to recover the proceeds of crime.
3. Strengthen “restraint orders”, which can be imposed by a court to stop a defendant from protecting funds or assets that might later be involved in confiscation proceedings. Place the “risk of dissipation” test – the test currently used by courts to judge whether to use this order – on a statutory footing and clarify what could trigger the use of these orders. Permit the payment of legal expenses connected with criminal and confiscation proceedings out of restraint orders.
4. Strengthen law enforcement agencies’ responses, through better police training and a national asset management strategy.
5. Update the provisions that factor in a defendant’s “criminal lifestyle”, when assessing their benefit from crime. Confiscation from defendants deemed to have a criminal lifestyle will also include gains from their wider criminal conduct. It is recommended that a defendant would have to commit fewer offences to be deemed to have a criminal lifestyle.
6. Give greater consideration to the defendant’s ability to pay, so that enforcement can be more effective. Defendants will be obligated to provide clearer and more detailed evidence of their financial position if they claim to be unable to pay their order.
7. Create more flexible tools to ensure better enforcement. Give judges the power to adjust the funds that must be paid back by a defendant, depending on their personal circumstances. This would avoid situations where there is no realistic prospect of recovering the full amount of the confiscation order.
8. Set out a clear statutory objective to govern the new confiscation regime – namely, to deprive defendants of their benefit from criminal conduct. This would provide clarity on the purpose of the regime and move away from any prior emphasis on “punishment”.

Comment

It is indisputable that the issues stemming from the current confiscation regime need to be urgently addressed. As it stands, the system is failing many victims and the Law Commission is now focused on redressing the situation through its recently-released set of proposals. Confiscation orders need to be realistic and enforceable in order to tackle the present-day issues faced by enforcers and the rising debt stemming from the current regime.

The recommendations proffered by the Law Commission aim specifically to give the courts more powers to enforce confiscation orders and seize offenders’ assets, to limit unrealistic orders that can never be paid back, and to speed up confiscation proceedings to allow victims to receive compensation more quickly. Further, permitting payment of legal expenses from restrained funds will have a huge impact on a practical level in sourcing income for the underfunded criminal law sector and enabling defendants to secure legal advice without reliance on Legal Aid. This also affords criminal defendants the same right to access justice as civil defendants subject to a freezing injunction.

Looking ahead, following the publication of its recommendations, the Law Commission is now working with the Office of Parliamentary Counsel to produce a draft bill to accompany these recommendations. This is due to be published in 2023.

_{1A confiscation order is a court order made personally against a defendant, compelling them to pay back some or all of the benefits from a crime they have committed, so that the proceeds are returned to the victim or the public.}