LEGAL EAGLE: The Proceeds of Crime Act

Proceeds of crime
Proceeds of crime

The Proceeds of Crime Act 2002 was introduced in order to tackle the issue of recovering from convicted persons the benefit that they derived from their criminal activity.

The Act introduced broad powers for the recovery both at the time of making the order and in the future. Failure to comply with an order in itself is imprisonable, with time in custody being determined by the amount of outstanding debt.

What can the court order the defendant to pay?

On application from the prosecution, the court has the power to order the seizure and disposal of assets of the defendant, such as real estate, motor vehicles, jewellery etc. if it can be demonstrated that the subject was living a ‘criminal lifestyle’. If this can be proven, then it is assumed that the assets have been funded by the benefit of the defendants’ crimes.

The court can also order payment based on the benefit derived from particular criminal conduct such as the value of drugs supplied or VAT evaded, meaning that even a first time or one-off offender could still be made subject of such an order.

What if a defendant claims they don’t have the money/assets to pay back?

Payment of the recoverable amount is due on the date that the order is made however the court will allow three months for payment, with the discretion to extend this period to six months. Given the circumstances in which the hearings often take place, it is not unusual for defendants to have such orders made at a time when they no longer have readily available assets to discharge their obligation. So long as the court is satisfied that this is the case and that the defendant has not deliberately hidden or disposed of assets to avoid payment then the court will often make an order for the full Benefit Amount but then accept repayment of a nominal amount, usually £1.

Does this mean the defendant escapes having to pay back the money altogether?

When such orders are reported, it can often lead to the mistaken impression that the person concerned has escaped the burden of paying for their actions. This public perception can be both misleading and a cause of resentment and animosity towards the legal system. The reality is that the outstanding debt will remain until it has been fully repaid and this can include recovery from future assets and income, even if gained legitimately.

l Ben Hoare Bell LLP has several specialist Solicitors that specialise in Criminal issues. If you are concerned about any of the above and would like to receive some advice please contact our Solicitors on 0191 565 3112 or email advice@benhoarebell.co.uk. Visit www.benhoarebell.co.uk for more information.