Transcript Civil Recovery and Human Rights

Civil Recovery: an Appraisal
Peter Alldridge
The perceived problem
‘... it simply is not right in Modern Britain that
millions of law-abiding people work hard to
earn a living, whilst a few live handsomely off
the profits of crime. The undeserved trappings
of success enjoyed by criminals are an affront
to the hard-working majority.’
Tony Blair, foreword to Cabinet Office Performance and
Innovation Unit, Recovering the Proceeds of Crime (London,
Cabinet Office 2000)
The Procedure – Proceeds of
Crime Act 2002 Part 5
In rem action for “property which is, or represents,
property obtained through unlawful conduct”, is in
the hands of someone other that a bona fide
purchaser for value.
Powers to freeze seize &c (POCA ss.243 et seq)
interim trustee
Strong investigatory powers (POCA ss. 340 et seq)
Proprietary right to be conferred by court (like
bankruptcy) on a trustee on success of action.
“Recovery”? “Civil”?
“Ce corps qui s'appelait ... le saint empire
romain n'était en aucune manière ni saint, ni
romain, ni empire.”
Voltaire, Essai sur l'histoire generale et sur
les moeurs et l'espirit des nations, Ch. 70
(1756)
v.t. L. recupero recuperare re and capio, to
take.
1. To regain; to get or obtain that which was
lost; as, to recover stolen goods; to recover
a town or territory which an enemy had
taken; to recover sight or senses; to recover
health or strength after sickness.
“David recovered all that the Amalekites had
carried away.” 1 Samuel ch 30. (King
James Version) OED
“Civil Recovery”- Possible
Rationales
1. to prevent the criminal committing further
crimes; or
2. because the criminal has no proper title to
property obtained by crime; or
3. because the fact that the property was obtained
by crime implies that the State acquires a
proprietary interest in them.
A-G’s guidance: Civil Recovery appropriate
where: (i) Conviction not feasible
1.
2.
3.
4.
defendant dead
criminal proceedings fail
insufficient admissible evidence of crime
insufficient admissible evidence to link
proceeds to crime
5. no jurisdiction over crime
6. defendant abroad (with property in UK)
A-G’s guidance (ii) Conviction feasible
but civil recovery better
1.
Using non-conviction based powers better meets an urgent need to
take action to prevent or stop offending which is causing immediate
harm to the public, even though this might limit the availability of
evidence for a future prosecution.
2. It is not practicable to investigate all of those with a peripheral
involvement in the criminality, and a strategic approach must be taken
in order to achieve a manageable and successful prosecution.
3. Civil recovery represents a better deployment of resources to target
someone with significant property which cannot be explained by
legitimate income.
4. The offender is being prosecuted in another jurisdiction and is
expected to receive a sentence that reflects the totality of the
offending, so the public interest does not require a prosecution in this
country.
(Attorney-General’s Guidance, Nov 2009)
Policy Questions
1. Does it matter whether:
(a) there is one body whose sole raison d’etre is to get money from crime
separate from other criminal justice enforcement bodies (the original Assets
Recovery Agency model, deriving from the Irish Criminal Assets Bureau);
or
(b) civil recovery is one of a range of powers vested in one or more criminal
justice enforcement bodies ([RCPO], SOCA, CPS, SFO, [ECA] )?
2. To what extent is there/should there be a reduction of the use of
prosecution, conviction and punishment as the principal professed
state response to financial crime, and their replacement with dealmaking with wrongdoers?
Civil Recovery as part of the work of criminal
justice enforcement bodies
Proceeds of Crime Act 2002 s. 2A
(2)
(a)
(b)
(c)
(d)
(e)
(3)
(a)
(b)
(c)
(4)
(1) A relevant authority must exercise its functions under this Act in the way which it considers is
best calculated to contribute to the reduction of crime.
In this section “a relevant authority” means—
SOCA,
the Director of Public Prosecutions,
the Director of Public Prosecutions for Northern Ireland,
the Director of Revenue and Customs Prosecutions, or
the Director of the Serious Fraud Office.
In considering under subsection (1) the way which is best calculated to contribute to the reduction
of crime a relevant authority must have regard to any guidance given to it by—
in the case of SOCA, the Secretary of State,
in the case of the Director of Public Prosecutions, the Director of Revenue and Customs
Prosecutions or the Director of the Serious Fraud Office, the Attorney General, and
in the case of the Director of Public Prosecutions for Northern Ireland, the Advocate General for
Northern Ireland.
The guidance must indicate that the reduction of crime is in general
best secured by means of criminal investigations and criminal
proceedings.
“... but these are serious crimes”
However there is a more important general principle. Those who commit such
serious crimes as corruption of senior foreign government officials must not be
viewed or treated in any different way to other criminals. It will therefore
rarely be appropriate for criminal conduct by a company to be dealt with by
means of a civil recovery order; the criminal courts can take account of cooperation and the provision of evidence against others by reducing the fine
otherwise payable. It is of the greatest public interest that the serious
criminality of any, including companies, who engage in the corruption of
foreign governments, is made patent for all to see by the imposition of
criminal and not civil sanctions. It would be inconsistent with basic
principles of justice for the criminality of corporations to be glossed over
by a civil as opposed to a criminal sanction. There may, of course, be a
place for a civil order, for example, as a means of compensation in addition to
a fine. It is therefore plainly desirable that the Lord Chief Justice should
consider directions that ensure any civil penalties are heard in conjunction with
criminal proceedings.
(Thomas LJ in Innospec [2010] EW Misc 7 (EWCC) (18 March 2010)
Self Reporting and Plea
bargaining in financial crime
Defendant is better resourced/lawyered
Financial detriments become business
expenses
Obloquy shame stigma and regulation
The Human Rights Issues
Article 6 - are “civil recovery” proceedings
criminal proceedings in disguise?
First protocol - is the civil recovery procedure
an unjustifiable interference with individual
property rights?
Art 6.2 and 6.3
Everyone charged with a criminal offence shall be presumed
innocent until proved guilty according to law.
Everyone charged with a criminal offence has the following
minimum rights:
to be informed promptly, in a language which he understands
and in detail, of the nature and cause of the accusation against
him;
to have adequate time and facilities for the preparation of his
defence;
to defend himself in person or through legal assistance of his
own choosing or, if he has not sufficient means to pay for
legal assistance, to be given it free when the interests of
justice so require;
to examine or have examined witnesses against him and to
obtain the attendance and examination of witnesses on his
behalf under the same conditions as witnesses against him;
to have the free assistance of an interpreter if he cannot
understand or speak the language used in court.
Article 6.2 – do these proceedings involve
someone being “charged with a criminal
offence” ?
Proceedings for confiscation orders after
conviction: not covered.
McIntosh (PC 2001); Benjafield (HL 2002); Rezvi (HL 2002);
Phillips v UK (ECHR 2002).
ASBO, Control Orders, Forfeiture, Tax?
Walsh v Director, Assets
Recovery Agency [2005] NICA 6
Decision: Civil recovery is not governed by
Article 6.2 and 6.3, because it does not
involve a criminal charge.
The reason in Walsh
Dealing with Lord Bingham’s advice in McIntosh v
HMA and the supposed analogy with confiscation
But Mr McCollum focussed on the statement that the confiscation
proceedings did not involve any inquiry into the commission of
drug trafficking offences and suggested that, if such an inquiry had
been required, the Privy Council would have held that the
respondent had been charged with a criminal offence. Again we do
not accept that submission. We do not regard the fact that there
was no inquiry into drug trafficking offences as pivotal to the
decision. (Kerr LCJ, para 26)
Critique
Lord Bingham in McIntosh says confiscation
is not covered by article 6(2) and (3)
because there has already been a conviction.
Kerr LCJ in Walsh says Article 6 doesn’t
apply to civil recovery because civil
recovery is just like confiscation.
BUT there is no conviction in civil recovery.
Lord Bingham in McInstosh v HMA para “There are a number of compelling reasons why
[someone subject to confiscation proceedings] he would not be … regarded [as being subject
to a criminal charge for the purposes of Article 6].
(1) The application is not initiated by complaint or indictment and is not governed by the ordinary
rules of criminal procedure.
(2) The application may only be made if the accused is convicted, and cannot be pursued if he is
acquitted.
(3) The application forms part of the sentencing procedure.
(4) The accused is at no time accused of committing any crime other than that which permits the
application to be made.
(5) When, as is standard procedure in anything other than the simplest case, the prosecutor lodges a
statement under section 9, that statement (usually supported by detailed schedules) is an
accounting record and not an accusation.
(6) The sum ordered to be confiscated need not be the profit made from the drug trafficking offence
of which the accused has been convicted, or any other drug trafficking offence.
(7) If the accused fails to pay the sum he is ordered to pay under the order, the term of
imprisonment which he will be ordered to serve in default is imposed not for the commission
of any drug trafficking offence but on his failure to pay the sum ordered and to procure
compliance.
(8) The transactions of which account is taken in the confiscation proceedings may be the subject
of a later prosecution, which would be repugnant to the rule against double jeopardy if the
accused were charged with a criminal offence in the confiscation proceedings.
(9) The proceedings do not culminate in a verdict, which would (in proceedings on indictment) be a
matter for the jury if the accused were charged with a criminal offence.
Does not differentiate
Confiscation and Civil recovery
Applies to
Confiscation
Applies to Civil
Recovery
(1) The application is not initiated by complaint or indictment and is not
governed by the ordinary rules of criminal procedure.
(2) The application may only be made if the accused is convicted, and
cannot be pursued if he is acquitted.
(3) The application forms part of the sentencing procedure.
(4) The accused is at no time accused of committing any crime other than
that which permits the application to be made.
(5) When, as is standard procedure in anything other than the simplest case,
the prosecutor lodges a statement under section 9, that statement
(usually supported by detailed schedules) is an accounting record
and not an accusation.
(6) The sum ordered to be confiscated need not be the profit made from the
drug trafficking offence of which the accused has been convicted, or
any other drug trafficking offence.
(7) If the accused fails to pay the sum he is ordered to pay under the order,
the term of imprisonment which he will be ordered to serve in
default is imposed not for the commission of any drug trafficking
offence but on his failure to pay the sum ordered and to procure
compliance.
(8) The transactions of which account is taken in the confiscation
proceedings may be the subject of a later prosecution, which would
be repugnant to the rule against double jeopardy if the accused were
charged with a criminal offence in the confiscation proceedings.
(9) The proceedings do not culminate in a verdict, which would (in
proceedings on indictment) be a matter for the jury if the accused
were charged with a criminal offence.
Y
Y
Y
N
Y
N
Y
Y
Y
Y
N
Y
N
Y
Y
Y
Y
Aftermath
Application for leave to appeal to HL refused.
Followed Belton [2006] NICA 2 (NI); Scottish
Ministers v Buchanan and Others [2006]
CSOH 121; Now SOCA v Gale [2010]
EWCA Civ 759
Proof of what?
Proceeds of Crime Act 2002 s.241-2
241 “Unlawful conduct”
(1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it
is unlawful under the criminal law of that part.
(2) Conduct which—
(a) occurs in a country outside the United Kingdom and is unlawful under the
criminal law of that country, and
(b) if it occurred in a part of the United Kingdom, would be unlawful under the
criminal law of that part,
is also unlawful conduct.
(3) The court or sheriff must decide on a balance of probabilities whether it is
proved—
(a) that any matters alleged to constitute unlawful conduct have occurred, or
(b) that any person intended to use any cash in unlawful conduct.
242 “Property obtained through unlawful conduct”
(1) A person obtains property through unlawful conduct
(whether his own conduct or another's) if he obtains
property by or in return for the conduct.
(2) In deciding whether any property was obtained through
unlawful conduct—
(a) it is immaterial whether or not any money, goods or
services were provided in order to put the person in
question in a position to carry out the conduct,
(b) it is not necessary to show that the conduct was of a
particular kind if it is shown that the property was obtained
through conduct of one of a number of kinds, each of
which would have been unlawful conduct.
The Standard of proof
241 (3) The court or sheriff must decide on a balance
of probabilities whether it is proved-
(a) that any matters alleged to constitute unlawful
conduct have occurred, ...
Proof of crime in Civil Actions
“I think that the time has come to say, once
and for all, that there is only one civil
standard of proof and that is proof that the
fact in issue more probably occurred than
not.”
Re B [2008] UKHL 35 (Lord Hoffmann)
Standard of Proof in Civil
Recovery proceedings
Serious Organised Crime Agency v
Pelekanos [2009] EWHC 2307 (QB)
19 The burden of proof is on the claimant and the standard
of proof is the balance of probabilities. However, the
serious nature of the allegations being made and the
serious consequences of such allegations being proved
mean that careful and critical consideration has to be given
to the evidence for the Court to be satisfied that the
allegations have been established. (Hamblen J)
Types of Evidence – (i)
Unaccounted wealth/lifestyle
33 In SOCA v Gale [2009] EWHC 1015 Griffith Williams J.
“14 ... While a claim for civil recovery may not be sustained solely upon
the basis that a respondent has no identifiable lawful income to warrant
his lifestyle, the absence of any evidence to explain that lifestyle may
provide the answer because the inference may be drawn from the
failure to provide an explanation or from an explanation which was
untruthful (and deliberately so) that the source was unlawful”.
10 While there is no burden on a respondent to
provide answers, clearly, if an answer is not
provided to an important question, and the court is
satisfied that the respondent had the knowledge to
answer the question and chose not to, an inference
adverse to that respondent may be drawn but any
decision as to a failure to answer must have regard
to delay, which must be ruled out as a possible
explanation for the failure to answer before any
adverse inference may be drawn.
Types of Evidence (ii) (SOCA v Gale
[2009] EWHC 1015)
1.
2.
3.
4.
5.
his criminal record from his youth until when he was 32 years old
together with his criminal associates;
police intelligence material which reveals that he was suspected of
drug trafficking in the United Kingdom before he emigrated to Spain
and on his return to the United Kingdom between 2001 and 2005;
an attempt to breach the Interim Receiving Order within days of
service by opening a new bank account in the name of Mrs Peel with
a transfer of 167,000 Euros from a Solbank account;
the compromise of proceedings bought in Ireland to restrain funds
which were the proceeds of crime;
his access to funds, not identified by the Interim Receiver or disclosed
to the Interim Receiver, which he has used to fund his living expenses
from July 2005 to date.
Types of Evidence (iii) Illegally
obtained evidence
Olden v SOCA [2010] EWCA Civ 143 (Evidence excluded in
criminal trial under s.78 PACE admitted in civil recovery
proceedings).
CPR 32.1(2) gives the court power to exclude evidence that
would otherwise be admissible. That power must be
exercised in accordance with the overriding objective in
Part I of the CPR to deal with cases justly [...] ;. .. the
exercise of the court's power involves balancing any
unlawfulness against the importance of the court reaching
the correct decision on the basis of all the evidence
available.
Types of Evidence (iv) Privilege
against self-incrimination?
• Pre claim form - ‘criminal’ phase - no
privilege but answers not admissible in
criminal proceedings. (Proceeds of Crime
Act 2002 s. 000)
• Post claim form - ‘civil’ phase – no
privilege arising only from the fact that the
defendant would face civil recovery
proceedings. (Belton v Director ARA NI
[2006] N.I.C.A. 2)
The Right to legal representation
Squirrell v Natwest [2005] EWHC 664
Proceeds of Crime Act 2002 (Legal Expenses
in Civil Recovery Proceedings) Regulations
2005 SI 2005 No. 3382
Proceeds of Crime Act 2002 (Legal Expenses
in Civil Recovery Proceedings)
(Amendment) Regulations 2008 No. 523
[1]
How much? What?
2006-7
2007-8
2008-9
2008-9 %
£
£
£
increase
on
previous
year
Cash seizure
3.3M
8M
9.2M
15
Cash forfeiture
2.3M
2.9M
4.5M
55
Restraint
Orders
27.2
M
46.8M
128.8M
175
Confiscation
Orders
14.5
M
11.6M
29.7M
156
Civil recovery
n/a
n/a
16.7m
n/a
Some conclusions
• Constitutional significance – incidence of
the duty to explain oneself to the State
• Application of the civil/criminal distinction
• Adequacy of the civil/criminal distinction as
a human rights axiom: can the distinction
support the weight?
• “Human rights culture and the State as
avoider” ‘creative compliance’ by the State