Friday, May 16, 2008

Multiplying the Crown's benefit from crime

Depriving an offender of the benefit he obtained from his offending was the subject of three related House of Lords decisions this week: R v May [2008] UKHL 28, R v Green [2008] UKHL 30, and Crown Prosecution Service v Jennings [2008] UKHL 29 (all 14 May 2008).

The leading decision is May, where broad principles were stated for the interpretation of the relevant legislation, the Proceeds of Crime Act 2002[UK] (para 48):

“(1) The legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have retained such benefit, within the limits of their available means. It does not provide for confiscation in the sense understood by schoolchildren and others, but nor does it operate by way of fine. The benefit gained is the total value of the property or advantage obtained, not the defendant's net profit after deduction of expenses or any amounts payable to co-conspirators.

“(2) The court should proceed by asking the three questions posed above: (i) Has the defendant (D) benefited from relevant criminal conduct? (ii) If so, what is the value of the benefit D has so obtained? (iii) What sum is recoverable from D? Where issues of criminal life style arise the questions must be modified. These are separate questions calling for separate answers, and the questions and answers must not be elided.

“(3) In addressing these questions the court must first establish the facts as best it can on the material available, relying as appropriate on the statutory assumptions. In very many cases the factual findings made will be decisive.

“(4) In addressing the questions the court should focus very closely on the language of the statutory provision in question in the context of the statute and in the light of any statutory definition. The language used is not arcane or obscure and any judicial gloss or exegesis should be viewed with caution. Guidance should ordinarily be sought in the statutory language rather than in the proliferating case law.

“(5) In determining, under the Proceeds of Crime Act 2002, whether D has obtained property or a pecuniary advantage and, if so, the value of any property or advantage so obtained, the court should (subject to any relevant statutory definition) apply ordinary common law principles to the facts as found. The exercise of this jurisdiction involves no departure from familiar rules governing entitlement and ownership. While the answering of the third question calls for inquiry into the financial resources of D at the date of the determination, the answering of the first two questions plainly calls for a historical inquiry into past transactions.

“(6) D ordinarily obtains property if in law he owns it, whether alone or jointly, which will ordinarily connote a power of disposition or control, as where a person directs a payment or conveyance of property to someone else. He ordinarily obtains a pecuniary advantage if (among other things) he evades a liability to which he is personally subject. Mere couriers or custodians or other very minor contributors to an offence, rewarded by a specific fee and having no interest in the property or the proceeds of sale, are unlikely to be found to have obtained that property. It may be otherwise with money launderers.”

The results were that the Crown may obtain orders for confiscation of benefits that exceed the total benefits derived by the offenders from the crime they jointly committed. This is because each offender may – on appropriate facts - be treated as having joint ownership of the proceeds. To “benefit” from crime means to obtain property so as to own it, whether alone or jointly, which ordinarily connotes a power of disposition or control.

In submissions in Green there was some reference to what was argued to be a different approach in Australia, Canada and New Zealand. There was no decision on whether there was indeed such a difference (I suggest not, in NZ), but the House of Lords held that even if there were a difference, legislation in other countries would not assist in interpreting the meaning of the statute in question.

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