Confiscation under Part 2 of the Proceeds of Crime Act 2002

Current project status

• Initiation: Could include discussing scope and terms of reference with lead Government Department
• Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
• Consultation: Likely to include consultation events and paper, making provisional proposals for comment
• Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
• Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

We conducted a review of Part 2 of the Proceeds of Crime Act 2002, also known as the post-conviction confiscation regime. We published our final report and recommendations on 9 November 2022.

Download the report

Download the summary of the report

Download the impact assessment

Our project 

In 2018, the Home Office commissioned a Law Commission project with the objective of reforming Part 2 of Proceeds of Crime Act 2002. Our Consultation Paper considers how the existing statutory framework could be improved with the following objectives in mind:

1. to improve the process by which confiscation orders are made;
2. to ensure the fairness of the confiscation regime; and
3. to optimise the enforcement of confiscation orders.

In September 2020 we published a consultation paper with provisional proposals for the reform of Part 2, POCA 2002. We published our report containing our final recommendations on 9 November 2022. The recommendations bolster the current system, by giving courts more powers to enforce confiscation orders and seize offenders’ assets, limiting unrealistic orders that can never be paid back, and speeding up confiscation proceedings – allowing victims to receive compensation more quickly.

The problem 

A “confiscation order” is an order made personally against a defendant to pay a sum of money equivalent to some or all of their benefit from crime, depending on the assets available to the defendant. The defendant is not obliged to realise any particular asset to satisfy the order, as long as the sum of money is paid.

A confiscation debt running into the billions of pounds has led to a perception that the current confiscation regime is ineffective. As of 31st March 2021, the outstanding debt of unrecovered confiscation orders amounts to more than £2 billion.

There is strong consensus that the current regime is inefficient, complex and ineffective – with weak enforcement mechanisms restricting its ability to consistently recover criminal funds.

Consultation

We published our consultation paper on 17 September 2020; the public consultation ran until 18 December 2020. We received over 100 responses which have helped inform the recommendations we have made.

Our recommendations for reform 

In our final report published on 9 November 2022 we make a number of recommendations for reform to Part 2, Proceeds of Crime Act, also known as the post-conviction confiscation regime.

The reforms are designed to make the confiscation regime fairer, more efficient and more effective:

• Accelerate confiscation proceedings by establishing strict timetables for hearings, which take effect immediately after the defendant has been sentenced for their crime.
• 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.
• 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.
• Strengthen law enforcement agencies’ responses, through better police training and a national asset management strategy.
• 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. We recommend that a defendant would have to commit fewer offences to be deemed to have a criminal lifestyle.
• 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.
• 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.
• 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”.

Next steps 

We are now working with the Office of Parliamentary Counsel to produce a draft bill to accompany our recommendations which we aim to publish in 2023.

Terms of reference

The scope of our project is set by the Terms of Reference agreed between the Law Commission and Government. The project seeks to make proposals which clarify, simplify and modernise the post-conviction confiscation regime, contained within Part 2, Proceeds of Crime Act 2002.

This review seeks to analyse and address the most pressing problems with the law on confiscation, including the irregular compensation of victims in confiscation proceedings; the frequent imposition of unrealistic confiscation orders; the ineffective incentives and sanctions of the confiscation regime; the interplay between civil and criminal investigations under POCA, the complexity of the relevant legislative provisions and related case law; the role of restraint and the insufficient enforcement powers of magistrates’ courts and Crown Courts.

This review also seeks to explore and assess a range of solutions to these problems. It considers alternatives to the current value-based regime, options for a specialist forum for confiscation proceedings, and new ways of preventing the dissipation of assets.

The proposals in this consultation paper include amendments to the current legislative regime as well as proposals for non-legislative avenues for reform.

Our full Terms of Reference are available here.

Contact

For general enquiries, please contact us by email: confiscation1@lawcommission.gov.uk