“We are hitting organised criminals
where it really hurts – in their pockets.” So said
David Blunkett, voicing a sentiment that few would disagree
with. However, the effect of the Proceeds of Crime Act 2002
is not restricted to depriving organized criminals of their
ill-gotten gains. It will also punish suspected criminality
without normal due process protections. The targets of the Act
will not only be drugs lords and arms traffickers, but those
suspected of (though not necessarily convicted or charged with)
far less exotic offences such as theft. This Act therefore gives
the state power to use its full, and much strengthened, clout
against ordinary citizens who may be guilty of nothing more
blameworthy than receiving a monetary gift from a loved one,
but will have to prove their innocence if they are to keep their
property.
Previously, although the state had considerable
powers to confiscate the assets of a convicted criminal, the
powers were underused. The new legislation aims to rectify this
by transferring many powers previously exercised by the High
Court to the Crown Court. It also creates the Assets Recovery
Agency, which has far-reaching powers to investigate financial
affairs, and to pursue the proceeds of crime through confiscation,
civil recovery or taxation. The two major ways in which the
Act attempts to prevent people profiting from criminal activities
are increased powers of confiscation (which came into force
on March 24th 2003) and civil recovery (which came into force
on February 24th 2003). The civil recovery measures are particularly
significant because, for the first time, they allow the use
of civil recovery proceedings even where a person has been acquitted
in criminal proceedings, or has never been charged with a criminal
offence. This article will examine the human rights implications
of the new civil recovery measures and of the confiscation powers
in England and Wales.
Civil Recovery
Civil
recovery is wrong in principle because it imposes punitive
sanctions and the stigma of being branded ‘probably a
criminal’ where the state does not have sufficient evidence
to mount a criminal prosecution. Conversely, where there is
sufficient evidence to use the criminal process, that system
is undermined if the state is able to opt for the easier option
of pursuing someone through the civil courts. Civil recovery
also has the effect of denying respondents the protections that
exist in the criminal process specifically to ensure that the
state is not able to wield its much greater powers to abuse
that process.
Civil recovery in England will be dealt
with by the newly established Assets Recovery Agency (‘the
Agency’). The Agency can bring proceedings to recover
property which is, or which represents, property obtained through
unlawful conduct. The standard of proof is the balance of probabilities,
and the wording of the statute is designed to ensure that the
courts are prevented from using a heightened civil standard
of proof as they have done in other quasi-criminal situations.
It is not clear how the civil recovery
process will co-exist alongside criminal proceedings, but there
are no restrictions on the discretion of the Director of the
Agency to prevent civil recovery either before a criminal trial
or after an acquittal has been obtained. The Director does not
even have to show that she has a reasonable suspicion that a
criminal offence has been committed in relation to the property
in question. Neither do the courts have the power to scrutinize
the appropriateness of civil confiscation.
Civil recovery before a trial, or after
an acquittal, may interfere with the presumption of innocence;
the former could prejudice the outcome of the trial and the
latter could cast doubt on the safety of the verdict. This situation
would be incompatible with the presumption of innocence, protected
by Article 6(2), and could be challenged on this basis. However,
Article 6(2) only applies to criminal proceedings. Previous
challenges to confiscation provisions have failed because the
UK courts and the European Court of Human Rights have held that
confiscation is not a criminal charge but simply forms part
of the sentencing process and therefore does not receive Article
6(2) protection (R v Benjafield [2002] 1 All ER 815, R v McIntosh
[2001] 2 All ER 638, Phillips v UK, July 2001, 11 BHRC 280).
As the forfeiture of assets using civil recovery is clearly
labelled as civil, the Government will undoubtedly argue that
Article 6(2) does not apply here either. However, the approach
of the European Court has been to look at the substance of provisions
in question, not their form. There is a strong argument that
civil recovery is a criminal charge because of the substantial
impact that such proceedings would have on the respondent, and
his family. Further, as civil recovery can occur in respect
of offences for which there has been no conviction, the forfeiture
of property cannot be classified as part of the sentencing process.
A challenge could also be made on the basis of Article 6(1),
which gives more limited protection to the presumption of innocence.
If it was established that Article 6(2)
did apply to civil recovery, then measures could be attacked
under Article 6 more generally as the safeguards for respondents
are well below the standard required in criminal proceedings.
For example, the civil procedure rules on the admissibility
of hearsay evidence are inappropriate in these type of proceedings.
The unlimited retrospective effect of the civil recovery measures
is also a cause for concern, and the Joint Committee on Human
Rights believes that the provisions may be incompatible with
Article 7 of the Convention on this basis.
The Agency need not specify which particular
type of criminal conduct the property was obtained by, so long
as it shows that it was obtained through one of a number of
types of unlawful conduct. This provision will encourage the
deliberate non-disclosure of information and the use of public
interest immunity certificates.
Use of such certificates would result
in the key issue of the case
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–
what unlawful conduct is alleged and whether it occurred –
being resolved in the absence of the respondent, stacking the cards
even further in favour of the state.
Confiscation
Confiscating
the proceeds of a crime for which a person has been convicted is
uncontentious. However, under the new scheme, confiscation orders
can be made in respect of crimes for which no conviction
has been obtained or sought. This is because when a person’s
convictions reach the minimum threshold, a series of reverse burdens
– ‘statutory assumptions’ - are imposed which
have the effect of making any property for which the source is not
apparent liable to confiscation. A person is presumed to have a
general criminal disposition because of his conviction for particular
offences, and therefore, any unaccounted for property is assumed
to be the proceeds of some crime. The onus lies on the defendant
to show on the balance of probabilities that the assumptions are
incorrect or, that a serious risk of injustice exists. For example,
if a person has two convictions for theft, but has also been charged
with four other offences three years ago and was acquitted, property
which the prosecution believes may have been acquired through those
offences can be confiscated.
Such a harsh system may be justified if its
application is limited to only those involved in serious organized
crime. The Government claims this is precisely the group that the
legislation is aimed at. However, the thresholds that dictate when
the reverse burdens apply are very low. The defendant must have
been convicted of two offences in a six year period, or at least
four offences on the same occasion, but there is no minimum requirement
about how serious these offences must be, so long as the total benefit
was at least £5,000. Alternatively, if the defendant is convicted
of a single “criminal lifestyle” offence, the statutory
assumptions will apply. Finally, where an offence is committed over
a minimum six month period and the benefit to the defendant has
been at least £5,000, this will also trigger the assumptions.
Many other countries, including France, Australia, New Zealand and
Canada, use some kind of system of reverse burdens in confiscation
proceedings, but none operate as widely as those in this Act.
The view that Article 6(2) does not apply
to confiscation because it is seen as part of sentencing does not
have unanimous support. In the European Court in Phillips, two of
the five judges partly dissented on the grounds that the majority
had taken too narrow a view of the scope of Article 6(2), and that
where the “sentencing” process involved disputed facts
that went to the heart of the case (not merely to assess general
character), such as whether certain property was the proceeds of
drug trafficking, Article 6(2) did apply. The jurisprudence of the
Court showed that Article 6 applied to all stage of criminal proceedings,
including sentencing, and further, that the other paragraphs of
Article 6 should be seen as specific parts of the guarantee of a
fair trial in paragraph one. This makes sense, as the presumption
of innocence is clearly an essential element of a fair trial. Despite
all this, the dissenting judges in Phillips shared the conclusion
of the majority that the specific use of reverse burdens and the
restriction on the rights of the defendant was not serious enough
to merit a violation of Article 6(1) or (2).
The use of reverse burdens causes problems
in respect of the presumption of innocence. The reverse burden scheme
is historically anomalous in the context of English legal history
and tradition; reverse burdens are only used in criminal offences
for determining narrow issues such as exemption clauses or straightforward
questions about unlawful possession of dangerous items. In contrast,
the reverse burden provisions in s.10 deal with a wide range of
issues which may be difficult to disprove because the events in
question occurred many years ago: financial records may no longer
be in existence and third parties may be unavailable.
The problem with challenging confiscation
under Article 6(2) is that, as noted above, previous rulings have
held that confiscation proceedings are not a determination of a
criminal charge. However, as shown in the example above, confiscation
can take place in respect of offences for which there has been no
conviction, and so cannot come in the sentencing category in those
circumstances. If it is found that Article 6(2) does apply, there
is a strong human rights argument that it is wrong to place the
burden of proof on the defendant to prove his innocence, particularly
as the length of imprisonment for non-payment can be up to ten years.
The courts will balance the rights of the individual against the
state’s interest in crime prevention and then decide whether
the interference with the presumption of innocence was strictly
necessary.
A number of additional limitations upon fundamental
criminal law principles make the reverse burden provisions unnecessary
and make their incursion into the presumption of innocence more
significant. Adverse inferences may be drawn from a defendant’s
silence, presumptions of a general criminal disposition are drawn
from convictions for particular offences, and only the civil standard
of proof applies. The principle of finality is disregarded as the
court can make an order any time within six years of the date of
conviction, or reconsider the benefit obtained or the amount of
money available within that time period. If a defendant were somehow
able to hide some assets without the reverse burden provision, the
Act already provides a procedure for a new order to be made or the
old one varied. Therefore, the system fails the Article 6 “strict
necessity” test.
The Proceeds of Crime Act will have an impact
on the rights not only of serious criminals, but also of anyone
suspected of being involved in unlawful activity. The motivation
of removing the incentive for organised crime is commendable, but
the means by which this is done in fact casts its net far wider
than this aim, and consequently, could undermine the status of the
criminal process. 
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