Clause 19: Provision of information by defendant

44.     Clause 19 empowers the court, at any stage in the confiscation procedures, to order the defendant to provide any information it needs to enable it to carry out its confiscation functions. Where the defendant fails to comply with the court's order without reasonable excuse, the court may draw any inference it believes appropriate. The court might use the provision where, for example, the defendant has proposed to rely on certain matters in responding to the statement of information, and the court considers that it requires more information from the defendant in deciding the point at issue. The provision reproduces, with minimal changes, that in the current legislation.

Reconsideration

Clauses 20-22: Reconsideration

45.     Clauses 20 and 21 enable a confiscation order to be made where none was made in the original proceedings. Clause 22 enables the amount payable under a confiscation order to be increased. Application must be made to the Crown Court within six years of the original conviction. Clause 20 applies where no confiscation hearing was held after the original conviction. Clause 21 applies where a hearing was held, the court decided that the defendant had a criminal lifestyle but had not benefited from his general criminal conduct or that he did not have a criminal lifestyle and had not benefited from his particular criminal conduct. Clause 22 applies where a confiscation order has already been made. It may be used to increase the amount payable under a confiscation order on one or more occasions.

46.     The clauses reproduce, with some changes, provision in the current legislation. New provision has been required primarily to take account of the new role of the Director in criminal confiscation. Either the prosecutor or the Director may apply to the court for a reconsideration under these clauses.

47.     The principle underlying clauses 20 and 21 is that a reconsideration should only be applied for where new evidence comes to light. It is not appropriate for the prosecutor or the Director to have evidence at the time of the original proceedings, not to apply for a confiscation order on that occasion but to apply for a reconsideration at a later date. Provision is included to reflect this principle.

48.     Two technical provisions are new. Firstly, the court is required to take into account certain orders made against the defendant in the original proceedings (because the court might not have made the order in the original proceedings if it had made a confiscation order). However, those orders are not to be taken into account if they have already been taken into account by the court in deciding what is free property for the purposes of revaluation proceedings. This is to prevent the defendant from being allowed a reduction twice in respect of the same property.

49.     Secondly, clause 22(10) deals with the situation where both a compensation order and a confiscation order have been made in the original proceedings and the court has directed under clause 14(6) that the compensation order be paid out of the proceeds of the confiscation order. In this case, the court cannot take the compensation order into account in reconsidering the defendant's benefit. This is because the defendant would then be able to offset the impact of the compensation order twice.

Clause 23: Order made: reconsideration of available amount

50.     Clause 23 applies where the court made a confiscation order in an amount lower than the defendant's assessed benefit because there was insufficient realisable property to satisfy an order in the full amount. The prosecutor, the Director, or a receiver appointed in the case may apply to the Crown Court for the court to recalculate the available amount. This is an example of a function now exercised by the Crown Court that was previously exercised by the High Court.

51.     Any number of applications may be made and there is no limitation to the time when an application may be made (in contrast to clauses 20 to 22). If the court calculates that the available amount has increased, it may vary the amount payable under the confiscation order but may not increase it beyond the defendant's assessed benefit. Subsection (5) is additional to the existing legislation. It requires the court to have regard to any fine, ancillary order or compensation order imposed on the defendant following the original conviction (because these may affect the amount the offender is able to pay). However, subsection (6) contains similar technical provisions to clause 22 to avoid the defendant taking a compensation order into account twice.

Clause 24: Inadequacy of available amount: variation of order

52.     Where a confiscation order has been made, there is a procedure in the current legislation for the defendant or a receiver appointed in the case to apply to the High Court for a "certificate of inadequacy" on demonstrating that the realisable property is insufficient to satisfy the confiscation order. Where the High Court issues a certificate of inadequacy, the certificate may be presented to the Crown Court or magistrates' court and the amount of the confiscation order must then be reduced.

53.     The current certificate of inadequacy procedure is cumbersome and expensive. Clause 24 provides instead for application to be made directly to the Crown Court by the defendant or a receiver appointed in the case.

Clause 25: Inadequacy of available amount: discharge of order

54.     Under current legislation, there is no provision for writing off a confiscation order. In principle it should not be necessary, as an order cannot be made in a sum greater than the value of the property available to satisfy it and the certificate of inadequacy procedure, as now implemented by clause 24, is available to defendants. The absence of any provision for write-offs has on occasion led to unnecessary practical difficulties, for example, where a court makes a confiscation order based on an assessment of realisable property in the form of foreign currency, and a shortfall in payment of the order arises later due entirely to a change in the value of the currency concerned in the period between the order being made and payment.

55.     Clause 25 therefore provides that, where a justices' chief executive in the magistrates' court is enforcing a confiscation order, the justices' chief executive may apply to the Crown Court and the Crown Court may write the order off if the outstanding sum is under £1,000 and the reason for the shortfall is a fluctuation in exchange rates or some other factor specified in secondary legislation, or some combination of the two. The sum of £1,000 is variable by order. No similar provision is available where the Director is enforcing a confiscation order because enforcement by the Director will always involve the appointment of a receiver, who will be able to apply to the Crown Court under clause 24.

Clause 26: Small amount outstanding: discharge of order

56.     Clause 26 also applies only where a justices' chief executive is enforcing a confiscation order. It deals with the situation where a confiscation order has been satisfied almost in its entirety, but a sum of £50 or less is outstanding. The sum of £50 is variable by order. Under these circumstances, the justices' chief executive may apply to the Crown Court for the order to be written off. The clause introduces an exception to the general principle that a confiscation order may not be written off, but this is made subject to judicial oversight, and applies only where a small amount is outstanding. In such circumstances, the recovery of the sum in question would not justify the expense required to recover it.

Clause 27: Information

57.     Clause 27 contains provision ancillary to clauses 20-22. Its purpose is to make it clear that clauses 17 and 18 on statements of information and clause 19 on the provision of information by the defendant apply to reconsideration proceedings as they apply to confiscation proceedings immediately following a conviction.

Defendant absconds

Clause 28: Defendant convicted or committed

58.     Clause 28 is the first of a number of clauses dealing with confiscation orders against absconders. Under the current legislation of England and Wales, the High Court may make a confiscation order against an absconded drug trafficker (one who has absconded either after conviction or after proceedings have been instituted). The Bill empowers the Crown Court to make a confiscation order against an absconder convicted of, or charged with, any crime.

59.     The existing provision for the High Court in England and Wales to make a confiscation order against a drug trafficker who dies after conviction but before the Crown Court can make a confiscation order is abolished. It is considered that the recovery of benefit where the perpetrator is dead is better dealt with under the civil recovery procedures in Part 5 of the Bill.

60.     Clause 28 deals with the situation where a defendant is convicted either in the Crown Court or in the magistrates' court, and then absconds. In the case of a conviction in the magistrates' court, the defendant must have been committed to the Crown Court for sentence or confiscation (and sentence) before absconding. Either the prosecutor or the Director may apply to the Crown Court for a confiscation order to be made under this clause.

61.     Subsection (5)(e) provides that clauses 20-22 (reconsideration) do not apply where a person is still an absconder following conviction. Thus they do all apply where a convicted absconder returns (in the existing legislation, there is some slight doubt as to the applicability to absconders after conviction of what is now clause 20).

Clause 29: Defendant neither convicted nor acquitted

62.     Clause 29 deals with absconders who abscond prior to conviction. A confiscation order may only be made against such an absconder if two years have elapsed from the time he absconded. Under current legislation, a confiscation order may be made by the High Court on application by the prosecutor in these circumstances. Under the Bill, application is made to the Crown Court by the prosecutor or the Director.

63.     Subsections (5)(d) and (e) set out how clauses 20-22 (reconsideration) are to apply where the defendant absconds before he has been convicted. Clauses 20 and 21 do not apply and clause 22 does not apply whilst the offender is an absconder. It is not appropriate for clauses 20 and 21 to apply because they deal with the situation where decisions have been taken after a conviction. Subsection (7) provides that when a court has made a confiscation order in this situation it cannot go on to make another confiscation order if the defendant returns and is convicted.

Clauses 30 and 31: Variation of order; Discharge of order

64.     Clauses 30 and 31 apply where the Crown Court has made a confiscation order against an unconvicted absconder. They reproduce existing ancillary provision for unconvicted absconders, except that the functions are transferred from the High Court to the Crown Court.

Appeals

Clause 32: Appeal by prosecutor or Director

65.     Clause 32 gives the prosecutor and the Director a new power to appeal against any confiscation order made by the Crown Court, and against any decision of the Crown Court not to make a confiscation order. The appeal lies on any ground. For example, it will be available where the prosecutor or the Director believe that the court has failed to take account of property which should be taken account of, or has made some miscalculation concerning the amount of the order.

66.     An appeal does not, however, lie against a decision of the Crown Court under clauses 20 and 21 (reconsideration), or under clauses 28 and 29 (convicted and unconvicted absconders). The reason for the limitation is that these sections all grant the Crown Court a wide degree of discretion. The target of the appeal is not the court's exercise of a discretion but its application of the mandatory confiscation procedures.

Clause 33: Court's powers on appeal

67.     Clause 33 provides the Court of Appeal with broad powers. The Court of Appeal may confirm, quash or vary the Crown Court's confiscation order and, where the Crown Court decided not to make a confiscation order, it may either go through the confiscation procedures itself or direct the Crown Court to proceed afresh. Subsection (11) provides that, where the Court of Appeal makes a confiscation order and appoints the Director as the enforcement authority, it must direct the Crown Court to make a receivership order under clause 52. It is not thought appropriate that the Court of Appeal should make the receivership order itself.

68.     If the Court of Appeal makes or varies a confiscation order or directs the Crown Court to go through the confiscation procedures afresh and the Crown Court has in the meantime imposed a fine or ancillary order such as a forfeiture order on the defendant as part of the sentencing process, subsection (4) requires the court to have regard to the fine or order. However, the court is not required to take account of an order if it has already taken account of the order in working out what the free property held by the defendant is (to avoid double counting - see the note on clauses 20-22 above).

69.     Under subsection (7), where a compensation order has been made against the defendant, the Court of Appeal and the Crown Court proceeding afresh must have regard to it but may not order its payment out of confiscated monies. This is to prevent different treatment as between the appeal and the original proceedings.

Clause 34: Appeal to House of Lords

70.     Clause 34 enables the Court of Appeal's decision to be further appealed to the House of Lords. Clause 34 provides the House of Lords with similar powers to the Court of Appeal. They are not identical, however, because the House of Lords is reviewing the decision of the Court of Appeal, rather than the original decision of the Crown Court. Where a confiscation order has been made or confirmed by the Court of Appeal, the House of Lords may confirm, quash or vary the order. Where the Court of Appeal confirms the Crown Court's decision not to make a confiscation order or quashes the Crown Court's order, the House of Lords may confirm the decision or remit the case to the Crown Court, with directions, to proceed afresh. For practical reasons, the House of Lords will not itself proceed under clause 6.

Enforcement authority

Clause 35: Enforcement authority

71.     Clause 35 sets out the criteria that determine whether the confiscation order is to be enforced by the Director or by a magistrates' court. Under the current legislation, all confiscation orders are enforced by magistrates' courts, with the assistance of the prosecutor. Clause 35 provides that the Director is to be responsible for the enforcement of a confiscation order either where the Director applied for the order (including applications under the reconsideration and absconder provisions), where the Director appealed against a decision in respect of a confiscation order or where the Director applies to the court before the order is made to be appointed to enforce it. In all other cases, the confiscation order will be enforced by the magistrates' court and prosecutor, much as at present.

72.     Thus, if the Director is to enforce a confiscation order applied for by a prosecutor, this will have to be arranged when the confiscation order is made, and no later.

Enforcement as fines etc

Clause 36: Director not appointed as enforcement authority

73.     Clause 36 explains how confiscation orders are to be enforced where the magistrates' court is the enforcement authority. As at present, the order will be treated as a Crown Court fine and enforced, as is a Crown Court fine, by the use of the magistrates' court's fine enforcement powers, as set out in Part 3 of the Magistrates' Courts Act 1980 but subject to some modifications. One of the main features of treating the order as a Crown Court fine is that the Crown Court, where it makes a confiscation order, is required to set a term of imprisonment in default of payment. The maximum default term that may be imposed is determined by the amount payable under the confiscation order. The maximum default term applicable to a particular confiscation order varies from 7 days, for an amount not exceeding £200 to, at the other end of the scale, ten years for an amount exceeding £1 million.

Clause 37: Director appointed as enforcement authority

74.     Clause 37 also applies certain Crown Court fine enforcement measures where enforcement is to be by the Director. The relevant provisions require the court, where it makes a confiscation order, to specify a term of imprisonment in default of payment.

Clause 38: Director's application for enforcement

75.     As noted above, confiscation order enforcement by magistrates' courts will continue to be broadly regulated by the Magistrates' Courts Act 1980. This contains detailed provision on imprisonment in default of payment. Because the 1980 Act will not apply to enforcement by the Director, it has been necessary, in clause 38, to create specific procedures for a term of imprisonment in default to be enforced at the Director's request.

76.     Clause 38 contains provision broadly based on that in the 1980 Act, except that the Director will apply to the Crown Court to trigger the default term. This is in accordance with the concept of the Crown Court being the main venue for confiscation and related proceedings.

Clause 39: Provisions about imprisonment or detention

77.     Clause 39 contains general provision on imprisonment in default of payment of a sum due under a confiscation order, applicable whether the default term is imposed by a magistrates' court or by the Crown Court in response to an application by the Director. The provision reflects that in existing legislation and provides, in particular, that a term of imprisonment in default must be served consecutively to the substantive term imposed for the offence(s), and that the service of a default term does not prevent the sum due under the confiscation order from being collected subsequently by other means.

Clause 40: Reconsideration etc: variation of prison term

78.     As explained in the note on clause 36 above, the Crown Court fixes the period of imprisonment in default by reference to the amount due under the confiscation order. Clause 40 provides for the period of imprisonment in default to be varied where the court varies the amount due under a confiscation order under the following provisions of the Bill:

• Clause 22: reconsideration of benefit (resulting in upward variation of the amount due under the order)

• Clause 23: reconsideration of available amount (resulting in upward variation of the amount due)

• Clause 24: inadequacy of available amount (resulting in downward variation of the amount due)

• Clause 30: variation of order (for returned absconders, resulting in downward variation of the amount due)

• Clause 33: Court of Appeal's variation of Crown Court's order after prosecutor's or Director's appeal (resulting either in upward or in downward variation)

• Clause 34: House of Lords' variation of Court of Appeal order (resulting either in upward or in downward variation)

79.     The overall purpose of the provision is to clarify what happens when the variation of the amount due under a confiscation order changes the maximum period of imprisonment in default applicable to the order.

80.     Where the effect of the variation is to decrease the amount due under the order so that the new amount falls into a lower band, clause 40 requires the court to reduce the default term to one lower than the maximum applicable to the band in question. In other cases the court is given a discretion to amend the term of imprisonment in default, i.e. the court has power to increase it.

81.     In addition, where the amount due under the confiscation order is increased by interest payable under clause 13, the Director or the prosecutor may apply to the court to increase the term of imprisonment.

Restraint orders

Clause 41: Conditions for exercise of powers

82.     Clause 41 sets out the circumstances under which a restraint order, as provided for in the ensuing clauses, may be made. A restraint order has the effect of freezing property that may be liable to confiscation following the trial and the making of a confiscation order.

83.     At present, a restraint or charging order may be made by the High Court where proceedings have been instituted or the defendant is to be charged, or an application in respect of further confiscation proceedings has been made or is to be made (for example, for a reconsideration of the defendant's benefit). The Bill makes three fundamental changes to this scheme.

84.     Firstly, the power of the High Court to make a charging order is abolished. Secondly, the venue for restraint orders is changed from the High Court to the Crown Court, in accordance with the general principle in the Bill of the Crown Court being the main venue for confiscation proceedings and related proceedings. Thirdly, the point at which a restraint order may be made is brought forward in the Bill to any time after an investigation has been started (at present, although a restraint order may be made at the investigative stage, it is only possible to do so where charges are anticipated).

Clause 42: Restraint orders

85.     Clause 42 explains the nature and effect of a restraint order. It is an order prohibiting a specified person from dealing with any realisable property held by him (realisable property is defined in clause 83). Thus it may be made both against the defendant or person under investigation, and any other person holding realisable property. Subsection (3) provides for exceptions to be made for reasonable living and legal expenses and for carrying on any trade, business, profession or occupation. Subsection (4) prevents funds under restraint from being released for legal expenses to defend the criminal charges in respect of which the restraint order is made or for legal expenses relating to those charges which are incurred by a recipient of a tainted gift. Legal aid will continue to be available in those circumstances.

86.     Subsection (7) gives the court the power to make such order as it believes is appropriate for the purpose of ensuring that a restraint order is effective. The provision ensures that the Crown Court has general powers available to it such as the residuary powers currently available to the High Court. These will include, for example, the power to order a person to disclose his or her assets. Failure to comply with the order provided for in subsection (7) will fall to be treated as contempt of the Crown Court. Subsection (8) provides that a restraint order cannot be made in relation to any property subject to a charging order under any of the earlier confiscation legislation, reflecting the principle that a restraint order and a charging order should not be made in relation to the same property.

Clause 43: Application, discharge and variation

87.     Clause 43 lays down who may apply for a restraint order under the Bill, and sets out criteria like those in the existing legislation for the variation or discharge of restraint orders. As well as changing the venue for restraint order hearings and bringing forward the point at which restraint orders may be made, the Bill provides that application may be made by the prosecutor, the Director or an accredited financial investigator.

88.     The provision enabling the Director or an accredited financial investigator to apply for a restraint order is new. Accredited financial investigators are those accredited by the Director in accordance with clause 3. They are likely to be employed primarily in force financial investigation units (FIUs) or by Customs and Excise. Under clause 68, in order to ensure that the powers are only used in appropriate cases, applications will require the authority of a police officer of superintendent rank or the Customs equivalent or a financial investigator of the kind specified in an order made by the Secretary of State.

Clause 44: Appeal to Court of Appeal

89.     There is a general right of appeal against any order of the High Court in section 16 of the Supreme Court Act 1981. It applies to restraint orders made by the High Court and orders ancillary to them. The general right of appeal in the 1981 Act does not, however, apply to the Crown Court. Therefore, it has been necessary to create a specific right of appeal in the Bill in relation to restraint orders made (or not made) by the Crown Court.

90.     It is important to note that there is no right of appeal against the Crown Court's decision to make a restraint order. The appeal lies only against the Crown Court's decision to vary or discharge an order (or not to vary or discharge it). A person dissatisfied with a restraint order must first apply to the Crown Court for its variation or discharge before any appeal to the Court of Appeal is possible.

Clause 45: Appeal to House of Lords

91.     Under clause 45, only the parties to the Court of Appeal proceedings under clause 44 may appeal further to the House of Lords. Any person who wishes to contest a restraint matter must, therefore, first do so in the Court of Appeal.

Clause 46: Seizure

92.     Clause 46 allows a constable to seize any property subject to a restraint order to prevent its removal from England and Wales. In the current legislation, realisable property may be seized by a constable to prevent its removal from anywhere in England and Wales or Scotland. The current provision dates back to the Drug Trafficking Offences Act 1986, when there was no confiscation legislation in force in Scotland. This is not now the case and so (unlike the current provision) clause 46 does not need to apply to Scotland.

Clause 47: Supplementary

93.     Clause 47 contains ancillary provision relating to restraint orders. It re-enacts provision from existing confiscation legislation. The main effect is that where a restraint order affecting land is applied for, an "inhibition" may be placed on the property at the Land Registry preventing its disposal.