Proceeds of Crime Bill

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Mr. Bob Ainsworth: Only to agree with the hon. Member for Lewes (Norman Baker) that the change of words would make absolutely no difference.

Mr. Grieve: The Minister should consider changing the word, as ''must'' has a far more mandatory ring to it than ''may''. However, I shall move on to the other amendments.

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Mr. Ainsworth: The hon. Gentleman has had his victory for today; he cannot have another.

Mr. Grieve: There is no harm in asking, and ''must'' is the better word.

Amendment No. 390 is a wider amendment, because it would allow the court, notwithstanding that the criteria of subsection (4) were not fulfilled, a residual discretion not to make the order.

We have discussed judicial discretion. I have said that, if all of the four tests laid down in subsection (4) were to be met, it would be impossible to envisage circumstances in which an order could fairly be made—I think that the Minister agreed with that. However, what would be the situation if some of the tests could not be met? The recoverable property might have been obtained in good faith by someone but, for instance, he might be unable to show that, when he took the steps, he had no notice that the property was recoverable. In those circumstances, might it be appropriate for the court to be unwilling to make the

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order? With regard to those circumstances, the only protection at the moment would be incompatibility with the Human Rights Act.

At what point does one know that property is recoverable? Let us consider an example. Someone might have property in his possession that is associated—it is mixed in with his own property. That person has to live, and to operate. Before proceedings have been commenced, a rumour might start to float abroad that the property that he has held completely innocently, might be of interest to the Assets Recovery Agency. He has to deal and operate in that property to live; he has no other option—if he does not complete a deal, he may lose out. After proceedings have started, he fulfils all the criteria of subsection (4)(a) to (d), but it is alleged against him, ''When you took some of those steps, you should have known, even though you came by that property innocently and had taken steps in relation to it, that it was recoverable.'' He will fulfil the condition in subsection (4)(d), because he will be able to establish that it would be highly detrimental to him for the property to be removed and recovered by the enforcement agency. In those circumstances, should his only protection be the European convention on human rights and the Human Rights Act? I suggest that it should not be necessary to invoke them, and that the sensible course of action would be to allow him to rely on a judicial discretion, which would be provided by amendment No. 390.

Amendments Nos. 390, 392, 393 and 391 are alternative ways of approaching the matter, by tinkering around with some of the clauses. In light of the debate that we are having and the importance of amendment No. 390, it will not be necessary to press the amendments because they are simply illustrations of the way in which the clause could be altered by removing subsections. The amendments were designed to probe, and to stimulate discussion. Each amendment, if made, would affect what is possible and what is not.

I shall not press the amendments because the key amendments are amendment No. 389, which the Minister assures me is not required, and amendment No. 390, which would provide a measure of judicial discretion. I invite the Minister to concentrate on the latter.

Mr. Ainsworth: The hon. Gentleman invites us to consider how narrow the criteria that a person must meet are, and says that if all the criteria were met, all that would save a person from a recovery order would be the provisions of the European convention on human rights. He says that there should be a wider safeguard than that. Indeed, he spoke about a person against whom proceedings have not been started but about whom stories go around.

We are discussing what happens after a court has decided that there is recoverable property. The hon. Gentleman said that we were not discussing bona fide purchasers for value because they were dealt with elsewhere. Yes, they would have been dealt with in the court case. They would have had an opportunity to

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show the court that they were bona fide purchasers for value. If they had successfully shown that, they would not be considered at this point.

The hon. Gentleman asks for a broad safeguard after the decision has been taken. The safeguard for bona fide purchasers for value would be there because it would be present during the court proceedings when a decision was taken. We are discussing how the matter is dealt with after the court has taken the decision and decided how to deal with recoverable property that has been identified. That is the reason for the narrowness of the safeguard and the stipulation that all the different requirements be met. I am not sure that the hon. Gentleman portrayed that when he moved the amendment. We are not dealing with a totally innocent person who has been accused.

Amendment No. 389 would replace the word ''may'' with the word ''must'' in the first line of subsection (3), so that the phrase would read

    ''the court must not make''

rather than

    ''the court may not make''.

The amendment would have no effect on the meaning or the clarity of the subsection. However, although it would not make the subsection any worse—I will not argue with the hon. Gentleman about that—there is no need for change. If he argues for change, he must prove the need for it.

Amendment No. 390 would have two effects. First, the court would always be prevented from making a civil recovery order in a bona fide case of change of position. The provisions of subsection (3) envisage that such cases should attract exemption only to the extent that the civil recovery would not be just and equitable. Secondly, the amendment would introduce an entirely new exemption that would not be limited to bona fide change of position cases, in which civil recovery would be prohibited anyway, in which it would not be just or equitable to make the recovery order. In effect, that would convert civil recovery from a mandatory remedy to a discretionary one. The court would have to decide in every case whether it felt that the recovery of criminal proceeds was just and equitable.

Norman Baker: I have listened carefully to the Minister and he seemed to suggest that he wanted a mandatory regime rather than a discretionary one. As I understand it, that is why he is objecting to amendment No. 390, which would insert some discretion by replacing ''and'' with ''or''. In that case, why are the words

    ''it would not be just and equitable to do so''

included at all? What is their function? Are they intended to provide discretion and, if so, how is it that discretion fettered? If the Minister is really arguing for a mandatory clause, surely the words should not be there at all.

Mr. Ainsworth: The phrase applies only when considering the other issues dealt with in subsection (4). It is not intended to provide discretionary ability. The court decides whether there is recoverable property, after it has heard the case for and against. In

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those circumstances, when the court has decided that there is recoverable property the recovery is mandatory. The circumstances that we are dealing with are those in which people have taken actions after that, because they have received recoverable property that they did not know was forfeit, or they anticipated that they would receive that, and they have suffered detriment, and it would not be just and equitable to continue to recover property in those circumstances. That is the barrier over which the individual must climb. He must be able to show that all those things are the case in order to obtain the exemption that the clause provides. The clause is not intended to provide discretion on the recovery in the first place—that is the court's decision, and the rest flows from that.

Norman Baker: Subsection (4) sets out four tests, and there must doubtless be a factual assessment of whether the tests in paragraphs (a), (b), (c) and (d) are met. The phrase,

    ''it would not be just and equitable''

is not included with those facts in subsection (4). That phrase is slotted elsewhere in the clause, in subsection (3). That suggests that it is a matter not of fact but of discretion.

Mr. Ainsworth: The hon. Gentleman is absolutely right about the structure of the clause. However, the effect of the clause is that five tests must be met. Four of those are contained in subsection (4), but the ''just and equitable'' test would also have to be met. Therefore it is a narrow area, and the effect is that all five of the tests would have to be met. I am not denying that.

I am not sure what the hon. Gentleman is arguing for. Although he is pointing out things in the clause, he is not making an argument, other than that the confiscation should be discretionary. As I said, that is not the Government's position. We believe that when the decision has been taken, the recovery should be mandatory. We should provide people with safeguards in those limited circumstances in which, in effect, all five of the tests are met—the ''just and equitable'' test as well as the four objective tests laid out in subsection (4). The hon. Gentleman does not appear to agree with me.

Amendment No. 391 would remove the obligation on the court, when it is considering whether making a recovery order would be just and equitable, to have regard to the enforcement authority's interest in recovering the property.

Mr. Grieve: To make the position clear, amendments Nos. 392, 393 and 391 went together. They would have reduced the condition that the respondent obtained the recoverable property in good faith. The alternative approach would be amendment No. 390, which would substitute ''or'' for ''and'' before the words

    ''it would not be just and equitable to do so''.

On balance, I prefer that amendment, which is why I did not want to trouble the Minister unnecessarily.

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