Proceeds of Crime Bill

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Mr. Ainsworth: In that case, let us turn to amendment No. 390. We oppose it. The Government do not agree that a respondent who satisfies the criteria under subsection (4) should have an automatic exemption from civil recovery. Those criteria constitute a standard defence in civil law. The defence does not attract automatic exemption elsewhere and we do not consider that it should do so under the clause. Indeed, the courts have specified that the defence should be developed on a case-by-case basis. When the criteria in subsection (4) are met, the court must retain the ability to exercise its judgment in the light and circumstances of the case.

Let us suppose that the respondent has spent money on an expensive cruise, and would not have done so had he not received as a gift some very valuable jewellery that transpires to be the proceeds of another person's unlawful conduct. Whether the respondent should be allowed to keep the jewellery must surely depend on the circumstances, including the degree of detriment that he will suffer if it is recovered. If he is wealthy, the court may think that the detriment that he will suffer is small and is outweighed by society's entitlement to recover the criminal proceeds. Why, after all, should he be allowed to benefit from them? If, however, the recovery of the jewellery would throw him into penury and prevent him from maintaining his mortgage payments, leading to the loss of his home, the court may decide that he should be allowed to keep the jewellery.

There may be intermediate cases, in which the court decides that some, but not all, of the jewellery should be recovered. That is why subsection (3) is drafted as it is. It requires the court to consider whether recovery would be just and equitable and, in doing so, to weigh up the enforcement authority's interest in recovering the property on one hand, and the degree of detriment that would be suffered by the respondent on the other.

Norman Baker: Can the Minister explain the reason for subsection (3)(b)? Surely it is axiomatic that, throughout the Bill, all provisions have been assessed for compatibility with the Human Rights Act 1998. The phrase that is used in subsection (3)(b) does not appear throughout the Bill with regard to every provision, so why has it been thought necessary to include it in clause 267? Is there a specific point to be made, or is subsection (3)(b) redundant?

Mr. Ainsworth: Let me finish dealing with amendment No. 390, which was the main concern of the hon. Member for Beaconsfield (Mr. Grieve). We may then talk about why the Human Rights Act appears in the clause but nowhere else in the Bill.

I am sure that the correct approach is to allow the court to use its discretion, and to look at both sides of the argument when it is examining whether the respondent has suffered a bona fide change of position. We do not agree that civil recovery should be converted to a wholly discretionary order. That is the second, and even more wide-reaching, consequence of the hon. Gentleman's amendment. It seems to us that people seeking to hang on to the proceeds of unlawful

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conduct should be allowed to do so only in the limited and clearly defined circumstances that we have proposed. As I have said, the criteria are based on standard civil defences in other cases. Those are our main reasons for opposing amendment No. 390.

The hon. Members for Beaconsfield and for Lewes asked why the European convention on human rights was mentioned in subsection (3)(b) of the clause, but not elsewhere in the Bill. It is mentioned there because there is a duty to make a recovery order that is mandatory at that point. Potentially, that could conflict with the court's duty under section 6(3)(b) of the Human Rights Act, which makes it clear that that duty takes priority. Because we are insisting that the confiscation procedures are mandatory, we felt that it was appropriate to make it clear that the provisions of the Human Rights Act were none the less the overriding consideration in such policy. I think that I have dealt with the substantive point made by the hon. Member for Beaconsfield in connection with amendment No. 390, and I ask him to consider withdrawing the amendment.

Mr. Grieve: I am grateful to the Minister for his explanation. Speaking personally, I should be more reassured by the use of the word ''or'' rather than the word ''and''. I appreciate his point, and I suppose that I can rely on the Human Rights Act when an individual does not fall within subsection (4). It is odd, however, that the hon. Gentleman explicitly acknowledges the presence of the Human Rights Act, given that the only reason why the Bill refers to it is the acknowledgment that subsection (4), with its tightly drawn provisions, might turn out to be incompatible with it. If that were not the position, there would be no reference to the Act in the clause. However, if the amendment were accepted, it would provide a fall-back position for the court, which took the view that notwithstanding the strict fulfilment of the tests under subsection (4), it would still not be just and equitable to allow recovery to take place. That is the issue between us.

Mr. Paul Stinchcombe (Wellingborough): I wonder whether, by a side wind, the hon. Gentleman's amendment could bring about a situation in which it was not just or equitable for such action to take place, yet the conditions under subsection (4) were satisfied none the less.

Mr. Grieve: The hon. Gentleman makes a good point. It could be argued that a better amendment would be longer-winded than my amendment, and the clause would say:

    ''any provision in respect of any recoverable property if each of the conditions in subsection (4) is met and it would not be just and equitable to do so, or''

that it would not on some other grounds be just and equitable to do so. I listened particularly to what the Minister said, and as our argument developed, it struck me that the removal of the linkage between subsection (4) and the words ''just and equitable'' was undesirable. As the hon. Gentleman may have

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appreciated, that was not my intention. I wanted to allow for a further possibility, not to reduce the force of the original one. That is one of the reasons why I shall withdraw the amendment. I acknowledge that as it stands, it would not completely meet my objective. However, will the Minister consider the issue, because we may revisit it?

Mr. Ainsworth: We shall have a very happy Christmas.

Mr. Grieve: The Minister will have a very happy Christmas: he will be helped by many officials to consider my argument. As for my Christmas, I am informed that on 4 January I will have to think about the next set of amendments to table for our return to the Committee. [Interruption.] I reassure the groaning hon. Member for Birmingham, Hall Green (Mr. McCabe) that our proceedings in Committee will end on 5 February—I am grateful to have received some sympathy from Labour Members. I shall also think again and consider whether this matter should be reviewed on Report by way of a better-worded amendment. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 267 ordered to stand part of the Bill.

Clause 268

Functions of the trustee for civil recovery

Question proposed, That the clause stand part of the Bill.

Mr. Grieve: I tabled an amendment to the clause, but it was not selected. My inquiries revealed that, like many other amendments that I have tabled in the course of the Committee, it was not selected because it was thought to be unnecessary, as it stated something that was already included in the Bill. I raise that question now so that we may have the Minister's assurance on the record.

Subsection (1) states:

    ''The trustee for civil recovery is a person appointed by the court to give effect to a recovery order.''

Under subsection (2),

    ''The enforcement authority must nominate a suitably qualified person for appointment as the trustee.''

I assume that the court has the discretion to reject the nominee. My amendment was designed to make that clear. Those who know much more than I do about the drafting of legislation take the view that that is almost certainly the case—indeed, they are convinced—but a reassurance from the Minister in the pages of Hansard will provide that extra degree of assurance. Could the court reject the receiver nominated by the enforcement authority?

Mr. Bob Ainsworth: The hon. Gentleman may be assured that that is the case.

Question put and agreed to.

Clause 268 ordered to stand part of the Bill.

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Schedule 4

Powers of trustee for civil recovery

Question proposed, That this schedule be the Fourth schedule to the Bill.

Mr. Mark Field (Cities of London and Westminster): The schedule mentions compromise. I wonder what power the trustee has under paragraph 5, which refers to

    ''compromise or other arrangement in connection with any claim relating to the property.''

I wonder whether the Minister would elucidate, because it seems that the trustee has been stripped of power. In particular, I am slightly concerned about the position of third parties. Can the Minister clarify what the Government had in mind on the subject of compromise on the part of the trustee, and whether the passage is part of some standard documentation on trustee powers, which is found in similar Acts?

Mr. Bob Ainsworth: I reassure the hon. Gentleman that most of the details of the clauses that we are discussing are from other Acts and other rules for civil recovery. It may help him to know that property detailed in a recovery order may include a business, shares or some similar type of property. The trustee must be able to manage the property until he decides how best to realise it. The schedule therefore provides that the trustee has the power to manage property. That will allow him to preserve the value of the assets. That is a similar power to that available to the interim receiver or administrator under schedule 3.

The schedule provides the trustee with the power to take part in legal proceedings involving the property and to make a compromise in connection with any claim relating to it. He can do many other specified things that may be necessary before the property can be realised, including suing, being sued and employing agents. The Bill also provides a general power allowing the trustee to do anything else that is necessary or expedient. He effectively holds the ring and can settle proceedings involving the property. That is a standard provision lifted from other civil proceedings, not a new power that is not used elsewhere.

Question put and agreed to.

Schedule 4 agreed to.

Clauses 269 and 270 ordered to stand part of the Bill.

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