Proceeds of Crime Bill

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Clause 271

Agreements about associated and joint property

5.45 pm

Mr. Grieve: I beg to move amendment No. 395, page 156, line 6, at end insert

    'and the time for making such payment may be postponed by agreement between the enforcement authority and the excepted joint owner.'.

The clause allows ''Agreements about associated and joint property'' to be reached by the enforcement authority and the person who holds the associated property or is the excepted joint owner. It is a sensible

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provision designed to enable the parties to make agreements. I was a little puzzled by subsection (1)(b), which states:

    ''the recovery order may, instead of vesting the recoverable property in the trustee for civil recovery, require the person who holds the associated property or who is the excepted joint owner to make a payment to the trustee.''

That provides an opportunity for the person holding the associated property to buy out the trustee's share to pay that money back. However, there did not seem to be a provision whereby the deadline for making that payment could be postponed by agreement. I emphasise the words ''by agreement''—it would have to be with the enforcement authority's consent.

Clause 276 deals with consent orders. Those may allow for a recovery order to be made on terms by the parties, and allow for postponement to take place at that point, but I am not sure that that is the case. The Under-Secretary has made it clear that the enforcement authority wishes to recover the money. However, if it believed that somebody in possession of associated property was bona fide, one would expect it to be willing to come to arrangements to allow for payments by instalments, or for payment to be postponed. It seemed that the amendment might allow us to discuss that issue. The Inland Revenue sometimes allows postponement, even when dealing with someone who has not paid his tax, and as a matter of fairness and common sense, when dealing with a potentially innocent party, postponement should be possible. Should we not spell that out explicitly in the Bill? I am mindful that the Under-Secretary may tell me that that is provided for elsewhere in the Bill. However, given that we are dealing with agreements between the parties to resolve the issue, should that not be provided for in this clause?

Mr. Ainsworth: Clause 271 provides for a recovery order to give effect to an agreement reached by the enforcement authority and the holder of associated property or an excepted joint owner. Such an agreement would allow the holder or the owner to agree to pay the trustee for civil recovery a sum in order to buy out the enforcement authority's interest in recoverable parts of the property. That would be subject to the approval of the court. In those circumstances, the clause provides that a recovery order may require the person who holds the property, or who is the excepted joint owner, to make the payment to the trustee.

The amendment would amplify the existing provision so that, in the case of an excepted joint owner, the recovery order could, if the enforcement and the excepted joint owner agreed, allow for the making of the payment to be postponed. The amendment seeks to make provision only in relation to the excepted joint owner and not to the holder of associated property. I appreciate that in some cases it may be difficult for an excepted joint owner immediately to lay his hands on sufficient money to buy out the enforcement authority's interest in the recoverable property. However, the amendment is not

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needed to ensure that an equitable arrangement can be reached when the enforcement authority, and the holder of the non-recoverable property, agree.

The Bill does not specify when the payment to the trustee should be made. A recovery order could specify a delayed date for payment, if both parties agree on it— which is the point made by the hon. Member for Beaconsfield. Alternatively, if no such provision were made in the recovery order, the trustee who acts on behalf of the enforcement authority would be able to ensure that any agreement that was acceptable to both parties was given effect. That degree of flexibility will give the excepted joint owner sufficient time to arrange finance to buy the director's share of the property—for example, to arrange for a mortgage to purchase the remainder of the property that is deemed to be recoverable. I am saying not that that is provided elsewhere but that the amendment is unnecessary. Such agreements are perfectly possible, and it is unnecessary to spell that out in the Bill to ensure that they can be made when both parties agree. With that assurance, I ask the hon. Gentleman to withdraw the amendment.

Mr. Grieve: Happily. So many provisions in the Bill have a mandatory flavour, tying down and trying to constrain every avenue through which exemptions may be given or exceptions made, that a short discussion on this matter seemed worth while. The Minister has reassured me, and I dare say that in the event of a future dispute on the subject someone could wave around the report of our proceedings as evidence of what he intended. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Ainsworth: I beg to move amendment No. 312, in page 156, line 16, after 'tenancy', insert 'and

    (b) the enforcement authority agrees that the person has suffered loss as a result of the interim receiving order or interim administration order'.

The Chairman: With this it will be convenient to take Government amendments Nos. 313 and 314.

Mr. Ainsworth: I had intended to say that these amendments were minor, but the hon. Member for Beaconsfield is so distrustful of my intentions that I had better not.

The amendments make minor changes to the compensation provisions in clauses 271 and 272 with a view to achieving fairness and consistency. Clauses 271 and 272 specify the arrangements that will apply when associated property or property held by an excepted joint owner is the subject of a recovery order. If an interim receiving or administration order has been applied at any time to the property, the arrangements allow for a payment to be made in respect of the property in order to compensate the person who holds the property for any losses suffered as a result of the order.

That is currently given effect in the Bill as follows. Under clause 271, when agreement is reached between

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the enforcement authority and the associated property holder or excepted joint owner, the person may make a payment to the trustee in lieu of the recoverable property. That payment may be reduced by an agreed amount to reflect any losses suffered in respect of the associated property or joint tenancy.

Under clause 272, in the event of no agreement, the court may order the trustee to make a payment to the associated property holder or excepted joint owner. The order may require the enforcement authority to pay compensation for any losses suffered in respect of the associated property or joint tenancy.

Amendments Nos. 312 and 313 restructure subsection (4) of clause 271. Amendment No. 312 will make it explicit that a reduction in the amount to be paid by the trustee will be made only if the enforcement authority agrees that the person has suffered loss as a result of the interim receiving order or administration order. That is implicit in the current provision, but it is made explicit by the restructuring.

Amendment No. 313 represents the change of substance to the provision and brings it into line with the general compensation provisions in clause 282. Amendment No. 314 does the same for clause 272.

Clause 282(8) provides for the amount of compensation to be at the court's discretion and to have regard to the losses suffered and any other relevant circumstances. Clauses 271 and 272 do not currently include a provision allowing any relevant circumstances to be taken into account. Without that, only the loss suffered could be taken into account in calculating a reduction under clause 271 or the amount to be paid under clause 272. If the person involved has himself contributed to the losses through, for example, delays, that may be taken into account under clause 282, but not under clause 271 or clause 272.

We believe that it should be possible to take such circumstances into account in deciding what payment is to be made in respect of the property under clauses 271 and 272. Government amendments Nos. 313 and 314 will allow ''any ... relevant circumstances'' to be taken into account.

Mr. Grieve: I reassure the Minister that I shall not oppose his amendments. It is noteworthy that, like virtually all his amendments, they tighten up the Bill. As he explained, these amendments boil down to enabling the court to look further than simple financial loss, and towards the conduct of the party concerned. That is reasonable. However, I shall rejoice when he introduces amendments that shift the balance away from the enforcement authority toward individuals' rights. I dare say that that will happen in the new year.

Amendment agreed to.

Amendment made: No. 313, in page 156, line 18, leave out from 'to' to end of line 19 and insert

    'that loss and to any other relevant circumstances'.—[Mr. Bob Ainsworth.]

Clause 271, as amended, ordered to stand part of the Bill.

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Clause 272

Associated and joint property: default of agreement

Mr. Grieve

: I beg to move amendment No. 402, in page 156, line 45, after 'regard', insert 'principally'.

The Chairman: With this it will be convenient to take amendment No. 403, in page 157, line 4, at end insert 'and thereafter to'.

Mr. Grieve: Here I am again, rowing in the other direction, rather hopelessly, against the Minister's far greater power. With this amendment, I propose to shift the balance in favour of the person who holds the associated property when the issue must be decided in default of agreement.

The amendments , which would affect subsection (4), would provide that

    ''the court must have regard principally to...the rights of any person who holds the associated property or who is an excepted joint owner and the value to him of that property or, as the case may be, of his share (including any value which cannot be assessed in terms of money), and thereafter ''

to consider

    ''the enforcement authority's interest in receiving the realised proceeds of the recoverable property.''

I emphasise to the Minister—because although we have discussed this before, it is worth repeating—that the basis for doing that is that the funds or money that the enforcement authority will try to recover are not necessarily attributable to a victim. They will not necessarily have been obtained from another person. They are likely to be the fruits of an illegal transaction, but the transaction may not have had a victim. If a person is willing and foolish enough to spend a lot of money buying cocaine in the marketplace, the transaction would be illegal and the individual who received the money would be unfairly and improperly enriched. However, there would be no monetary victim.

The clause deals with people who may, further down the road, have innocently acquired assets resulting from the unlawful transaction. In such circumstances, when considering the recovery, the balance should be in favour of the rights of the person who holds the associated property. His position should be considered before that of the state as the enforcement authority.

The clause should strike a balance. The question is where the court should look first. My view is that the position of the innocent individual who holds the associated property should be considered first. That is because we are not necessarily dealing with assets that are owed to or returnable to an individual.

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