Proceeds of Crime Bill

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Mr. Ainsworth: The Minister is certainly not prepared to give such a commitment, because he fears that if he unravels all this he will create so many problems that will jump up in so many different parts of the Bill. I hope that my hon. Friend the Member for Wellingborough and the hon. Member for Beaconsfield will accept that. Given the explanation of the need for those two separate terms, and the acceptance that this is a fiendishly difficult matter to define and draft, I assure the Committee that if we can make it clearer, we will be happy to pick up those suggestions and do so. However, I cannot make a commitment here and now to make an alteration to a complicated part of the Bill when the consequences of doing so are not clear. I ask the hon. Gentleman to withdraw the amendment.

Mr. Grieve: I shall be happy to withdraw the amendment. The Minister has provided a clear explanation. At the risk of repetition, I must emphasise the fact that the problem lies in clause 278(1)(b), which the Minister said defined related property. However, when one reads it, it does not. It merely says that

    ''original property and items of property which represent the original property are related to each other.''

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A definitions clause is needed for related property. Something that is murky and almost impossible to see through would thereby at least start to become opaque.

Mr. Ainsworth: We shall consider that in the fullness of time.

Mr. Grieve: I am obliged. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 278 ordered to stand part of the Bill.

Clause 279

Applying realised proceeds

Mr. Bob Ainsworth: I beg to move amendment No. 318, in page 161, line 41, at end insert

    'or which he obtained in pursuance of a recovery order'.

The Chairman: With this it will be convenient to take Government amendments Nos. 319 and 320.

Mr. Ainsworth: The amendments are technical amendments to clause 279, which provides for what the trustee will do with sums that are in his hands as a result of his functions under the Bill. The amendments are intended to ensure that clause 279 refers to all of the circumstances in which money may be obtained by the trustee for civil recovery.

As currently drafted, the clause applies to sums representing the realisable proceeds of property vested in the trustee by a recovery order, and sums directly vested in him by a recovery order. It also applies to the payment made to him following an agreement between the enforcement authority and the owner of associated property or an excepted joint owner under clause 271, and to the payment made to him in respect of rights under a pension scheme under clause 273. When recovery orders are made by consent under clause 276, we envisage that when a trustee is involved it will frequently be the case that the property or money in question can be paid over immediately, and that that can be provided for by the recovery order. However, a recovery order made by consent may need to make provision for the future transfer of property or money. Clause 279 needs to be drafted sufficiently widely to cover that.

The amendments therefore have the following effect. Subsection (1)(a) covers the sums that represent the realised proceeds of property vested in the trustee by a recovery order. Amendment No. 318 extends that to cover the realisable proceeds that the trustee has obtained in pursuance of the recovery order, but which have not been vested in him by a recovery order. That will cover property that the respondent agrees to transfer to the trustee under a recovery order made by consent, but is not vested in the trustee—that is, transferred to him by order.

Amendment agreed to.

Amendments made: No. 319, in page 161, line 42, at end insert

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    'or obtained by him in pursuance of a recovery order'.

No. 320, in page 161, leave out line 43.—[Mr. Bob Ainsworth.]

Clause 279, as amended, order to stand part of the Bill.

Clause 279, as amended, ordered to stand part of the Bill.

Clause 280

Victims of theft, etc.

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

6.45 pm

Norman Baker: I seek clarification from the Minister about subsection (3)(b), particularly about the force behind the word ''immediately''. It is an interesting word to insert in the clause. Will the hon. Gentleman explain what it means? It seems that the intention is to protect someone who portrays himself or herself as a victim of crime. Obviously, it will be possible for property to be disposed of prior to a period that may be declared as ''immediately'', yet, in being so disposed of, not seek to make clear at that point what knowledge was in the mind of the person who was disposing of the property. I hope that I have put my point lucidly; the matter is complicated. Is not the word ''immediately'' redundant? Is it not unnecessarily limiting?

Mr. Ainsworth: I shall try to pick up on the hon. Gentleman's point. Property that the person was deprived of must not have been recoverable property immediately before he was deprived of it. A declaration should not benefit someone who has stolen the property from its original owner but who, in turn, has had that property stolen from him. The property may have been transferred several times, but it is the immediate preceding situation that applies.

Question put and agreed to.

Clause 280 ordered to stand part of the Bill.

Clause 281

Other exemptions

Mr. Grieve: I beg to move amendment No. 399, in

page 162, line 22, leave out subsections (1), (2) and (3).

Who are the categories of individuals in respect of whom it is envisaged that the Secretary of State or the Scottish Ministers may say that recovery should not take place? The measure is clearly in the Bill for a purpose. Surely, on the whole, justice is not about administrative convenience. Who are the categories of individuals from whom it is thought that the Secretary of State may designate that no recovery should occur?

Mr. Bob Ainsworth: The civil recovery scheme has been constructed on the basis that, in general, there should be no exemptions from civil recovery proceedings, other than those set out under clause 306. In many cases, when a person holds recoverable property, it will not be appropriate to bring civil

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recovery proceedings. However, instead of trying to set out a comprehensive list of those cases, which would be impossible, the intention is to rely on the enforcement authority's discretion about against whom it brings proceedings.

Both the director and Scottish Ministers are public bodies for the purposes of the Human Rights Act 1998. They must therefore act proportionately in deciding which cases to bring. In addition, the director is under a duty—as we have discussed earlier—to act efficiently and effectively. There is, however, a small category of cases in which it is felt that there is compelling evidence for an exemption from civil recovery proceedings. That clause sets out those exemptions. We arrived at such exemptions after consultation with other Departments and relevant bodies.

One of the main exemptions is with regard to the Financial Services Authority as it is possible that it will hold recoverable property after it has, for example, levied a fine on a company engaged in market abuse. As one of the statutory objectives of the FSA is to reduce financial crime, it would be counter-productive to bring proceedings against that body. Although the consultation was extensive, it is possible that new circumstances may arise in future when there is a compelling case for an exemption and when relying on the enforcement authority's discretion is not sufficient. That is why we have included the order-making power. It will be subject to affirmative procedure if it is used, and I hope that that reassures the hon. Member for Beaconsfield. I hope that I have reassured him that that power should be held in reserve.

Mr. Grieve: The Minister understands my slight concern. It is often administratively convenient for Departments to interfere with the ordinary course of justice. We are setting up a judicial process, and we have suddenly discovered exemptions in the clause that might be simply for administrative convenience. The reassurance on affirmative resolution is helpful. I am not sure that I wholly agree that the FSA should hold money that proceeds from unlawful conduct. As a philosophical issue, I do not understand why it should not hand that over, although it might be argued that that would be robbing Peter to pay Paul.

The Minister has provided an explanation, and I did not previously feel that I had one. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 281 ordered to stand part of the Bill.

Clause 282


Mr. Grieve: I beg to move amendment No. 400, in page 163, line 16, at end insert—

    ''(1A)If any other person has suffered loss or damage as a result of an interim receiver or interim administrator dealing with his property in the reasonable but mistaken belief that he was entitled to do so in pursuance of an interim receiving order or interim administration order, such person may apply to the court for compensation.''

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The amendment returns us to last week's debate on the position of a person who suffers loss and damage as a result of the interim receiver or administrator. If that person could not show that the receiver or administrator had been negligent, he would not have a right of recovery. The Minister may remember that debate, and I said during the proceedings that I felt gently in my mind that I had an amendment coming on. The amendment would enable such a person to be included in the compensation categories. I do not want to repeat the arguments that I deployed at length last week, which expressed my concern that such a person was not covered.

The state, and Parliament, can set up a system that may lead to an individual's being innocently caught up in the receivership process, and suffering loss. The receiver may have acted perfectly reasonably but accepts that he has made a mistake. He inadvertently interfered with the property of an innocent person, causing him loss. My view is that such a person should be included in the compensation framework and should be able to claim compensation like the other individuals who are able to under the clause. The amendment would allow that to happen, and I commend it to the Committee.

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