Proceeds of Crime Bill

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Mr. Ainsworth: I beg to move amendment No. 334, in page 172, line 29, leave out subsection (6).

This is a drafting amendment. On reflection, it is clear that subsection (6) is unnecessary. If the court considers that cash is not recoverable property, it cannot forfeit it under subsection (2) and must, therefore, release it. Amendment No. 334 deletes a redundant provision.

Amendment agreed to.

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

Norman Baker (Lewes): Subsection (1)(b) relates to forfeiture in Scotland. I understand that the procurator fiscal detains the cash under clause 294, and Scottish Ministers can then order forfeiture of the money. Why are the two handled separately? Why do Scottish Ministers not undertake both detention and forfeiture of cash?

Mr. Ainsworth: There needs to be some co-ordination. It is no good the hon. Gentleman turning

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up late on a Thursday afternoon and trying to replace the hon. Member for Orkney and Shetland (Mr. Carmichael). I am being unfair.

In the first instance, there is always the question of criminal pursuit, so that is obviously an issue. I do not wish to go over what we discussed this morning. The procurator fiscal is involved because criminal pursuit is possible. We need to amend the Bill, which was accepted when we considered the matter this morning. I intend to do that to provide that when the procurator fiscal has dropped out of proceedings because the chance of criminal pursuit has been considered and does not apply, Scottish Ministers should deal with a subsequent case because it would be a civil matter. We discussed that in greater detail this morning. I am sorry that the hon. Gentleman could not be present, but that is the reason why two sets of people are involved.

Norman Baker: I am grateful to the Minister and wish him a happy new year also. I discussed the matter with my hon. Friend the Member for Orkney and Shetland, who attended this morning's sitting. He was unhappy with the explanation that was given and asked me to pursue the point this afternoon. There is co-ordination among members of the Committee.

I am sure that if I had raised a point that was out of order, you, Mr. McWilliam, would have told me so.

2.45 pm

The Chairman: Order. The point was not out of order. I am advised that the matter was discussed at length this morning, so should not be discussed again. I am sorry that the hon. Member for Lewes (Norman Baker) could not be present this morning, but that does not excuse him from raising a matter that was discussed at length.

Question put and agreed to.

Clause 297, as amended, ordered to stand part of the Bill.

Clauses 298 and 299 ordered to stand part of the Bill.

Clause 300


Mr. Ainsworth: I beg to move amendment No. 335, in page 173, line 20, leave out subsections (2) and (3) and insert—

    '(1A) If, for any period after the initial detention of the cash for 48 hours, the cash was not held in an interest-bearing account while detained, the court or sheriff may order an amount of compensation to be paid to the applicant.

    (1B) The amount of compensation to be paid under subsection (1A) is the amount the court or sheriff thinks would have been earned in interest in the period in question if the cash had been held in an interest-bearing account.

    (1C) If the court or sheriff is satisfied that, taking account of any interest to be paid under section 295 or any amount to be paid under subsection (1A), the applicant has suffered loss as a result of the detention of the cash and that the circumstances are exceptional, the court or sheriff may order compensation (or additional compensation) to be paid to him.

    (1D) The amount of compensation to be paid under subsection (1C) is the amount the court or sheriff thinks reasonable, having regard to the loss suffered and any other relevant circumstances'.

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The Chairman: With this it will be convenient to take amendment No. 420, in page 173, line 21, leave out 'exceptional' and insert

    'such that the court or sheriff considers them reasonable'.

Mr. Ainsworth: Amendment No. 335 will ensure that the court has discretion to pay compensation in lieu of interest when cash is not paid into an interest-bearing account under clause 295. In most cases cash will be paid into such an account, but there are circumstances in which it will not, for example, if the physical cash is required as evidence in criminal proceedings. In such circumstances, the safeguard of the interest-bearing account that provides financial recompense would be lost.

Subsection (1B) of the amendment provides that the amount of compensation to be paid in such circumstances is the amount of interest that the court considers would have been earned if the cash were paid into an interest-bearing account. Subsections (1C) and (1D) make consequential amendments to clause 300 to take subsections (1A) and (1B) into account. Clause 300 already makes provision for compensation to be paid over and above interest payments in exceptional circumstances. Subsections (1C) and (1D) extend that to allow compensation to be paid over and above the money paid in lieu of interest under subsections (1A) and (1B) in exceptional circumstances. Additional compensation will be awarded in only exceptional circumstances because, in most cases, the accrued interest or sum equivalent to such interest should be sufficient compensation.

An example of a case in which additional compensation might be awarded under subsection (1C) would be one in which the claimant satisfied the court that the detention of the cash had prevented him from concluding a business deal and that the deal would have earned him a sum exceeding that earned through interest. If the court is satisfied by the facts, it might be reasonable to consider those to be exceptional circumstances, particularly if the person concerned was not wealthy. That is only an illustration. In every case, the court will decide based on the circumstances. The same approach to compensation was taken in paragraph 10 of schedule 1 to the Anti-terrorism, Crime and Security Act 2001, which received Royal Assent before Christmas.

Amendment No. 420 would lessen the test that the court must apply when an application for compensation is made. That test would then be whether the court or sheriff were satisfied that loss was suffered as a result of the detention and whether the court or sheriff considered the circumstances reasonable. For compensation for a sum greater than the amount of interest that would have accrued, the test is that loss has been suffered and that the circumstances are exceptional.

Government amendment No. 335 would amplify the original compensation provisions in clause 300. Under the revised clause, it is made clear that if the cash is not held in an interest-bearing bank account during its detention, the amount of compensation will be the interest that would have been paid had the money been held in such an account. The general

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principle is that the payment of interest should be sufficient compensation.

Mr. Grieve: In most cases, the payment of the interest is likely to be sufficient, but in some circumstances, the person concerned may be able to show that the money would have been used in a particular way, and that a loss has therefore occurred. Does that fall into the ''exceptional'' category? It would be helpful if the Minister could tell us what the word ''exceptional'' means, because it is on that issue, and the anxiety that ''exceptional'' may be too high a test, that amendment No. 420 hangs.

Mr. Ainsworth: I do not think that I can spell that out. People will have to make the case that exceptional circumstances apply. The hon. Gentleman is right to say that such a case may be made if the money would have been used to realise profits far greater than the interest that would accrue from a bank account. The court should consider those circumstances, and we have made provision for that. We are talking about cash and items that are transferable for cash. We believe that, in the overwhelming majority of cases, interest alone will be the appropriate compensation, but the court should be allowed to hear such a case.

Mr. Davidson: Will the Minister clarify what would happen if someone swore blind that they were heading to the bookies to put £25,000 or £500,000 at odds of 20 to one on a horse that subsequently won? Are those exceptional circumstances? If someone alleges that they were about to make a transaction that would have resulted in substantial profit, would that be accepted? We must watch that we do not open the door to conspiracies against the public purse.

Mr. Ainsworth: My hon. Friend makes a fair point. That would be a matter for the court to decide. If the court considered the case once the horse had already won, it would be difficult for the person to prove their intentions for the cash.

In some circumstances, the person may be able to persuade the court—and witnesses may be able to assist him in this—that he was on his way to conduct a transaction that would have made a substantial profit. If he could prove that, it would be only right for the court to consider the loss imposed on him. Such a person would have had his cash detained, although he was going about his lawful business. I know that my hon. Friend thinks that people who wander around his constituency or elsewhere with large amounts of cash are strange, but strangeness is not grounds for bringing proceedings. Therefore, if the person can show the court that he had such an opportunity and that the unfair activities of the customs officer or the constable deprived him of profit, surely it is only right that the court should be allowed to consider the matter.

Mr. Davidson: I assure the Minister that if a person in my constituency—and in other areas of Glasgow—were able to wander around with substantial amounts of money in their pocket, it would not be difficult for him to produce witnesses who would say that he was about to undertake a deal that was going to make him

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a huge amount of profit. Does not my hon. Friend recognise that there are substantial dangers in the Government's action? I accept that there are problems for a person who has had his money seized, but we must be careful not to leave the door open to abusive claims.

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