The Home Office Response on Civil Recovery
PROCEEDINGS FOR CIVIL RECOVERY AS A 'CRIMINAL CHARGE'
17. The Government takes issue with our view that
the civil recovery procedure would be likely to be treated as
giving rise to a criminal charge, thus importing the right to
be presumed innocent until proved guilty and the right to legal
representation under ECHR Article 6(3), as well as activating
the right to be free of retrospective penalties under ECHR Article
7. The reasons for the Government's view that the civil recovery
regime would fall to be treated as civil rather than criminal
for the purposes of the ECHR are helpfully set out.
We accept that this is an area of law in which the application
of established principles to particular facts is sometimes difficult.
None the less, in view of the centrality of the issue to the human
rights compatibility of the proposed new civil recovery regime,
we think it may be useful for us to put on record our reservations
about the Government's argument.
18. The Government accepts
that, as we explained in our Third Report,
there are three relevant factors, none of which is decisive
- the classification of the issue in domestic
- the essential nature of the proceedings or
'offence', as a matter of substance rather than form;
- the nature and severity of the 'penalty'.
The Government prefaces its discussion of these factors
it is important to bear in mind the purpose of civil
recovery, namely to establish as a matter of civil law that there
is no right to enjoy property that derives from criminal conduct.
This applies no matter who committed the conduct; the focus is
on the property, not the person.
This comment sets the tone for the Government's argument
as a whole.
19. We consider that it is mistaken. We start from
the position that, as a matter of domestic law (apart from the
new provisions contained in the Bill) there is no general principle
that prevents everyone in the world from asserting a right to
enjoy property merely because it derives, directly or indirectly,
from criminal conduct. On the contrary: the general position is
that people are entitled to enjoy the property which is in their
possession, unless and until someone with better title to it lays
claim to it. An attempt by the Government to establish a legal
claim to property merely on the ground that it derived from criminal
conduct was only recently rejected by the House of Lords in Attorney-General
v. Blake (Jonathan Cape Ltd., third party).
That is why special legislation is needed in order to give power
to recover proceeds of crime. To claim that the proposed civil
recovery regime is concerned only with the property, and not with
the conduct of any specific person in relation to it, highlights
the human rights problems to which, we think, the proposals give
rise; it does not help to justify the result.
20. Turning to the three relevant factors, the first
is classification as a matter of domestic law. If domestic law
classifies a matter as criminal, it will be treated by the European
Court of Human Rights as criminal under the ECHR, automatically
attracting all the safeguards accorded to defendants in criminal
proceedings. If domestic law classifies the proceedings as civil,
that carries relatively little weight under the ECHR. The reason
is that giving domestic classification any real weight would make
it too easy for a State to deprive people of the protection of
appropriate standards of criminal procedure, merely by re-classifying
matters as civil. We are therefore not swayed by the decision
in the Bill to characterize the proposed new regime as civil.
21. The second factor is the substance of the proceedings.
Here, the Government suggests that criminal conduct has relatively
little relevance in civil recovery proceedings, because they do
not lead to a conviction or sentence in criminal courts, the person
in possession of property cannot be detained, and the proceedings
may be brought against someone who is wholly innocent of any wrongdoing
but merely happens to be in possession of property derived from
crime. We recognize
that these considerations carry some weight. However, their weight
is lessened by the facts that the recovered property goes to the
state, and is not used to compensate victims; that it is recoverable
merely because it derives from crime, not because anyone was unlawfully
deprived of the property in the first place; and that (as the
Government has said before) one of the main purposes of the civil
recovery process will be to deprive of the benefits of crime those
people who are thought to have committed crimes, but whom it has
proved impracticable to charge or convict.
In our view, these factors indicate that the proceedings are intended
to be both deterrent and punitive, and they counterbalance the
considerations on which the Government relies.
22. The third factor is the nature and severity of
the 'penalty'. This criterion looks to the effect or impact of
the measure: even if it is not designed to deter and punish, is
it so severe in its impact on the person against whom the order
is made as to make it punitive? The test ensures that the full
procedural safeguards of Article 6(2) and (3) apply to prevent
a breach of the principle of nulla poena sine culpa (nobody
should suffer a penalty who is not at shown to be at fault), a
principle enshrined in the ECHR, EC law and European written constitutions,
as well as in English criminal law, tort law, and public law.
The Government claims that the recovery of property is preventative
and reparative, not penal. It is said to be preventative because
it takes out of circulation property which might otherwise be
used to fund crime,
and reparative because it is 'akin to the right of a victim to
recover in civil proceedings property which the victim has been
deprived of by unlawful conduct...'
Both the adequacy of these claims as a guide to the nature and
severity of the penalty, and their accuracy, are questionable.
With regard to the nature and severity of the penalty, neither
assertion addresses the severity of the impact of civil recovery
on the person in possession of the property. This is important,
in the light of the purpose of ECHR Article 6 and of the Government's
acceptance that the person against whom proceedings are brought
might not be implicated in the offence from which the property
is alleged to derive.
23. In respect of the accuracy of the statements,
we note, first, that there is nothing in the Bill requiring the
effect of the order on the funding of other crime to be taken
into account by the courts (as opposed to the Director of the
Asset Recovery Agency) when deciding whether to accede to an application
for civil recovery. Secondly, we do not accept that the procedure
can properly be regarded as reparative. As already noted, none
of the money recovered would go to victims of crime, and as a
matter of current law the Government has no restitutionary right
to recover property merely on account of the fact that it derives
from crime. We have argued above that it is as at least as strongly
arguable that the essential nature of the penalty is penal as
that it is civil. It seems to us that the nature and severity
of the penalty point in the same direction. The punitive element
appears to us to be particularly strong in cases (which are likely
to be common) where the respondent to the proceedings, who holds
the property, is suspected of having been personally responsible
for the offence from which the property was derived, especially
if that person has not been convicted of and sentenced for the
offence; but the severity of the impact on the defendant will
be no less where he or she is not implicated in any criminal activity.
24. Taking all these matters into account, we
consider that the Government's confidence that the civil recovery
process would be treated as civil, rather than criminal, for ECHR
purposes is not justified. We do not think that the matter
is concluded either way by existing case-law from either the European
Court and Commission of Human Rights or domestic courts.
We draw this conclusion to the attention of each House.
It has implications for the discussion which follows.
AVAILABILITY OF FUNDS TO DEFEND CIVIL RECOVERY PROCEEDINGS
AND ECHR ARTICLE 6(3)
25. Rights under Article 6(3) include the right to
defend oneself through legal assistance of one's own choosing.
The rights under Article 6(3) apply only to people charged with
criminal offences. Consistently with their view on the proper
classification of the civil recovery scheme, considered above,
the Government believes that the civil recovery scheme would be
unlikely to engage these rights.
For reasons which we have already developed, we disagree. However,
the Government also makes it clear that, in any case, it expects
that publicly funded legal aid would be available.
We consider that this satisfactorily answers our concern on
CIVIL RECOVERY PROCEEDINGS AND RETROSPECTIVITY UNDER
ECHR ARTICLE 7
26. In accordance with its view on the classification
of civil recovery proceedings, the Government considers that they
are not proceedings for a criminal offence or a penalty, and so
do not engage the right to be free of retrospective penalties
under ECHR Article 7. For reasons which we have already developed,
we disagree. The Government accepts that, if it is wrong on the
classification issue, the civil recovery provisions would violate
ECHR Article 7 because of their retrospective operation.
We draw this matter to the attention of each House.
24 Memorandum, paras 22-37 Back
Memorandum, para. 25 Back
Third Report, para. 33 Back
Memorandum, para. 24 Back
 4 All ER 385, HL Back
Memorandum, paras. 27 and 28 Back
See our Third Report, para 5 Back
Memorandum, para 3 Back
Memorandum, para 32 Back
We note the Government's view, contained in note 6 to para. 35
of its Memorandum, that United Kingdom decisions, treating as
criminal for ECHR Art. 6 purposes certain procedures which were
normally regarded as civil in domestic law, are 'clearly distinguishable'
from the civil recovery scheme, although the Government provided
no argument to support that claim, which we regard as questionable Back
Memorandum, para 37 Back
Memorandum, paras 38-39 Back
The Government points out in para. 42 of the Memorandum, and
we draw to the attention of each House, that we were wrong to
suggest, in para. 40 of our Third Report, that there would be
no limitation period for civil recovery proceedings. In fact,
clause 287 of the Bill would insert a new section 27A in the Limitation
Act 1980, providing for a twelve-year limitation in civil recovery