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Section 22 POCA 2002.  Is it just in lockdown?

In recent years there has been a huge rise in the number of Section 22 applications, which seek to increase the available amount in Confiscation Orders.

It can be argued by your solicitors that an application under section 22 of the Proceeds of Crime Act, is unjust contrary to s.22(4)(a), which states that ‘the court may vary the order by substituting for the amount required to be paid such amount as it believes is just’

POCA gives the Court broad discretionary powers to determine whether the s22 application is just, and whilst there is some guidance in a handful of reported cases, it is clear that applications are case-specific and therefore considered on a case by case basis.

Notwithstanding this, what is very apparent from cases such as Padda[1], is that when considering an application for a variation of the available amount, the Court must consider factors which include:

  1. The amount outstanding
  2. The amount which might now be available
  3. The length of time since the original Order was made
  4. The impact on the defendant
  5. Any other consideration which might properly be thought to affect the justice of the case

It is important to point out that Section 22 applications do not always concern assets which have been hidden, or where the defendant has received a significant windfall. Common applications that are seen by us concern assets, acquired completely legitimately, many years after the Confiscation Order was made. Such examples include equity in the family home, savings, pension funds, and vehicles.

Impact of Corona Virus

Due to the impact of the current COVID-19 pandemic and the uncertainty that we face in the many months after lockdown, it is important that ongoing and new s22 applications are revisited by your solicitor.  The consideration of what is’just’ could have damming effects on your family and your livelihood.

The Court’s capacity to deal with S22 applications has been significantly reduced by the current crisis, with many Court’s closed, and others dealing only with the most urgent cases. In the meantime, your assets are restrained and your bank accounts frozen and defendants are unable to get on with their day-to-day life.

Restraint Orders cannot be imposed indefinitely, and this, therefore, begs the question as to whether any new applications can be justified, when it is not known, realistically, how long it will take for the matter to be brought before the Court?

Further to this, a vast amount of the population has been impacted financially by the pandemic. Whether it be that an individual has been made redundant, furloughed and receiving a reduced income, or is self-employed and has lost revenue. We are all in the dark as to the lasting effects the COVID-19 crisis will have on the economy and employment.  So, with all this uncertainty, can it be said that a s.22 application, to confiscate savings which could be used to provide financial security, be just?

In addition, it is increasingly common for family homes to be the subject of s22 applications. Quite often, property is a very valuable asset to the defendant, not in monetary terms, but because it provides a home for their family.  A defendant can find alternative means by which to satisfy the order and in subsequent years, the property may increase in value.  The Prosecution then seeks to identify this as an asset which would enable the defendant to make further contributions towards the order.

Given social distancing guidelines and the economic uncertainty, with many banks now not providing mortgage offers, the property market is expected to slow. Is it ‘just’ to force a defendant to sell a property in circumstances where their prospects of achieving a sale are limited?

It should be pointed out also, that upon the Confiscation Order being varied, the defendant will be given a period of time to make payment. The legislation allows a maximum of 6 months in which to pay, after which time the amount is subject to interest, and the defendant risks a default sentence in prison.

It is a realistic prospect, therefore, that upon variation of the order, the defendant will be left in an inevitable position where they are liable for interest on the value of the Confiscation Order, or worse still, face the prospects of serving further time in prison, because through no fault of their own, they have been unable to find a buyer.

Get the help you need

Section 22 applications have the prospect to be influenced by the current circumstances, and it is now more important than ever that defendants, subject to such applications, are properly represented.

If you need advice or assistance in relation to a Section 22 application, contact Cohen Cramer.

[1] R v Padda [2014] 1 WLR 1920

 

 

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