If you’ve been found guilty of committing a crime such as fraud, money laundering, or corruption, you might be given a confiscation order. That means that the authorities will seize some of your money and / or assets.

The amount of assets or money that the authority seizes is based on the ‘benefit figure,’ or how much you have benefitted financially from the crime you committed.

In theory, you can see that this makes sense. If a person has come into money or assets through illegal means, the law should then deprive them of those benefits. However, there’s a problem with the calculation in practice.

Usually, it’s quite hard to work out exactly what the financial benefit of the illegal activities is. That ends up with some defendants paying too much in the ‘benefit figure,’ and more of their assets being confiscated than may be appropriate for the crime they committed.

Problems with the benefit figure

Technically, the benefit figure is the property obtained by the defendant as a result of, or in connection with his or her criminal conduct. But that definition is very wide.

It’s led to controversial and inconsistent decisions, and some defendants being asked to pay thousands more in the first instance. With a good solicitor on your side, we can often find ways to reduce the amount you’re ordered to pay.

For example, a defendant may have put £10,000 of tainted money into a house deposit for a house worth £250,000. The rest could have been borrowed legitimately. There’s a question then of whether the benefit figure is £250,000 for the entire house, or £10,000 for just the deposit. We would say that the defendant did not get the house as a result of the criminal activity. They just got the £10,000. So the benefit figure is £10,000 and not £250,000.

It can be difficult to work out the benefit figure if it’s a complex criminal enterprise that has been ongoing for a number of years. The figure will depend on the involvement of a particular individual, and the nature of the crime they committed.

And what happens if the value of the assets fluctuates? Do you take the figure as the original price? Or the value as it is today?

There are many grey areas in this calculation.

Division between multiple defendants

Another complicating factor is when there are multiple defendants.

There are a few different approaches to this.

Either, the court divides the proceeds by the number of defendants and orders each defendant to pay the same amount. Or, the defendants come to an agreement about apportionment.  

Coming to an agreement about apportionment can be tricky, and you probably need a solicitor on side to get the best deal.

Sometimes, the defendants are ordered to pay separate confiscation orders for the same thing. For example, if one person steals a painting, he may get a confiscation order for the value of the painting. If he sells it on, the buyer will also get a confiscation order for the value of the painting.

Who ends up paying it?

Over the years, there has been a difference between the sums which are ordered to be paid, and the payments which are actually made. Often the defendant cannot pay the sum that is ordered.

If a defendant doesn’t pay, then they are given a prison sentence.  To give an idea of the length of the sentence, an unpaid amount between £20,000 and £50,000 usually leads to an 18-month default prison sentence.

For the authorities to pursue confiscation proceedings, they have to show that it is in the public interest. That means that they balance the likelihood of recovering the proceeds of the crime, with the fact that court proceedings themselves are lengthy and expensive. It’s often not worth running the case if the sum to be recovered is likely to be small.

What to do if you’ve been ordered to pay a confiscation order

When they are working out how much to confiscate, the court looks at two figures; (1) the benefit figure, and (2) the available asset figure.

The benefit figure is usually worked out through forensic accounting. It often involves investigation by HMRC or the Financial Conduct Authority.

When you work with a solicitor, we can instruct forensic accountants on your behalf, to check, or challenge the figure put forward by the Crown Prosecution Service.

The “available asset” figure is the amount of assets that a defendant has which can be sold to make payment under the order. We can look at the assets you own and work out what this figure should be.

All in all, the order must be proportionate, and not be oppressive. We’ll argue your case on proportionality so that you don’t end up paying over the odds.

If you’ve been ordered to pay a confiscation order, you should instruct a solicitor as soon as possible. We’ll represent you at interviews with the police, and put together a defence for you to minimise the amount you’ve been ordered to pay.

Contact Harewood Law today.

0333 3448377 | info@harewoodlaw.com