Glatt, R. v

Under the unamended confiscation regime in Part VI of the Criminal Justice Act 1988, a person may obtain criminal property although he has no beneficial interest in it. An agent who controls property received by another can obtain it for the purposes of section 71(4). Section 74(4) concerns realisable assets and does not reduce the value of benefit under section 71(4) to an agent’s beneficial interest.

However, where the court retained a discretion, it had to exercise it to serve the legislation’s penal, deterrent and preventive purposes. It could make no confiscation order where a full order would neither remove the defendant’s criminal profit nor prevent the future use of criminal assets, and would operate only as an additional and unnecessary sanction.

The appellant, a solicitor, was convicted of conspiracy to contravene section 93A of the Criminal Justice Act 1988. He had assisted a fraudster, Martin, to launder proceeds of a large excise fraud and to acquire properties through offshore companies. He received no personal profit apart from a car and an agreement for fees.

Crown Court at Southwark. HHJ Elwen made a confiscation order of £3,676,508.50 on 29 May 2002. The sum represented criminal money which had passed through the appellant’s hands or through companies he controlled for Martin, including subsequent increases in property values.

The appeal raised whether the appellant had obtained property of value under section 71(4), whether section 74(4) confined the benefit to his beneficial interest, whether he obtained money paid directly to offshore companies, and whether the judge should have exercised the statutory discretion to make no order.

1. Appeal allowed. The confiscation order was set aside and no confiscation order was made. The judge had erred in directing himself that declining to make an order would subvert the legislation.

2. Section 74(4) of the Criminal Justice Act 1988 governed the valuation of realisable property. It did not govern the assessment of benefit under section 71(4) in the manner advanced by the appellant. A contrary reading would exclude agents, minders and couriers who obtain criminal property without a beneficial interest, despite the legislation’s deterrent and penal purposes.

3. For section 71(4), a defendant can obtain property received by a third party where, following steps taken by him, he retains control over it. The appellant controlled the offshore companies for Martin. He therefore obtained the money paid to those companies and the consequential increase in the properties’ value, although he acted for Martin’s benefit.

4. The court rejected the contention that later confiscation legislation assisted the construction or exercise of discretion under the original statutory regime. The unamended Act was penal and had to be applied according to its own terms.

5. Nevertheless, the original Act conferred a real discretion. Its purposes were to punish and deter offenders, deprive them of criminal profits, and prevent criminal proceeds funding further crime. It was not a compensatory scheme for the Crown. The appellant had not used his own assets to commit the offences, had made no material personal gain, and had already received a substantial custodial sentence and lost his profession. A confiscation order against his legitimate assets would serve none of those purposes. It was neither necessary nor fair to impose that further sanction.

• Court of Appeal (Criminal Division). Allowed the appeal against confiscation and set aside the order: [2006] EWCA Crim 605.
• Crown Court at Southwark. HHJ Elwen made a confiscation order of £3,676,508.50 on 29 May 2002 following the appellant’s conviction.