R v May

The House of Lords upheld a confiscation order made under the statutory confiscation regime. The court stressed the three separate statutory questions courts must ask when making confiscation orders: (i) has the defendant benefited from relevant criminal conduct; (ii) if so, what is the value of that benefit; and (iii) what sum is recoverable from the defendant. The court held that where property or proceeds have been obtained jointly and are properly to be regarded as jointly held or jointly controlled, each joint controller may be treated as having obtained the whole for the purposes of assessing benefit; there is no statutory requirement to apportion the total benefit among joint beneficiaries. The court emphasised that answers must follow the statutory language and that apportionment is not authorised by the statute, although in exceptional cases issues of proportionality under the Convention might arise. The court also noted the trial judge had erred by deducting sums recovered from missing traders when assessing the benefit (a confusion of benefit with realisable assets), but that the confiscation order nonetheless remained lawful and proportionate on the facts.

This appeal concerned the validity and proper assessment of a confiscation order made after the appellant pleaded guilty to conspiracy to cheat (VAT carousel fraud). The appellant was sentenced in 2001; a confiscation order for 3,264,277 was made in 2002. The Court of Appeal substituted a reduced custodial sentence but upheld the confiscation order; the appellant appealed to the House of Lords.

The facts: the appellant joined a "missing trader" carousel VAT fraud and was found to have been a driving force in the last two phases. The fraud deprived public funds of several million pounds. The trial judge assessed the defendant's benefit at 3,264,277 after deducting monies recovered from third parties; the House of Lords observed that deduction was an error of method (confusing benefit and realisable assets).

• Nature of the application: appeal against a confiscation order made under the statutory confiscation regime (1986, 1988, 1994 and 2002 enactments) following conviction for conspiracy to cheat (VAT fraud).
• Issues before the court: whether the benefit attributable to a defendant who jointly controls property must be apportioned among joint participants or whether each joint controller may be regarded as having obtained the whole; whether the statutory scheme permits multiple recovery; application of the three statutory questions; compatibility and proportionality concerns (including Convention arguments).
• Reasoning: the committee analysed the development of the confiscation statutes and authorities, reiterated that the court must answer the three distinct statutory questions, and held that where property is obtained or controlled jointly a defendant ordinarily "obtains" the property and may be assessed as having benefited to the full value. The court rejected an argument that the statute requires apportionment among joint beneficiaries and concluded that R v Porter did not support such an apportionment principle. The committee also emphasised that factual findings are decisive and that answers must follow the statutory language; exceptional proportionality concerns might justify a different approach but did not arise on the facts.

Appeal dismissed. The House of Lords held that where defendants jointly obtain or control property representing the proceeds of crime each may be treated as having obtained the whole for purposes of assessing benefit under the confiscation statutes; statutory language does not require apportionment between joint beneficiaries. The three statutory questions must be answered separately and by reference to the statutory language; although the trial judge had erred in deducting recovered sums when assessing benefit, the confiscation order was nonetheless lawful and not disproportionate on the facts.

Conviction and sentence at the Central Criminal Court (2001); confiscation order made 2 August 2002 for 3,264,277. Court of Appeal (Keene LJ) [2005] 1 WLR 2902 upheld the confiscation order but allowed the appeal against sentence (reducing custody). Appeal to the House of Lords: [2008] UKHL 28 (this decision).