Crown Prosecution Service v Jennings

The appeal concerned the lawfulness of a restraint order made under section 77(1) of the Criminal Justice Act 1988 and the correct interpretation of the definition of "benefit" in section 71(4) of the 1988 Act. The House held that, properly read, section 71(4) requires that the property said to constitute a defendant's benefit must have been obtained by him (that is, obtained by him alone or jointly) as a result of or in connection with the offence; it is not enough merely that his acts contributed to another person obtaining property. The court declined the appellant's argument that the Crown had improperly sought to pierce the corporate veil of UK Finance (Europe) Ltd, finding no merit in that contention given the convictions and the factual matrix. Although critical of aspects of the Court of Appeal's formulation of causation, the House concluded there was sufficient material to support the original restraint order.

Background and parties: The appellant, Mr Jennings, an employee (but not a director or shareholder) of UK Finance (Europe) Ltd, appealed against the dismissal of his challenge to a restraint order made under section 77(1) of the Criminal Justice Act 1988. The company was said to have perpetrated an "advance fee" fraud between December 2000 and August 2001. The prosecution calculated total moneys obtained from the fraud at £584,637.64. The appellant accepted that he benefited to some extent but contended his actual receipts were limited (about £50,000).

Procedural history: Forbes J made the restraint order. Leveson J refused to discharge it. The Court of Appeal dismissed the appellant's appeal ([2005] EWCA Civ 746). The appellant was tried, convicted on 6 June 2005 and later sentenced to five years' imprisonment. Confiscation proceedings have been postponed pending this appeal.

Nature of the application and issues: (i) The appellant sought discharge of the restraint order. (ii) The primary legal issue was the construction of section 71(4) of the Criminal Justice Act 1988: whether to "obtain" property for the purposes of a benefit requires that the defendant himself came into or controlled that property, or whether it suffices that his acts materially contributed to others obtaining it. (iii) A secondary issue was whether the Crown had improperly sought to pierce the corporate veil by treating company receipts as the appellant's realisable property.

Court's reasoning and conclusions: The House emphasised that the confiscation regime is aimed at depriving a defendant of what he has gained or its equivalent and should not operate as a fine by depriving him of what he never obtained. Reading section 71(4) in that light the court concluded it ordinarily denotes property obtained by the defendant (alone or jointly), which will commonly imply a power of disposition or control. The House rejected Laws LJ's formulation that all that was required was that the defendant's acts contributed, to a non-trivial extent, to "getting" the property; such contribution may occur without the defendant himself obtaining the property. The court nonetheless found that there was sufficient material to justify the restraint order and rejected the corporate veil argument on the facts since the defendants' acts in the company's name had led to convictions. The appellant's limited challenge on fresh evidence raised no point of general public importance.

Relief sought: discharge of the restraint order.

Outcome: appeal dismissed; parties invited to make written submissions on costs.

Appeal dismissed. The House held that section 71(4) of the Criminal Justice Act 1988 should be read to mean that a person benefits from an offence only if he obtains property as a result of or in connection with its commission (that is, property obtained by him, alone or jointly), and not merely that his actions contributed to another obtaining property; nevertheless there was sufficient material to justify the restraint order and no improper piercing of the corporate veil.

Forbes J made the restraint order under section 77(1) of the Criminal Justice Act 1988. Leveson J refused to discharge the order. The Court of Appeal dismissed the appellant's appeal in Jennings ([2005] EWCA Civ 746). The matter was then considered by the House of Lords, which handed down judgment on 14 May 2008 ([2008] UKHL 29).