R v Varma

Where the statutory conditions for confiscation are satisfied, the Crown Court must make a confiscation order even if the offender receives an absolute or conditional discharge. A discharge does not extinguish the mandatory confiscation regime under Part 2 of the Proceeds of Crime Act 2002.

The confiscation order must be left out of account when the court decides the appropriate sentence, including whether a discharge is justified. Postponing confiscation proceedings and sentencing the offender first does not remove the continuing duty to proceed with confiscation. The distinction between a statutory duty and a discretionary power is critical.

The respondent pleaded guilty to three offences of knowingly participating in the fraudulent evasion of import duty. He received a two-year conditional discharge. Following postponed proceedings under Part 2 of the Proceeds of Crime Act 2002, the Crown Court ordered him to pay £1,500 by way of confiscation.

Relying on R v Clarke [2009] EWCA Crim 1074, the Court of Appeal allowed his appeal and quashed the order: [2010] EWCA Crim 1575. The prosecution appealed. The issue was whether the Crown Court could make a confiscation order following conviction where the offender received an absolute or conditional discharge for the same offence.

1. The appeal was allowed unanimously and the £1,500 confiscation order restored. Lord Clarke, with whom Lord Dyson and Lord Reed agreed, held that the certified question should be answered affirmatively. Lord Phillips and Lord Mance agreed with that judgment and the proposed disposal.

2. Sections 6 and 13–15 of the Proceeds of Crime Act 2002 establish a mandatory scheme. Once the conditions in section 6 are satisfied and the court finds that the defendant benefited from relevant criminal conduct, it must determine the recoverable amount and make a confiscation order. Section 6(6) converts that duty into a power only in the circumstances specified there.

3. An absolute or conditional discharge is compatible with confiscation. Section 13(4) requires the confiscation order to be left out of account when the court decides the appropriate sentence. That sentencing process includes considering a discharge. The absence of confiscation orders from section 12(7) of the Powers of Criminal Courts (Sentencing) Act 2000 does not qualify the mandatory language of the 2002 Act.

4. Postponement does not extinguish the duty. Sections 14 and 15 permit the court to sentence before concluding confiscation proceedings, but the statutory obligation to proceed under section 6 remains. A discharge imposed during the postponement period cannot absolve the court from that obligation.

5. R v Clarke [2009] EWCA Crim 1074 was wrongly decided insofar as it held that a confiscation order could not accompany a discharge. The authorities concerning discretionary deprivation or disqualification orders did not govern a mandatory statutory duty. The Supreme Court nevertheless agreed with Clarke that the conviction and confiscation proceedings were part of the same proceedings for section 14(1) of the 2000 Act.

6. Whether confiscation constitutes punishment was immaterial because section 13(4) expressly separates confiscation from the sentencing decision. Lord Clarke considered that confiscation was punishment but found a final conclusion unnecessary. Confiscation following a discharge was not an abuse of process. Proportionality under article 1 of Protocol No 1 might affect assessment of the recoverable amount, but it did not determine the issue in this appeal.

1. United Kingdom Supreme Court: Allowed the prosecution’s appeal unanimously and restored the confiscation order: [2012] UKSC 42.
2. Court of Appeal (Criminal Division): Following R v Clarke, extended time, allowed the respondent’s appeal against sentence and quashed the confiscation order: [2010] EWCA Crim 1575, [2011] QB 398.
3. Crown Court at Isleworth: Imposed a two-year conditional discharge and, after postponed confiscation proceedings, made a £1,500 confiscation order.