Jawad v R

A Proceeds of Crime Act 2002 confiscation order must not be disproportionate under Article 1 of Protocol 1. Following R v Waya [2012] UKSC 51, double counting will ordinarily be disproportionate where criminal proceeds have been restored to the loser, or repayment is guaranteed. A compensation order alone does not establish restoration. Its enforcement may fail, and the prospect of payment does not ordinarily require a reduction in the confiscation order.

Compensation and confiscation serve different purposes. The court may consider compensation when assessing proportionality, but the statutory scheme does not otherwise require either order to be reduced because the other is made.

The appellant pleaded guilty at Bristol Crown Court to money laundering connected with frauds on Lloyds Bank. The lifestyle provisions of the Proceeds of Crime Act 2002 applied. His agreed benefit was £174,827.20, including the bank’s £64,086.76 loss and sums derived from statutory assumptions. His available assets exceeded that benefit.

The judge made a confiscation order for the agreed benefit and a compensation order for the bank’s loss. On appeal, the appellant argued that the overlapping sums made the confiscation order disproportionate in light of R v Waya [2012] UKSC 51. He also relied on section 6(6) and contended that particular criminal conduct could not form part of general criminal conduct in a lifestyle case.

1. The appeal was conditionally allowed in part. If, within 28 days of handing down judgment, the appellant repaid Lloyds Bank £64,086.76 with properly payable interest, the confiscation order would be reduced by £64,086.76. If he did not do so, the appeal would be dismissed.

2. The court followed R v Waya [2012] UKSC 51. Its unanimous reasoning at paragraphs 10–35 formed an integral part of the ruling. A Crown Court must avoid a confiscation order which infringes Article 1 of Protocol 1 because it is disproportionate. This is not a general discretion to make only an order thought fair, and a lifestyle calculation based on statutory assumptions will rarely require a separate proportionality adjustment.

3. A confiscation order will generally be disproportionate if it requires a defendant to pay again money fully restored to the loser. Where there is additional benefit, the sum already restored should generally be excluded from the order. But a compensation order is not payment or restoration. Its enforcement is uncertain and may be discharged by imprisonment in default. Disproportion arises only when double payment is certain, not merely possible.

4. Compensation and confiscation are distinct remedies. Section 13 of the Proceeds of Crime Act 2002 prevents a confiscation order from reducing compensation, but does not preclude the court from considering actual or guaranteed compensation when deciding whether confiscation would be disproportionate. A defendant must provide reliable assurance of repayment, rather than a stated intention to repay.

5. A victim’s request that the Crown seek compensation does not amount to the victim starting proceedings for section 6(6). The relevant proceedings remain the Crown’s criminal proceedings.

6. In a lifestyle case, general criminal conduct includes particular criminal conduct. Section 76(2) defines general criminal conduct as all criminal conduct; the statutory assumptions in section 10 are only one means of proving benefit from it.

7. The court also stated, obiter, that a change in the law does not routinely justify an extension of time to appeal. Such an extension is available only where substantial injustice would otherwise result.

• Court of Appeal (Criminal Division) — conditionally allowed the appeal to reduce the confiscation order if the appellant guaranteed full repayment to Lloyds Bank within 28 days; otherwise the appeal was dismissed.
• Bristol Crown Court — following guilty pleas to money laundering, made a confiscation order based on benefit of £174,827.20 and a compensation order of £64,086.76 in favour of Lloyds Bank.