Box, R v

Under the tainted-gifts regime, a confiscation order must include the statutory value of gifts made after the relevant day. Where the value at the date of the gift exceeds the value of property found in the recipient’s hands, the court need not trace the gift into assets held by the recipient.

Proportionality under section 6(5) of the Proceeds of Crime Act 2002 is directed to recovery of criminal benefit. It is not a general discretion to avoid hardship. A reduction will be exceptional and requires clear, complete and reliable evidence that the order will not recover criminal proceeds and will merely produce an unavoidable default sentence.

The respondent, a solicitor, pleaded guilty to theft, fraud and making a false instrument committed between 2003 and 2015. Her agreed benefit from criminal conduct was £4,085,058.28. Following confiscation proceedings, the Crown Court found an available amount of £1,929,295.88 and made an order for that sum.

The judge included £470,000 for tainted gifts but reduced the value of several gifts because the recipients had spent them or could not be expected to repay them. The prosecution sought leave to appeal solely against that reduction. The central issue was whether proportionality permitted the court to exclude tainted gifts on that basis.

1. Appeal allowed. The confiscation order was increased to £2,452,440.33. No adjustment was made to the eight-year consecutive term of imprisonment in default.

2. The tainted-gifts provisions of the Proceeds of Crime Act 2002 required the court to include the value of the relevant gifts in the available amount. Under section 81, that value is the greater of the inflation-adjusted value when the gift was made and the value of property found in the recipient’s hands. Once the former is greater, the court has no statutory warrant to trace the gift into the recipient’s assets. Spending the money does not prevent its value being included.

3. Section 6(5) requires an order that is proportionate to the statutory aim of recovering criminal benefit. Following R v Waya [2012] UKSC 28 and applying R v Beverley Johnson [2016] EWCA Crim 10, proportionality does not create a general discretion to prevent hardship. It may exceptionally justify a reduced order where reliable evidence establishes that the order cannot recover criminal proceeds and will only result in an unavoidable default sentence.

4. There was no evidence from the respondent or any recipient of a gift. The judge therefore had no proper evidential basis for finding that the unreduced order would be disproportionate. Further, the judge wrongly treated the issue as one of tracing assets or assessing whether innocent recipients would voluntarily fund repayment. The recipient’s use of the gift and knowledge of its source were generally irrelevant. The order was instead intended to encourage the offender to recover the criminal proceeds from those to whom she had passed them.

• Court of Appeal (Criminal Division): In [2018] EWCA Crim 542, the prosecution’s appeal was allowed and the confiscation order was increased.

• Crown Court: On 15 November 2017, Her Honour Judge Belcher found an available amount of £1,929,295.88 and made a confiscation order for that sum.