Proceeds of Crime Bill

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Mr. Hawkins: The Minister needs to be very careful. I believe that the Benjafield case, which was dealt with by Lord Woolf as Master of the Rolls, is on further appeal in the House of Lords and has yet to be decided. Lord Woolf is no longer a law lord: he is now presiding judge in the Court of Appeal. The Minister will doubtless clarify the position in a moment.

The two cases that I quoted, both of which, as I made clear, involved legal principles that are applicable today, were supplied to us by Liberty, a reputable organisation that is supported by all parties. Both cases referred to the law relating to evidential burdens, which is what we are talking about in this context.

Mr. Ainsworth: Those evidential burdens have nothing to do with confiscation. The hon. Gentleman could have cited recent case law dealing with confiscation, but he chose not to do so.

On proportionality and the question of whether the hurdle was too high, which was raised by the hon. Member for Lewes, the Court of Appeal said of the Benjafield case that serious risk of injustice enabled the court to take full account of the requirement for proportionality under the European convention on human rights. That related to assumptions made under previous legislation, so the Benjafield case dealt with the precise issue that we are discussing. According to the ruling, the safeguard in this Bill, which is exactly the same as that in existing legislation, meets the ECHR requirement for proportionality.

Norman Baker: I am grateful to the Minister, whose reply was very helpful. I wanted to question the use of the word ``serious'' but I think that he has dealt with that issue.

Mr. Ainsworth: By replacing the word ``assumption'' with the word ``criterion'', amendments Nos. 51 to 59 would, in effect, abolish the assumptions procedure altogether. Instead, the court would have the discretion to regard the holding, receipt or expenditure of property by the defendant as a criterion by which to calculate benefit.

The hon. Gentleman knows that the assumptions impose, and are intended to impose, a reverse burden of proof so far as specific property that is shown to have been in the defendant's possession is concerned. As I have said, they start from the basis that a lifestyle criminal's property constitutes the proceeds of crime unless the offender proves the contrary on the balance of probabilities. Let us not run away from that; it is what we are suggesting, and I do not want anyone to be under any illusions. When someone has been convicted in terms that identify him as a lifestyle criminal, the burden of proof reverses and it is up to the person to show, on the balance of probabilities, that his assets are not the proceeds of crime. Opposition Members keep on, for whatever reason, trying to weaken that, and put the burden back in some cases—we shall discuss that when we come to the second set of amendments—on to the prosecutor.

Mr. Boris Johnson (Henley): Surely the point is not whether he is a lifestyle criminal, but whether he has a criminal lifestyle. I am not aware of the phrase ``lifestyle criminal''. The Minister seems to be changing the formulation to suit his case. To be accused of being a lifestyle criminal is very different from being accused of having a criminal lifestyle.

7 pm

Mr. Ainsworth: Good gracious me, we are getting tangled up with the wordsmith of The Spectator, a very dangerous road down which to travel. I assure the hon. Gentleman that I am not trying to change meaning. When someone is shown, on the assumptions and criteria in the Bill, to be a lifestyle criminal and to have a criminal lifestyle, then, yes, we reverse the burden and it is for them to show that their assets, gains and moneys spent over a period of time were not the proceeds of crime.

Mr. Johnson: I would like to be absolutely clear. Is the Minister taking the two terms—lifestyle criminal and having a criminal lifestyle—to be coincidental, synonymous and mutually substitutable?

Mr. Ainsworth: I shall try to think on my feet, as the hon. Member for Beaconsfield showed such ability in doing. I do not necessarily see a huge difference between the two terms, and I am at the moment using them like that, turning the words round the other way. If the hon. Member for Henley (Mr. Johnson) can show me a substantive difference, I will happily refrain from doing so and instead use one order of the words rather than the other on each and every occasion.

Mr. Johnson: I thought that we had established the other day that there was a clear semantic difference between being a criminal and having a criminal lifestyle. The Minister says that people who are lifestyle criminals should have their assets expropriated on the balance of probabilities. That is different from saying that that should happen to someone who has a criminal lifestyle.

The Chairman: Order. We are getting into semantics, but we must take matters in context their and in the context of the Bill, that does not really make any difference.

Mr. Ainsworth: There was a lot of confusion the other day about whether the phrase referred to style of dress. We accepted that a better phraseology could be found, and Committee members were challenged with coming up with one, and we will try to do that. That is what I thought that we had established the other day.

In practical terms, the assumptions are an essential means of identifying the value of a criminal's benefits from crime. Only the criminal knows the true origin of his or her property, so it is vital that the criminal should have to account for the legitimacy of those assets. Given the difficulty in most cases of establishing a paper-trail link from the property now held by the criminal to the underlying criminality, it is unrealistic to expect the authorities to prove the criminal origin of the property owned by the defendant.

The hon. Member for Surrey Heath said that either I or my hon. Friend the Minister of State—I do not know which of us he was referring to—had said that there needed to be a linkage between the property and the crime concerned. I cannot recall ever saying that about criminal lifestyle cases. That is absolutely not so—it is exactly what we are trying to avoid, because it is almost impossible to prove.

I contend that amendments Nos. 24 and 51 to 59 would render the legislation ineffective, leaving the proceeds of crime in the hands of lifestyle criminals—or people with criminal lifestyles, if the hon. Member for Henley prefers that turn of phrase. The Government are opposed to those amendments, and I hope that they will not be pressed to a vote.

The first limb of amendment No. 26 would require the director to lead evidence as to the validity of a particular assumption before the assumption is made. The second limb would permit the court to refuse to make the assumptions when the defendant leads evidence that entitles it to do so.

Amendment No. 34 is more straightforward. It would replace the persuasive burden applicable to the confiscation proceedings with an evidential burden.

Amendment No. 76 is a variation on amendment No. 24. It would require the court not to make the assumptions if ``the facts adduced''—to quote from the amendment—for the consideration of the assumptions were not rationally connected with the facts leading to the triggering conviction.

As currently drafted, the Bill states that the defendant must show that the assumption is incorrect if it is not to be made, or there must be a serious risk of injustice if the assumption is made. If the defendant fails to prove that the assumption is incorrect, the court will make the assumption. The defendant will need to show that the assumption is wrong that a particular property was obtained as a result of criminal conduct. That is what the Government intend the legislation to do in cases that involve lifestyle criminals.

Mr. Davidson: What will happen in circumstances in which assets are held in joint names—for example, a home that is owned jointly by a criminal and his or her spouse, or a joint bank account? Will the Minister clarify that now, or on the next occasion when the Committee meets?

Mr. Ainsworth: I hope that my hon. Friend will forgive me, but if I go down that road, a lengthy explanation will need to be given. I will address his point at a later stage of the scrutiny of the Bill. The Bill clearly show how the separation of associated property is to be achieved to ensure that innocent people's property that is tied up with the proceeds of crime is not confiscated, while the proceeds of crime and tainted gifts are confiscated, and while huge loopholes that criminals can use are not provided.

I return to amendments Nos. 26, 34 and 76. Their effects would not be quite the same. The reason for having an assumptions procedure is that criminals are adept at concealing paper trails between their offending and their property. In many cases, that makes it impossible for the director or the prosecutor to lead any evidence as to the criminal origins of the defendant's property. That is why an assumptions procedure is contained in the Bill. If the first limb of amendment No. 26 were accepted, it would mean that, for example, the director would not only have to prove that a particular item of expenditure was made by the defendant but to produce evidence that that expenditure was the proceeds of crime, and only when that evidence had been led would the assumption apply.

By that time, the assumption would be meaningless, as the whole point of the assumption is to make it unnecessary for the director to prove a link between the expenditure and a particular crime. On amendment No. 34, it is not entirely clear what sort of procedure is envisaged. Amendment No. 26 would delete subsection (6)(a). We can assume that the intention is that the defendant would not be required to disprove an assumption on the balance of probabilities. Rather, it would be possible for the court to refuse to make an assumption if evidence was brought that fell short of rebutting the assumption. If that is the case, the amendment would severely undermine the assumptions procedure. Once again, the proceeds would remain in the hands of the criminals.

Amendment No. 34 would put an evidential rather than persuasive burden of proof on the defendant in the assumptions procedure. The Government think that the persuasive burden is fully justified in that situation. If an evidential burden of proof were applied in confiscation proceedings, and the defendant led some evidence that contradicted the assumption, the burden would fall back on the prosecutor to prove on the balance of probabilities the matter to which the assumption related. For example, if the director or prosecutor pointed out that an unexplained transaction for £10,000 was in the defendant's bank account and the defendant produced evidence that he was a gambler, the onus would be on the director or the prosecutor to prove the origins of the money.

As I have previously explained, we are dealing with criminals who conceal any paper trail between their offending and their property. In many cases, there may have been no paper trail in the first place. It is simply not feasible to place that burden on the director or prosecutor.

 
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