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Session 2001- 02
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Standing Committee Debates
Proceeds of Crime Bill

Proceeds of Crime Bill

Column Number: 45

Standing Committee B

Tuesday 11 December 2001


[Mr. John McWilliam in the Chair]

Proceeds of Crime Bill

4.30 pm

The Chairman: Before we come to amendment No. 365, I ask the indulgence of hon. Members. As they can hear, I am not my usual cheerful self, and I apologise in advance if I am less kind and considerate than I normally am.

Mr. David Wilshire (Spelthorne): On a point of order, Mr. McWilliam. You ask us to treat you kindly, so I shall ask you whether I may take my jacket off before I do so.

The Chairman: Gentlemen may remove their jackets if they wish. Ladies do not have to ask.

Clause 245

General purpose of this Part

Mr. Dominic Grieve (Beaconsfield): I beg to move amendment No. 365, in page 145, line 8, after 'property', insert

    'to the value at least £10,000'.

We now come to a completely new part of the Bill, which contains some of its most important and novel provisions—those for civil recovery of the proceeds of unlawful conduct. We shall have to consider many issues on part 5. The Opposition support the Government in introducing the principle of civil recovery, which will allow the enforcement agency to bring proceedings to recover the proceeds of unlawful conduct. In many ways, ironically enough, I am more comfortable with some of the concepts underlying civil recovery than with, for example, the assumptions that underlie some of the confiscatory regime.

Civil recovery allows for a procedure that is fairly well tried and tested. I hope that the courts, with their long experience of civil litigation, will not have too much trouble in applying rules that do justice in cases of this kind. That said, as we consider this part, we shall express concerns about the extent to which the rules are being changed to create something more novel than the ordinary civil recovery system.

The clause spells out the general purposes of part 5. Subsection 1(a) says that it enables

    ''the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct''.

That brings us to the amendment, which is important and allows us to consider whether we should introduce a de minimis rule about the quantity of assets that should be aimed at in civil recovery proceedings. It would limit that quantity to sums of more than £10,000.

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The Government, in introducing the Bill, have shown that they are keen to attack criminals of all classes and kinds. That includes not just drug barons living in palatial mansions in the home counties, but the smaller-scale criminal who lives off the proceeds of crime but has far fewer assets. Nevertheless, the Committee should carefully consider whether there is any desire to pursue people whose suspected benefits from unlawful conduct may be very small. Substantial costs will be associated with bringing those proceedings. In many cases, I suspect that the costs will not necessarily be recoverable from the person against whom proceedings were brought, by the time they have been cleaned out, although it is possible that the assets recovered will at least equal the costs. Costs of £10,000 are run up quickly in civil litigation, as I am sure that the Under-Secretary is only too aware in connection with the costs of litigation conducted through the Treasury solicitor when people bring actions for assaults in prison, and with other burdens for which Home Office Ministers have to cater. In that context, £10,000 is peanuts.

I stress to the Minister that £10,000 is a de minimis figure. Although it may sound like a lot of money, it is very little in comparison with litigation costs. I wonder whether introducing such a figure might have two merits. First, it would protect the Assets Recovery Agency, which would not have to worry about recovering small amounts of money under civil proceedings. The agency would know at the outset, notwithstanding possible public pressure, that the amount that would eventually be recovered would not be outweighed by the costs of doing so.

Mr. Tom Harris (Glasgow, Cathcart): Does the hon. Gentleman not accept that given the existing wording, subsection (1)(a) enables rather than compels the authority to proceed with civil recovery? Surely that should be left to the discretion of the authority. The authority would not be obliged to pursue sums of less than £10,000.

Mr. Grieve: The hon. Gentleman is right. There will be a discretionary remedy for the authority, and, as we shall argue later, we hope that the authority will exercise its discretion. The authority is being given a fairly novel and potentially draconian power to bring civil proceedings against people who may never have been convicted of an offence. Clearly, one would not expect it to waste time and money trying to recover assets that would be insufficient to meet the costs of the recovery process. However, if the hon. Gentleman will bear with me, I shall go on to explain there are two issues to consider.

First, if the authority comes under pressure, a de minimis provision will allow it more easily to say that whatever the circumstances, the assets available will be totally insufficient. Secondly—this is an important question: should individuals whose assets allegedly obtained through unlawful conduct are less than £10,000 in value be pursued at all, even if the agency is minded to pursue them? Given the novel nature of the power, and the civil remedy or civil litigation procedure whereby there is not an aggrieved party but

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the state seeks to recover certain types of assets, there is a good argument that a £10,000 cut-off point would be appropriate. I am open to suggestions. Even in civil litigation nowadays, there is a de minimis cut-off point. One cannot go to the county court and issue proceedings for the £10 that one is owed. I am not sure of the position in Scotland, but one certainly cannot do that in England or Wales.

It is therefore accepted that there is a point at which the court should not be seized of or bothered with very small sums of money. I accept that hon. Members may argue that there might be circumstances in which somebody who is identified as having less than £10,000 of assets through unlawful conduct should be pursued. However, it is worth bearing in mind that we are dealing with a civil procedure, so the likelihood is that we will not be dealing with convicted criminals. We may well be dealing with people with unblemished reputations.

The Committee should also bear in mind the extent to which civil proceedings of that type could be exceptionally damaging to the reputation of the accused individual, even if they were to win the case. Proceedings are brought against someone by a very powerful authority, which effectively brands them as a criminal, because they are living off assets obtained through unlawful conduct. The proceedings will be public, and will probably attract a great deal of publicity. There may be occasions when individuals who are dragged through this process, and who have never had a criminal conviction, find that not a single asset is seized, and they are exonerated. However, in the meantime, enormous damage might have been done to their reputation.

If the high point of the agency's case is that it believes that less than £10,000 of an individual's assets has been obtained by unlawful conduct, is it reasonable that that person—who, as I have said, will probably never have been convicted of a criminal offence—should be put through such a process? That issue must be addressed now, and it will also arise in subsequent examinations of this part of the Bill. I have anxieties about the extent to which individuals might be badly damaged, although they were subsequently exonerated, and the fact that they might never recover from that damage.

Mr. Harris: The hon. Gentleman seems to be making a case for never taking to court anyone who might be found not guilty. Everyone who is taken to court, even in a criminal case, has the right to prove themselves innocent, although they will have to go through the inevitable questioning.

The hon. Gentleman described the £10,000 limit as peanuts. However, if the recovery agency takes 50 or 100 per cent. of the ill-gotten gains, that is what is important, rather than the actual figure on paper. Similarly, when £1 million is taken from a big criminal, if that represents only 20 per cent. of his ill-gotten gains, it might be less of a blow to him than taking £8,000 would be to a smaller criminal.

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Mr. Grieve: I take on board the hon. Gentleman's point, but it does not alter my argument, which is that this is an unusual remedy—because it is not a remedy at all, because nobody has done anything against the party that is bringing the action. That party is bringing the action in the name of public policy, on the basis that it is wrong that an individual should have assets that have been obtained through unlawful conduct.

There will be a civil test, so there will be civil proceedings. During the course of them, it is likely that an individual's finances and personal life will be trawled through. There is the capacity for a great deal of damage to be done. If the individual concerned is found to have substantial assets as a result of unlawful conduct, that is his problem, and few people are likely to have any sympathy for him. However, I wonder how public perceptions might change if it were felt that an individual was being hounded, because they were being put through a process that was extremely difficult for them, when it was clear throughout the unfolding of the proceedings that the maximum value of the assets being targeted for recovery was rather small. There is a danger that at that point, allegations of unfairness might be made. I am sure that the Minister wants to avoid that, because for the procedure to command acceptance and be approved, people want to see it working and taking money away from those who are manifestly criminal, or who at least behaved unlawfully and benefited from that conduct.

4.45 pm


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