Proceeds of Crime Bill

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Mr. Grieve: I am grateful to the Minister for his sensible approach to the issue and for appreciating that it is important. I am mindful of the fact that simplicity can help with the administration of justice. He wants to send out a simple message that the court should apply the civil standard of the balance of probabilities. He believes that the procedure of civil recovery will be fair and that the sort of cases to which I referred are unlikely to arise, because the director will not use his discretion to target such property. Nevertheless, I still take the view that a fundamental issue of importance is involved because of the nature of the power that we are giving the state.

It is perhaps unfortunate that this debate has had to take place so early in our consideration of part 5. I am the first to admit that the more I read part 5, the more it raised questions and anxieties in my mind. I shall make a point now in a nutshell and will amplify it when we debate subsequent amendments.

As the procedure is described as a civil recovery procedure, some might believe that the state is being placed in the same position as an individual pursuing a case against another individual for tortious interference with his goods and chattels, the only difference being that the victim would have priority and that the state is in reserve behind, arguing that, notwithstanding the fact that no identifiable victim will bring proceedings to recover the money, the state as a matter of public policy is placing itself in the victim category in order to bring civil proceedings to recover property.

In fact, however, on reading through the part, it becomes apparent that that is not what we are doing. It is true that many elements in the wording of the part are similar to those of the rules in tort in bringing an action to recover property against an individual. We shall discuss those later, so I shall not detain the Committee on the matter now. However, other elements are quite different.

When I asked about the limitation period, the Minister informed me that it is 12 years. However, unless I am mistaken, 12 years is the limitation period that I would expect for fraud and certain other actions, but a straight action for tortious interference with my goods and chattels would have a six-year limitation period. I highlight that as an area in which the state is taking more powers. There are further areas in which we consider receivers. The state is taking on powers within receivership that are wholly different from those that an individual would have when bringing an action. An individual may get injunctive relief to prevent the disposal of assets, such as a Moreva injunction, but his powers will be more circumscribed than those of the state.

Ian Lucas (Wrexham): Is not the Assets Recovery Agency's position in these proceedings similar to that of Customs and Excise and the Inland Revenue when they proceed to recover sums that are due under tax legislation?

9.15 am

Mr. Grieve: The hon. Gentleman is almost certainly right. We have a hybrid that combines the powers that state enforcement agencies have had in limited areas to recovery money due by law with the principles of tort that allow an individual to sue another individual for the recovery of property that was unlawfully obtained. I have read the clauses of part 5, and I reread them last night. I thought that the two concepts were mixed.

Ian Lucas: Is not the procedure not entirely novel but close to that followed in connection with matters that are not, strictly speaking, unlawful conduct? The state already proceeds through the Inland Revenue and Customs and Excise in similar cases.

Mr. Grieve: I take the hon. Gentleman's point, but in the two cases that he cited—Customs and Excise for VAT and the Inland Revenue for tax—the law of the land says that there is a legal obligation on an individual to pay tax or VAT. Failure to do that may be a criminal offence, but both organisations may use civil recovery.

The unusual aspect of part 5 is that it would create a new category of civil wrong: possessing assets that were unlawfully obtained, or ''obtained through unlawful conduct'', as the Bill says. I make a point from the letter that the Minister wrote to me—it was helpful and made the point crystal clear—that such assets include those that have not necessarily been unlawfully obtained by the unlawful conduct of the person against whom the action is directed.

Philosophically, the concept is novel, because the state does not lose anything. That is unlike under tax or VAT law, because in those circumstances, the state has a legal right to certain assets that it has not obtained. In this case, the state has no contractual or existing legal right to the assets. The state has decided that it wants the Government to ask Parliament to pass legislation to provide that proceeds of unlawful conduct should be forfeited to the state as an issue of public policy. The state can bring a civil action to achieve that against not only the person who obtained the assets but, more pertinently, any person who possesses the assets, subject to reservations.

Mr. Ainsworth: I apologise for intervening before the hon. Gentleman moves his argument further—I am not trying to break his train of thought. He assumes that we based civil recovery on tortious interference rather than a victim's proprietary claim. His point that the time period should be six years rather than 12 is not necessarily the case.

Mr. Grieve: Perhaps I did not catch the last part of the Minister's contribution. He said that this was not based on tortious interference with goods but on—

Mr. Ainsworth: On the victim's proprietary claim.

Mr. Grieve: But it is a feature of the legislation that, in many cases, the property is the proceeds of unlawful conduct when there is no victim. That must be right. In 1994, my house was burgled, and various chattels were taken from it. The following day, I went down the road and succeeded in finding out where they had gone. I told the police, and half of them were recovered. The other half were never recovered and I toyed with the idea of bringing civil proceedings against the individual concerned. That is a crime in which assets have been obtained and there is a victim—I have lost something. In many cases of unlawful conduct, however, there may be no identifiable victim in a position to bring an action.

Mr. Ainsworth: An identifiable individual.

Mr. Grieve: If the proceeds of unlawful conduct are a stash of £1 million as a result of the sale on the streets of heroin, no individual will have a private right of action to recover that money.

Mr. Ainsworth: But the hon. Gentleman cannot claim that there is no victim of serious and organised crime. Society as a whole is a victim of such crime. The basis and justification for taking these actions is that they are proportionate to the problems that society faces, and society needs to be protected from such activity, which is extremely lucrative.

Mr. Grieve: The Minister must excuse me if I have expressed myself in such a way that he felt he had to make that intervention. Of course I appreciate that the basis of the legislation is precisely what he said. That is one of the reasons why we are prepared to support it. It is not a question of the state, the Government, or whatever word you want to use to describe it—

The Minister of State, Scotland Office (Mr. George Foulkes): It is not the state.

Mr. Ainsworth: The agency.

The Chairman: Order. First, I do not want to describe it at all. Secondly, it is very difficult for Hansard reporters to produce an accurate record if hon. Members make sedentary interventions.

Mr. Grieve: We shall talk about the Government. The Government are not placing themselves in the same position as an aggrieved party bringing a claim in tort for somebody having taken their assets. One of the reasons for that is that their claim extends more widely. It does not extend only to assets in relation to which there is an identifiable victim but assets that have been obtained by unlawful conduct, in relation to which the Government say that society has been the victim. That may help the Minister in terms of a community of approach between the two of us.

I do not accept—I do not want to drift too far from the point on which I started—that one should approach the matter on the basis of its being a civil procedure, in which case the balance of probabilities should apply, as that is the normal civil standard. As the Minister agreed during our debate, there are several areas in which the courts, in civil proceedings, have had to look at conduct that is different from ordinary civil disputes between individuals. It is precisely in those areas that the court has had a tendency, by discretion, over time, based on particular cases that it must consider, to introduce a more variable test, depending on the particular facts of each case.

In asking the Committee to alter the balance of probabilities to the civil standard of proof, I am asking it to give that measure of discretion and flexibility to the judiciary, in view of the unusual nature of the powers that will be conferred on the Government. It is as simple as that. It is unlikely that the amendment would substantially alter the recovery agency's ability to confiscate assets. However, the proceedings that we are creating are unusual, and the amendment would provide a protection that takes that into account.

I am not convinced that we are talking about civil recovery. It was commonly assumed that the Government were putting themselves in the position of an ordinary litigant, but that is not the case. The powers that are being given are administrative law powers. As the hon. Member for Wrexham (Ian Lucas) rightly said, they are similar to the powers of the Inland Revenue and Customs and Excise. However, those powers are being given in a context in which the origin of the targeted assets cannot always be as precisely traced to wrongdoing as can the assets that are dealt with by the Inland Revenue and Customs and Excise, because, as I have said to the Minister—and as he, tellingly, states in his letter—the provisions in part 5 can bite far beyond the individual who has obtained proceeds by unlawful conduct. They can bite on an innocent individual—albeit with reservations—and that is why it would be right to introduce the civil standard of proof.

If I do not ask for the matter be put to the vote now, I will not be able to do so later. My concern about the matter might lessen, as our examination of part 5 progresses. If that happens, I will inform the Minister—and we might not need to return to the matter on Report. However, at the moment, based on what I have seen of this part of the Bill, it is right that we should put it to the vote, and I invite the Committee to approve the amendment.

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Prepared 13 December 2001