Proceeds of Crime Bill

[back to previous text]

Mr. Bob Ainsworth: The amendments would make it discretionary, rather than mandatory, for interim receiving orders to prohibit dealing with the property. If civil recovery is to be effective, the rights of the director—or, in the case of Scotland, Scottish Ministers—to recover property should not be frustrated because the respondent has dissipated the assets. That is why the civil recovery scheme allows an interim receiving order to be made if the necessary criteria are met.

An interim receiving order is an order for the detention, custody or preservation of property and for the appointment of an interim receiver. If the court agrees that the criteria for an interim receiving order are satisfied, it may make such an order under clause 251 or clause 259. The court is not required to do so even if it accepts that the conditions in clause 251(5) and (6) or the equivalent conditions in clause 259 are met. If, therefore, a court has decided to make an interim receiving order, it has decided that the property included in the order should be detained, taken into custody or preserved as appropriate.

In order to ensure that the property is given the protection intended under the interim receiving order, it is essential that the court prohibits any person whose property is covered by the order from dealing with it. As defined in clause 310, ''dealing'' with property

    ''includes disposing of it, taking possession of it or removing it from the United Kingdom''.

Such activities seem incompatible with the intention of an interim receiving order. We therefore think that it is right that the court should be required to make the prohibition, subject to its power to make exclusions as allowed under clause 255 and its Scottish equivalent, clause 263. Those clauses strike the right balance in that respect and adopt the approach applied to freezing injunctions in private civil litigation.

The prohibition on dealing with property is not inflexible. The court may make exclusions from the order, either when it is made or later. Any person to whose property the order applies can apply for an exclusion to allow dealing. However, it is right that the default position should be that dealing with property that is subject to an interim receiving order is prohibited. That seems the safest and fairest option; it will allow property to be excluded but will protect the rights of the director or Scottish Ministers to recover the property.

I do not think that the hon. Gentleman is intent on proving that he will withdraw the amendment once we have considered it. He said that the next group of amendments would allow the respondent to be dealt with differently from anyone else affected. The discretion is there; it is just the other way round from that which he would like to insert in the Bill.

Mr. Grieve: I listened carefully to the Minister, and I am aware of the potential problems of providing a discretionary power in line 2 of the clause. In certain circumstances, the court might, if allowed, consider that it had an exceptional reason to allow dealings in the property. That said—and subject to the key issue, which is the need for compensation provisions for those who are adversely affected—I am mindful of the Minister's comments. Therefore I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

12.30 pm

Mr. Grieve: I beg to move amendment No. 362, in page 149, line 8, leave out 'any person' and insert 'the respondent.'

The Chairman: With this we may discuss the following amendments: No. 379, in page 149, line 11, at end insert—

    '(3A) An exclusion must, in particular, make provision for the purpose of enabling any person other than the respondent—

    (a) to meet his reasonable living expenses, or

    (b) to carry on any trade, business, profession or occupation,

    and may be made subject to conditions'.

No. 352, in page 149, line 12, leave out subsection (4).

No. 387, in clause 263, page 152, line 25, leave out 'may' and insert 'must'.

No. 388, in clause 263, page 152, line 30, leave out subsection (4).

Mr. Grieve: I now turn to the second group of amendments that we have tabled to the clause, which are more specific. They would allow for individuals to meet their living expenses and carry on trade or business that would require an ability to deal in the property that has been subject to the receiving order.

The amendments differentiate between the position of the respondent and the position of others who may be subject to the order. My principal concern is for innocent parties, who may be affected by the order and against whom the receiver acts solely in order to secure property, without any accusation of collusion's having necessarily been made against them. In the case of the respondent, I accept that discretion should be exercised as to whether he is allowed

    ''(a) to meet his reasonable living expenses, or,

    (b) to carry on any trade, business, profession or occupation''.

However, in the case of another person, who is not the respondent to the proceedings, there is a powerful argument for a mandatory provision enabling him to meet his reasonable living expenses and carry on his trade, business, profession or occupation. That is the intention of the amendments.

Amendment No. 362 would remove the reference to ''any person'' and would insert the reference to ''the respondent''. Thus, subsection (3) would deal only with the respondent's position and leaves that as discretionary. Amendment No. 379 would introduce a new subsection (3A) to deal with the situation of any person other than the respondent, and makes the provisions mandatory. Thus, provision would have to be made for the reasonable living expenses and the opportunity to carry on the trade, business, profession or occupation.

In addition to those two principal amendments, we have tabled other amendments. Amendment No. 352 is important. Under subsection (4), no exclusion may be made

    ''for the purpose of enabling any person to meet any legal expenses in respect of proceedings under this Part.''

Can the Minister clarify what it is intended should happen in such circumstances? Will there be an automatic eligibility for legal aid? I suspect that the hon. Gentleman will refer to the fear that assets may be dissipated by the litigation and in running up legal fees. However, we are dealing with civil proceedings, not confiscation. There has always been the opportunity for a party to civil proceedings to pay his lawyers at the end of those proceedings, thus dissipating the potential assets available for recovery. It is one of the facts of life that individuals have to accept.

Does the Minister wish to intervene?

Mr. Bob Ainsworth: No.

Mr. Grieve: It would not be worth my while, if I were to bring proceedings against an individual to recover several thousand pounds, and that individual could not pay me the money—he might have had the money at the start of the proceedings, but during the course of them he might have paid his lawyers, so that, when the case came to judgment, that money was not available. One must take account of the costs of legal proceedings when deciding whether to sue someone.

We are discussing ordinary civil proceedings. As the Minister often reminds the Committee, this is a civil recovery procedure: indeed, he is unhappy when I suggest that it is some new administrative law structure, introduced by the heavy hand of the state—he gets excited and worked up when I say that.

If we are dealing with ordinary civil proceedings, I am surprised that, in this section of the legislation, we should be preventing reasonable legal expenses from being provided for out of the defendant's—or, rather, the respondent's—money. I want the Minister to comment on that point. I have not decided whether to press the matter to a Division, as a serious issue is at stake.

Amendments Nos. 387 and 388 refer to the same matter in respect of Scotland, so I need not address them in detail.

Mr. Ainsworth: Here I am, trying to foster the impression that I am totally unflappable, and the hon. Gentleman has seen through me; he realises how excitable I am.

Amendments Nos. 362 and 379 amend the clause to require the court to make exclusions, where a person other than the respondent is concerned. Amendment No. 362 would amend subsection (3) so that it applied solely to the respondent. Thus, the court would have discretion whether to make exclusions to enable the respondent to meet reasonable living expenses, or to carry on a trade, business, profession or occupation.

Amendment No. 379 would insert a new subsection, relating to any person other than the respondent. It therefore assumes that amendment No. 362 has been made. It would require that exclusions be made to enable such persons to meet their living expenses and to carry on their trade or profession.

The hon. Gentleman said that he wanted the same measures to apply to Scotland, although the amendments do not quite do that, due to a drafting error.

The effect of amendments Nos. 352 and 388 would be to allow the court to release assets to pay legal fees for proceedings under part 5.

As I explained in speaking to the previous amendments to clauses 255 and 263, for civil recovery to be effective, the right of the director to recover property should not be capable of being frustrated by the dissipation of assets by the respondent. That is why the civil recovery scheme that is set out in the Bill provides that an interim receiving order may be made, where the necessary criteria are met. We recognise, however, that there may need to be exclusions to the general prohibition on dealing with property, where an interim receiving order or interim administration order is in place. That is why the court is empowered to make exclusions. Particular reference is made to exclusions that would enable a person to meet his reasonable living expenses, or to enable him to carry on a business. However, exclusions could be made for other purposes at the discretion of the court.

Clause 255 and its Scottish equivalent thereby adopt the approach already applied in the case of freezing injunctions made in private civil litigation.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 18 December 2001