Mr.
Coaker: The hon. Gentleman’s second point—on
civil recovery and how far one goes back in relation to evidence of an
acquisitive crime—is interesting. I will say something about
that in a
moment. For
once, I am not sure whether I properly understand his point about fair
trial. It strikes me that, whether a trial is in the civil or criminal
courts, if the evidence is not of sufficient quality, it is part of a
court’s fundamental process that proceedings will not be able to
be pursued in the judicial system. There will be cases where it will be
more difficult to gather evidence and collect material—as the
hon. Gentleman said, memories fade—but that is part of most
court processes. I understand his point that, if the amount of time is
extended, such circumstances are more likely to occur, but that will
clearly be a matter for the court to consider. The inadequacy of
memories or written material is not a reason to say that it is not
appropriate for us to legislate under the powers. I would have thought
that that is something that the court will take into
account.
James
Brokenshire: To clarify the point that the Fraud Advisory
Panel highlighted, I am comparing the resources that might be available
to the arms of the state to launch a prosecution and to obtain all the
evidence and documents mentioned by the Minister with the ability of an
individual to defend that case in circumstances where a significant
period has elapsed. We presumably have limitation periods for a reason,
and the Minister might be able to make an argument for a period of more
than 20 years, but the issue has clearly been raised with him, Why has
20 years been decided upon and why is the period of 12 years to be
extended
now?
Mr.
Coaker: The hon. Gentleman makes the point that I was
about to make. He has referred to one particular response that we
received on extending the civil recovery period from 12 to 20 years,
but a significant number of people responded by saying that there
should be no limit on the period in which we seek to recover assets.
Again, a judgment has been made. We received evidence from SOCA and law
enforcement of some cases that have been time barred, so we thought it
appropriate to extend the time period from 12 to 20
years. 12
pm To
return to my earlier response to the hon. Gentleman, he will know
better than me the process in court, but as far as I see it, the rights
of defendants in court are always protected as far as possible by the
court. Enabling defendants to defend themselves, particularly in civil
proceedings, is one of the measures that the court adopts to ensure
that a fair trial takes place. I understand the point that the hon.
Gentleman makes about the full power of the state being used as against
the rights of an individual to protect themselves.
A court is a
public authority for the purposes of the Human Rights Act. It has to
ensure, as a matter of principle, that a fair trial can take place. I
should have thought that the fact that that is laid out will ensure
that there is a fair trial, even when we have extended the civil
recovery powers from 12 to 20 years. Although the hon. Gentleman tries
to equate the criminal law with the civil law, as I understand it they
are significantly different. Therefore the civil recovery process is a
different process from the criminal process and so the time periods
will be decided upon in the appropriate
way.
James
Brokenshire: While the Minister is right to say that there
is a distinction between civil and criminal law, the issues overlap to
a certain extent as we go into this sort of area. Is he prepared to
think about recovery on criminal proceedings, given that there does not
seem to be a level playing field here? It is being extended on one side
on the same or similar subject matter, yet the criminal law seems to
have an earlier limitation period which, on his line of argument, seems
less supportable
now.
Mr.
Coaker: I will always consider things. I have become more
of an expert on the civil law than the criminal law and more of an
expert on all sorts of different laws since I have had this position. I
have never studied law and nor am I likely to. I understand the term is
a pupil barrister and I am very much a pupil. I will consider the point
that the hon. Gentleman has made. This is an important provision. There
have been problems with the limit and this is a sensible way
forward. Clause
43 amends the Limitation Act 1980 and its equivalents in Scotland and
Northern Ireland in order to extend the limitation period in which
civil recovery proceedings may be brought for the recovery of the
proceeds of unlawful conduct under chapter 2 of part 5 of the Proceeds
of Crime Act 2002. The clause will enable civil recovery proceedings to
be brought within 20 years from when the original property was obtained
through unlawful conduct, rather than 12 years as at present. The
limitation period applies from the date on which the cause of action of
the relevant enforcement authority, for example SOCA, accrued. The date
is the date on which the property was obtained through unlawful
conduct.
The civil
recovery scheme for the recovery of the proceeds of crime, which was
introduced in the Proceeds of Crime Act, has been running successfully
now for around six years. Not surprisingly, the new scheme got off to a
slow start as cases and the new legislation were tested in the courts,
but the Assets Recovery Agency successfully saw off the legal
challenges and we now have a robust scheme in place.
Civil
recovery is a powerful tool in attacking criminal finances. That is
why, when we merged the key functions of the Assets Recovery Agency
into SOCA, we took the opportunity in the Serious Crime Act, which the
hon. Gentleman and I also had the pleasure of debating, to give civil
recovery powers to a wider range of authorities, including the Director
of Public Prosecutions and the director of the Serious Fraud Office.
The Serious Fraud Office had an early success in the use of these
powers with the obtaining of an order of £2.25 million last
October, which has been paid.
The experience
of civil recovery over the last few years has shown that a 12-year
limitation period for bringing proceedings has allowed some potentially
recoverable property to go untouched, as the enforcement authorities
are prohibited from taking any action. Civil recovery powers are
increasingly being used to tackle serious organised crime, which by its
very nature frequently goes back further than 12 years, and there are
career criminals whose serious criminality can last much of their adult
lives. In addition, large-scale international corruption can go back
decades, and if civil recovery is to be used to recover assets stolen
by corrupt regimes, as envisaged by the World Bank and other
international partners, we will have to go back further than 12
years.
We did
consult on extending the 12-year limit in civil recovery cases as part
of a wider asset recovery action plan. A large majority of the
respondents favoured an extension of the time limit, with some calling,
as I have told the hon. Gentleman, for it to be removed altogether. The
clause seeks to address those views by extending the limit to 20 years.
Subsection (2) will apply the 20-year limit to causes of action
accruing within 12 years of commencement, which is an
important point. In other words, causes of action falling within the
existing 12-year limitation period will be subject to an additional
eight years in which they are actionable in the future. That will
capture those whose property is already liable to civil proceedings
under the current 12-year period by prolonging the time for bringing
proceedings. It will also cover future cases in which the cause of
action accrues more than 12 years after commencement, and those cases
will also have the 20-year limitation period. Those cases in which the
12-year limit has already expired will remain time-barred and will not
be reactivated. I believe that that is a proportionate measure to
recover assets acquired through unlawful
conduct. Question
put and agreed
to. Clause
43 accordingly ordered to stand part of the
Bill. Clauses
44 and 45 ordered to stand part of the
Bill.
Clause
46Forfeiture
of detained
cash Question
proposed, That the clause stand part of the
Bill.
James
Brokenshire: I will raise one general point of principle
and then some more general queries. The point of principle is that
clause 46 gives a new power of what might be termed
“administrative forfeiture” without the need for a court
order. An important principle is being set out: in essence, the state
can order the forfeiture of assets without going to court. That might
be convenient for law enforcement and SOCA, but it will erode a
fundamental principle of the law on property rights. If it is argued
that in some way that is about cost, administrative convenience, access
to the courts and timing, those arguments have to be balanced against
the principle of the existing requirement for the state to go to court
to obtain an order to get the forfeiture of assets in those
circumstances. That concept and the need for due process to be seen to
be done—a court being seen to be the body that actually uses the
power—is important for the way in which we organise ourselves
and for the sort of society we want. The Minister needs to come up
with a clear and persuasive case for why that balance should not be
adhered to and why those powers are so necessary and appropriate that
the Government have to go against the current requirement for a court
application to use powers of forfeiture and instead go through this
process of administration.
On the use of
forfeiture and the performance of the relevant agencies more generally,
the Minister will know that we have had various debates and discussions
before about the historical performance of the Assets Recovery Agency
and the fact that it did not meet its targets, which in many ways was
why it was merged into SOCA. The key questions are about how SOCA is
performing, whether it is using those and other powers appropriately,
and whether its recoveries exceed its costs, because that was the big
problem with how the Assets Recovery Agency operated. That agency had
to be changed because although it had recovered £23 million by
December 2006, it had cost the taxpayer £65 million. The
Minister will be aware of the reports of the National Audit Office and
the Public Accounts Committee highlighting the weaknesses in the Assets
Recovery Agency and how it conducted its business. We need to know that
there will be some transparency in how SOCA uses those powers and how
it performs financially, because it is sometimes difficult to read from
SOCA’s annual report how it is performing and what level of
recoveries, forfeitures and financial assets it has managed to recover
when using such powers. Will the Minister reassure the Committee that
SOCA will publish financial information on its asset recovery function
showing its net recoveries using those powers?
The old ARA
used to provide such information, and the Minister’s colleague,
the Under-Secretary, has provided me with parliamentary answers on this
subject, for which I am grateful, but it is important to know about net
recoveries—costs against assets recovered—if we are to
understand and scrutinise SOCA appropriately. Similar information that
was previously obtained about the ARA flagged up the problems on which
the NAO and PAC reported, so it is important to understand that SOCA is
acting appropriately and is not in the unfortunate position in which
the ARA found itself of having higher costs than recoveries from
forfeiture and recovered assets. We need that assurance not only to see
how powers are being used, but to be sure that SOCA is delivering value
for money when utilising those and other
powers.
Mr.
Coaker: Cases in which people contest these matters will
go to court. Only in uncontested cases can a forfeiture order be made.
If someone receives a notice saying, “You are going to forfeit
this detained cash,” all they have to do is say, “I
object,” and it will become a matter for the courts. One would
suppose that if someone thought, “My goodness, the state is
taking money that is legally mine—money that I have worked for
all these years and that I have saved for my retirement,” they
would object. If the police had detained someone’s money, and
they received a letter telling them that it would be forfeited unless
they objected, 99.9 per cent. of the population would say, “Hang
on, that money is legally mine; I’m going to object,” and
it would become a matter for the courts.
People do not
have to prove anything for their case to go to court. They do not have
to prove that the money is theirs or that it is not criminal money;
they have only to say, “I object to forfeiting this
money,” and it becomes a matter for the court. Which people
would not do that? That is the question is it not? Who would not say to
the court, “I object to you detaining my money,” if
£10,000 of their money was being held and was going to be kept?
Does anyone honestly expect that that person would not ring up the
court and send them a note saying, “Excuse me, I object”?
Who would not do that? That question answers itself. The people who
will not do that are those who think, “Hang on a minute, I
obtained this money illegally or criminally.” The question the
hon. Member for Hornchurch did not answer is, if money is taken from a
person and detained and they know that it was gained honestly and
legally, why would they not tell the person who takes it that it is
legally theirs? There must then be a court hearing. Why would anybody
not reasonably do that? The vast majority of the population would be
amazed to think that anybody who has money legally would not object to
somebody taking it from them. If it was my money, there would be a
letter in the post straight
away. 12.15
pm
James
Brokenshire: I hear what the Minister says, but he is
making various assumptions in saying that a person who gains money
legally will always object. He said that the vast majority of those who
do not object will be criminals or those who know they have received
money unlawfully. However, there may be circumstances in which that is
not the case. Somebody in receipt of such a notice might not fully
appreciate its nature and ambit and that forfeiture will arise. That
could happen regardless of what is stated in the provisions on the
right to challenge such a
notice. I
caution the Minister about making the administrative convenience
argument. Why should there not be a simple obligation on the relevant
authorities to obtain the necessary order from a court and be done with
it? I want to understand why it is felt that the route in the clause is
better. There is a broader issue of principle because the proposal sets
certain precedents. That is why I am not just focusing on the specifics
of the
clause.
Mr.
Coaker: I understand the hon. Gentleman’s point, I
just do not agree with it. I rarely say that I just do not agree with
people. There is a process and the clause is about speeding up that
process and not wasting the court’s time, while ensuring that
the power is used in a necessary and proportionate
way. When
I went through the Bill I ensured that it contained all sorts of
safeguards. If someone receives a forfeiture notice saying that this
mythical £10,000 will be detained and held by the state, there
are 30 days in which they can object. If they do so, there will be a
court hearing. If the court decides that the forfeiture notice should
become an order, there is another 30 days in which to
object—that is 60
days. In
exceptional circumstances, the person can go to the court and put the
case made by the hon. Gentleman. They could say, “I’m
sorry, I live in Spain. I come back to my place in the UK every three
months and, goodness me, when I returned I found a notice in my letter
box
saying that I will lose £10,000.” Being an honest person,
they might ring the court and say, “The exceptional circumstance
is that I forfeited the money while I was in Spain. How was I supposed
to know?” The Bill will give that person the right of appeal to
the court to say that there were exceptional circumstances for running
out of time. Because they were in Spain for three months, they can go
to the court and it can set aside the
order. There
have been many debates on this provision on real issues. I understand
the point about traditional oversight and such things. However, on this
issue, the only people with anything to worry about are those who have
obtained cash criminally, had it detained and as a consequence will
forfeit it unless they follow due process. The clause is an important
part of the Bill. I would have hoped that the judicial oversight, the
additional time available and the appeal would have been sufficient,
but I have clearly failed to convince the hon. Gentleman of that. We
have tried to build in the necessity to ensure that more cash is
forfeited with judicial
oversight.
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