|Proceeds of Crime Bill
The Chairman: Order. To which amendment is the hon. Gentleman referring?
Mr. Hawkins: No. 593.
The Chairman: In that case, the hon. Gentleman is out of order. Amendment No. 593 belongs to another group of amendments.
Mr. Hawkins: I am sorry.
Column Number: 1266
Mr. Ainsworth: Forgive me, Mr. Gale, I was not trying to deflect from the importance of the provisions. It is just that we have so little time in which to discuss part 9. The Opposition have not tabled amendments to the other clauses, but there may have been clauses that they wanted light on as we moved through this part of the Bill. I flagged up that issue to the hon. Member for Beaconsfield to make him aware of the amendments and their broad intent. I shall first explain their purpose.
Part 9 deals with when the same property could be affected simultaneously by confiscation and insolvency proceedings. It makes it clear when confiscation proceedings take precedent and when insolvency proceedings take precedent. Among other things, it helps to avoid the uncertainties that may arise if two receivers—one confiscation and one insolvency—were simultaneously in post at the same time.
We have discovered that the arrangements are flawed. The hon. Gentleman said he was surprised that so many amendments were tabled. He will see that this part of the Bill is repetitive. Therefore, one change would lead inevitably to a multiplicity of amendments. We are dealing with circumstances in which property is excluded from a bankrupt's estate and there is no way of putting it into the bankrupt's estate if it ceases to be excluded at a later date.
For the benefit of the hon. Member for Spelthorne, I shall cite a couple of examples of the problem. If a restraint order were made in confiscation proceedings, the property concerned would not form part of the bankrupt's estate. A bankruptcy order might be made while the restraint order was still in force. The restraint order would then be discharged because the defendant had been acquitted or for some other reason. Under those circumstances, the restrained property would be returned to its owner. It would not form part of the bankrupt's estate, because it did not do so when the bankruptcy order was made. The result is that the creditors would have lost out. We would have bypassed them and handed the money back to the original owner, thus rendering the bankruptcy proceedings useless in respect of the property that was subject to the confiscation or restraint order.
Another example of the same problem is when a person is convicted and a confiscation order is made. A receiver is appointed before a bankruptcy order is made, so that confiscation has the first call on the property. A bankruptcy order is made. If the receiver has spare property left over after the confiscation order has been fully enforced, once again it is excluded from the bankrupt's estate and must be returned to the owner, not the creditors. I do not believe that Conservative Members would want that to happen. To prevent such action and rectify the flaw, three separate sets of amendments are needed to the Bill because of it repetitive nature. We have also taken the opportunity under the amendments to remove some unnecessary duplication from the clauses. I am sorry that there are so many of them, but that is inevitable because of the Bill's structure.
Column Number: 1267
Mr. Wilshire: I fully support the Minister's points. I hope that I made it clear that I was not trying to water the measures down. I was concerned not about whether there was a technicality, but about the delay in getting the money into the bankrupt's estate and ensuring that it is there for genuine creditors.
Mr. Ainsworth: The delay will not always be avoidable. Obviously, it will be unwelcome, but the moneys will be under restraint and the procedure must take its course. The important thing is that, if the restraint order fails, the creditors are treated appropriately and we have not circumvented the bankruptcy order. Any delay is regrettable, but I do not see how it could be avoided in all circumstances.
Mr. Wilshire: My argument is that the Minister should find a way to ensure that a delay does not occur. Whether the money goes to the creditor or the Crown, on the basis of the Bill the person who had the money as the proceeds of crime has lost it. Does the Minister agree that it does not matter in which direction the money goes? It matters only to the creditor, and a delay is unacceptable.
Mr. Ainsworth: Which way the money goes seriously matters. If bankruptcy or insolvency proceedings start and the restraint is already in place and that restraint subsequently fails, it would be wholly inappropriate if the money were then passed back to the original owner and creditors were deprived of what was rightfully theirs. The hon. Gentleman says that we should find a way of ensuring that there cannot be any delay, but I am not sure to what extent we could speed up, without prejudicing justice, the operation of the restraint and confiscation procedures. One would want those to be as quick as reasonable, but they cannot be waved away.
Mr. Mark Field (Cities of London and Westminster): I have a lot of sympathy with the situation in which the Minister finds himself. During my brief and less than glorious legal career, I had some experience of insolvency. One great difficulty facing the Government is that there will be an inevitable rush with the confiscation order, which could roughly coincide with insolvency being called and the receiver being brought in. Nothing would be more unjust than the sheer coincidence of one event happening before the other and a matter of two or three days making a profound difference to the position of creditors. At this stage and perhaps later, there will be a need to think through all implications and ensure that there are more amendments to make this right.
My hon. Friend the Member for Spelthorne made an important point. The interests of innocent third parties should first and foremost be looked after as much as possible. I appreciate the Minister's comments on time delays. Once the matters are in the hands of a receiver, it is extremely difficult for the court to jolly the pace along, as we are seeing with Railtrack at the moment. I hope that he will give some thought to that.
Mr. Ainsworth: You must be tired after your earlier activities, Mr. Gale. I have never known anyone else get away with an intervention of that length.
Column Number: 1268
The amendments are the only way in which we will be able to avoid creating a massive loophole. If we give precedence to insolvency proceedings over restraint, we will end up with sham insolvencies to prevent confiscation. I do not see how we can structure the Bill any differently and still prevent that loophole. We want the measures to operate as quickly as possible and we do not want unnecessary delays, but they will be inevitable on occasion. The amendments will ensure that, if the restraint order is not successful at the end of the day, the money will go to the appropriate place and not necessarily back to the original owner.
Amendment agreed to.
Amendments made: No. 564, in page 229, leave out lines 12 to 14.
No. 565, in page 229, line 18, leave out from 'which' to end of line 19 and insert—
No. 566, in page 229, leave out lines 20 to 22.—[Mr. Bob Ainsworth.]
Clause 402, as amended, ordered to stand part of the Bill.
|©Parliamentary copyright 2002||Prepared 29 January 2002|