Recovering the Proceeds of criminal activity by using a criminal prosecution can be expensive and the standard of proof is high. The alternative is to initiate Civil Recovery Proceedings. Although HM Revenue and Customs have had powers to forfeit goods for many years, general provisions of civil recovery were introduced by Part 5 of the Proceeds of Crime Act 2002. The Part 5 powers can be used by the Serious Fraud Office and The Crown Prosecution Service (incorporating the HM Revenue and Customs Prosecutions Office).

Summary

Part 5 of the Proceeds of Crime Act enables enforcement authorities to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct. It also enables them to seize and forfeit cash which is, or represents, property obtained through unlawful conduct, or which is intended to be used in unlawful conduct. The powers conferred by Part 5 are exercisable in relation to any property (including cash) whether or not any proceedings have been brought for a criminal offence in connection with the property.

"Unlawful conduct"?

Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part. Conduct which occurs in a country outside the United Kingdom and is unlawful under the criminal law of that country, and if it occurred in a part of the United Kingdom, would be unlawful under the criminal law of that part, is also unlawful conduct. The court must decide on a balance of probabilities whether it is proved that any matters alleged to constitute unlawful conduct have occurred, or that any person intended to use any cash in unlawful conduct.

"Property obtained through unlawful conduct"?

A person obtains property through unlawful conduct (whether his own conduct or another's) if he obtains property by or in return for the conduct. In deciding whether any property was obtained through unlawful conduct it is immaterial whether or not any money, goods or services were provided in order to put the person in question in a position to carry out the conduct. It is not necessary to show that the conduct was of a particular kind if it is shown that the property was obtained through conduct of one of a number of kinds, each of which would have been unlawful conduct.

When might Civil Recovery Proceedings be issued?

According to guidance issued by the Home Secretary and the Attorney General;

  • Criminal prosecution must be considered first.
  • If the case does not meet the criteria for prosecution (evidential sufficiency + public interest), then civil recovery can be considered.
  • In deciding whether the public interest criteria is met for prosecution, SOCA/the prosecuting authorities are entitled to take the view that the public interest is better served by civil recovery proceedings.
  • A criminal investigation does not need to be completed before civil recovery can be considered.
  • A criminal investigation / prosecution can continue in tandem with a civil recovery investigation, but criminal and civil proceedings cannot be carried on at the same time in relation to the same criminality.
  • A prosecution which fails can still result in civil recovery.
  • Civil settlements may be entered into to compromise civil recovery proceedings, but a potential defendant cannot buy his way out of prosecution by making a civil payment; if the case justifies a prosecution, criminal proceedings should be brought.

What should I do if I am facing civil recovery proceedings?

The part 5 provisions are quite different from those in confiscation proceedings brought under part of the Proceeds of Crime Act 2002. Recognizing those distinctions is critical in defending those against whom the proceedings have been taken. Talk to the lawyers who know the Proceeds of Crime Act in depth and who can give you sensible advice in cases which can have an enormous impact on a business or individual.

We can assist at the investigation and proceedings stage. This can include advice on the gathering of evidence, representation at court or negotiating with the prosecuting authority.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.