UK: Planning And The Proceeds Of Crime

Last Updated: 25 July 2019
Article by Annika Holden and Matthew White

The term “proceeds of crime” tends to conjure up images of popular HBO crime dramas and 1950s gambling rings. It certainly doesn’t tend to be associated in most people’s minds with subdivision of flats without planning consent.

But it should be. Southwark Council have recently won a £1.2m proceeds of crime confiscation order from a landlord who converted three flats in London Bridge into 20 studios and bedsits without planning permission (see here for Southwark’s press release). Southwark Council originally prosecuted the landlord in 2010, following which he was fined and ordered to reinstate the property to its original condition. The landlord failed to comply with this order and further charges were brought in 2017. The Council conducted an investigation into the rent that the landlord obtained by renting out the studios, and successfully sought a compensation order for that amount, which it regarded as a criminal benefit. The landlord has three months to pay this amount, with the prospect of a lengthy jail sentence if he fails to pay.

What does this mean for developers?

Most developers will be aware that it is not automatically a crime – though highly inadvisable – to carry out development without planning permission. It is, however, open to the planning authority to take enforcement action in respect of any unauthorised development and it is then a criminal offence to fail to comply with that enforcement action. Fewer developers may be aware that failure to obtain what are often perceived as more “minor” consents – such as highway consents, advertising consent or listed building consent (even if making a minor alteration) – is an automatic criminal offence. It is also an automatic criminal offence to demolish in a conservation area without planning permission.

And, wherever there is a criminal offence, the Proceeds of Crime Act 2002 (“POCA”) could potentially come into play, allowing the planning authority to secure a confiscation order at the same time as a planning prosecution. This follows a Court of Appeal ruling in R v Del Basso [2010] EWCA Crim 1119 that confiscation orders can be sought in planning cases. POCA entitles the local authority to apply for an order to recover an amount equivalent to the benefit gained from the criminal conduct in question. So, this could amount to, for example:

  • In the case of a failure to comply with a planning enforcement action – the rental income in respect of the unauthorised development (as in the Southwark case);
  • In the case of a failure to obtain advertising consent – an apportionment of the additional revenue that results from the illegal advertisements (although establishing the value of the benefit here would be more challenging).

The Del Basso case concerned a park and ride business that was run in breach of planning control. The entire business was therefore founded on a criminal act, rather than there being an isolated incident in the course of a very much larger business. It also involved a deliberate decision to ignore enforcement action when it was taken by the planning authority. However, the Judge’s comments in the Crown Court, which the Court of Appeal agreed with, are worth repeating:

“I conclude with a final observation about the mentality of the [appellants] and other similar law breakers. I have received the strong impression that neither the [appellants] nor ... their accountant appreciated fully the risk that the companies and individuals involved in the park and ride operation faced from confiscation proceedings. They have treated the illegality of the operation as a routine business risk with financial implications in the form of potential fines or, at worst, injunctive proceedings. This may reflect a more general public impression among those confronted by enforcement notices with the decision whether to comply with the law or to flout it. The law, however, is plain. Those who choose to run operations in disregard of planning enforcement requirements are at risk of having their gross receipts of their illegal businesses confiscated.”

Since Del Basso, there have been a number of successful prosecutions in enforcement cases where, in addition to the standard fines, a confiscation order has been made. This may be motivated by the fact that of 37.5% of the funds from successful prosecutions under the Act go directly to the planning authority. In times of budgetary pressures on planning authorities, there are an increasing number of examples of them resorting to every weapon available to boost revenues and disincentivise bad behaviour.

It is not unusual for developers to pay a great deal of attention to ensuring that they get the initial planning consent exactly right, only for those aspects of a scheme which are perceived to be more “minor” or routine – such as advertising consents, highways licences, or listed building alterations – to fall by the wayside during the delivery phase. Developers may not appreciate that failure to obtain such consents, or to comply with the conditions of such consents, is automatically a criminal offence and can have severe consequences, including large financial penalties. The Southwark case is only the latest example of the importance of ensuring that your legal and consultant team are engaged throughout the delivery phase to ensure that you are obtaining the right consents at the right time, and complying with them.

Put simply, if you are considering working on the highway, putting up an advertisement or altering a listed building, a phone call to your lawyer to understand the process before doing so may ultimately save your money, stress and reputation in the long run.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions