04 February 2020
Prosecutors are struggling to recover the ill-gotten gains of criminal activity because the law is ‘unfair and unfeasible’, researchers say
An investigation by the White Collar Crime Centre, the research arm of law practice Bright Line Law, found that fewer than 20 confiscation orders were made against companies, organisations or other non-person defendants in the two years between June 2015 and June 2017. Moreover, not all the orders had been satisfied.
The low rate for confiscation orders contrasts sharply with the rise in corporate criminal prosecutions. Average fines also increased, from £50,713 in 2007 for non-person defendants to £246,245 in 2017 .
The Law Commission is due to produce a consultation paper on the issue, ‘Confiscation under Part 2 of the Proceeds of Crime Act 2002’, early this year.
Financial crime barrister Jonathan Fisher QC (pictured), of Bright Line Law, urged the Commissioners to be ‘radical’ in their recommendations and called for the introduction of enforcement tools such as corporate probation to encourage companies to comply with confiscation orders.
‘First, the current method for calculating the amount to be confiscated is highly artificial and divorced from the actual financial benefit flowing from the crime,’ Fisher said.
‘Confiscating gross sales rather than net profits from companies gratuitously punishes innocent shareholders whilst running the risk of driving otherwise productive and socially viable companies out of business.
‘Second, the big stick for enforcing confiscation is imprisonment and since a company cannot be sent to prison, compliance is voluntary. If a confiscation order is ignored, it makes far more sense for the court to put the company “on probation” by appointing a trustee to run the company, or in extreme cases, to liquidate it.’
The findings were published this week, in a paper titled ‘Proceed with Caution: The case for a Narrowly Tailored Corporate Confiscation Scheme in the UK’, by Vanessa Reid, former US attorney now at Carmelite Chambers.
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