A woman walks into a jeweller’s shop and pockets a ring worth £10,000. As she leaves, she is arrested by store detectives. They retrieve the ring. The woman is prosecuted and convicted of theft. Even though the ring has been recovered the court makes a confiscation order against her for £10,000. Where is the justice in that?

This question was posed recently by Lord Phillips of Worth Matravers in a trilogy of appeals heard by the House of Lords: May, Jennings and Green. It is typical of the issues thrown up by confiscation. This involves seizing the proceeds of crime of a convicted offender. It sends a message that crime does not pay. Confiscation is one of the fastest-growing and most controversial areas of criminal law. In April 2007 to February this year alone the courts in England and Wales made 4,054 confiscation orders for a total of £225.87 million.

“Confiscation” is a misnomer. The court will ask whether the offender has benefited from his criminal conduct. If so, it will make an order for the value of the benefit so obtained, subject to the offender’s ability to pay. This creates a statutory debt that may be enforced against any of the offender’s assets, whether or not they are the proceeds of crime. The offender cannot evade a confiscation order simply because, say, the property he stole has been recovered. That is what gave rise to Lord Phillips’s question. Parliament intended confiscation to be draconian. That is why it is controversial.

Criminal confiscation today is governed by the Proceeds of Crime Act 2002. It was previously governed by the Criminal Justice Act 1988 and the Drug Trafficking Act 1994. Similar principles apply under all three statutes and there is a common body of case law.

Unfortunately, the meaning of key terms is not always clearly defined in the relevant statutes. For example, what is meant by “obtaining” a “benefit”? This question, which is of central importance in criminal confiscation, is what fell to be decided in Jennings. May and Green dealt with a subsidiary issue. Although Jennings was an appeal under the old legislation, the answer would apply equally to cases under the new legislation.

Paul Jennings, of Heald Green, Greater Manchester, had appealed against the refusal of the lower courts to discharge a restraint order made in November 2004. This was an order restraining him from dealing with his assets while he was awaiting trial for conspiracy to defraud. The conspiracy was an “advance-fee” fraud. It was carried on through a company called UK Finance (Europe) Ltd. The company offered to arrange loans to people with low credit ratings in return for administration fees of £70. The company had no money to lend and no loans were ever made.

Jennings was convicted at Manchester Crown Court in June 2005. In July he was sentenced to five years’ imprisonment. The court was awaiting the outcome of the appeal before proceeding to a confiscation hearing.

Jennings claimed that the restraint order should have been for no more than £50,000 as this was all that he had got from the crime for himself. He argued that this was the only property that he had obtained as this was the only property that had come into his possession or control.

The prosecution alleged that he had obtained £580,000. This was the total amount obtained as a result of the conspiracy. They argued that even applying a possession or control test, Jennings had obtained this amount as he was a prime mover in the conspiracy. But they also relied on the test given by the Court of Appeal — that all that was required was that the defendant’s acts should have contributed, to a non-trivial extent, to the getting of the property from the crime.

The House of Lords rejected the Court of Appeal’s approach, although it found that there was clearly enough material to support the making of a restraint order. It held that in order for a person to obtain property it must be obtained by him. It would not suffice if he helped someone else to obtain it. This must “ordinarily” mean that he has obtained property so as to own it, whether alone or jointly. This will “ordinarily” connote a power of disposition or control, as where a person directs a payment or conveyance of property to someone else.

A problem here is the concept of “ownership”. Take the example of the woman who stole the ring. She did not “own” the property she had stolen. If she had managed to escape with the ring she would have had a right to possession, but this could have been displaced by someone with a better title, such as the rightful owner. Did the law lords really intend that thieves should be exempt from confiscation orders? That would be a surprising answer to Lord Phillips’s question, “Where is the justice?” The position is now uncertain. This uncertainty gives comfort to thieves and invites further litigation. It means that the woman who stole the ring may be liable to a confiscation order. But then again, she may not.

The author is a member of Furnival Chambers. He was junior counsel for the Crown in the appeal in Jennings

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