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Third party interests and confiscation proceedings

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The Serious Crime Act 2015 was introduced to ensure that the National Crime Agency, the police and other law enforcement agencies have the powers they need to pursue, disrupt and bring to justice those engaged in serious and organised crime. 

The new act has been in force since 1st June 2015 and also amends the Proceeds of Crime Act 2002 in relation to confiscation proceedings. In particular the way courts deal with determining third party interests in property in which the defendant also has an interest is changing.

The previous position had been that third parties had no right to make representations in relation to their interest in property during the defendant’s confiscation proceedings. They could only become involved if they appeared as a witness called by the defendant.  Alternatively, they could make representations at the enforcement stage of the proceedings. This was once the confiscation order had already been made, the amount due remained outstanding in full or in part and the prosecution had applied to court for the appointment of an enforcement receiver to sell the defendant’s available assets so that the order could be satisfied.

The position has changed in that third parties now have a right to be represented. This means that third party interests can be taken into consideration at a much earlier stage in confiscation proceedings. But as ever with confiscation, the position is not as clear cut. The right to make representations is triggered by the court and not the third party themselves.

The new provisions under the Proceeds of Crime Act 2000 state that where it appears to the court that a third party holds or may hold an interest in the property in question and thinks it appropriate to do so, it can determine the extent of the defendant's interest in the property at the time the confiscation order is made. However, the court can only do so if it has given a third party an opportunity to make representations. 

To allow representations to be made, the court may order a third party to give it information specified in the order. The order may require the information to be given in a specified manner and before a specific date.   

If a third party receives an order from the court requesting information in relation to property and they fail to reply or reply within the specified time limit, the court can make whatever inferences it believes are appropriate. A court may then make a confiscation order which does not take into consideration the interests of the third party. The grounds to appeal against the order are limited in cases where a third party was given the opportunity to make representations and failed to do so. 

The court’s determination will be conclusive in most circumstances. For example, the court’s determination in confiscation proceedings will override a greater claim made subsequently in family courts by a defendant’s partner. This may have the effect of making confiscation proceedings even more complex. 

If you are a third party involved in confiscation proceedings it is vital that you seek specialist advice. Our team at Stephensons has expertise in all areas pertaining to proceeds of crime and financial asset recovery.

By Priscilla Addo-Quaye, serious fraud & business crime solicitor