New reforms to recover millions more from the proceeds of crime

• Law Commission publishes recommendations to make confiscation orders more effective – taking more illegal gains out of the hands of offenders.
• Ineffective system for recouping criminal gains has led to a total debt of £2bn in unrecovered funds.
• Reforms would mean vast improvements to the current regime, making the process for recovering proceeds faster, fairer, and more effective – with more compensation for victims.

The Law Commission of England and Wales has today [Wednesday 9 November] unveiled new reforms to overhaul the system for recovering the proceeds of criminal activities. 

The reforms, which are the culmination of a Home Office-commissioned review, would enhance enforcement powers and could lead to the recovery of millions of pounds of additional funds from offenders each year.

A “confiscation order” is a court order made personally against a defendant, compelling them to pay back some or all of the benefits from a crime they have committed, so that the proceeds are returned to the public.

While in some cases the system has been able to recover proceeds and support victims, there is strong consensus that the current regime is inefficient, complex and ineffective – with weak enforcement mechanisms restricting its ability to consistently recover criminal funds. 

The Law Commission’s new reforms would bolster the current system, by giving courts more powers to enforce confiscation orders and seize offenders’ assets, limiting unrealistic orders that can never be paid back, and speeding up confiscation proceedings – allowing victims to receive compensation more quickly.

The Commission estimates that reforming the current confiscation regime could lead to an extra £8 million in funds being retrieved from criminals in England and Wales every year, helping to return more money to the public.  

Commenting on the new confiscation reforms, Professor Penney Lewis, the Law Commissioner for Criminal Law, said:

“The current system for recovering the proceeds of crime is ineffective and letting down victims and the public.

“Our reforms would make critical improvements to the current confiscation regime, allowing for millions more in funds to be successfully recovered from those who make illicit gains.

“By boosting enforcement powers, imposing more realistic and fairer orders, and speeding up proceedings, we can ensure greater public confidence in the system, and send a strong message that crime doesn’t pay.” 

Recommendations from the Law Commission

Reforms to make the confiscation regime faster, fairer and more effective.

• Accelerate confiscation proceedings by establishing strict timetables for hearings, which take effect immediately after the defendant has been sentenced for their crime.
• Give courts the power to impose “contingent enforcement orders” at the time that a confiscation order is made, meaning that if a defendant does not pay back the proceeds of a crime within a set time, assets – including property or funds in a bank account – could instead be taken to recover the proceeds of crime.
• Strengthen “restraint orders”, which can be imposed by a court to stop a defendant from protecting funds or assets that might later be involved in confiscation proceedings. Place the “risk of dissipation” test – the test currently used by courts to judge whether to use this order – on a statutory footing, and clarify what could trigger the use of these orders.
• Strengthen law enforcement agencies’ responses, through better police training and a national asset management strategy.

• Update the provisions that factor in a defendant’s “criminal lifestyle”, when assessing their benefit from crime. Confiscation from defendants deemed to have a criminal lifestyle will also include gains from their wider criminal conduct. We recommend that a defendant would have to commit fewer offences to be deemed to have a criminal lifestyle.

• Give greater consideration to the defendant’s ability to pay, so that enforcement can be more effective. Defendants will be obligated to provide clearer and more detailed evidence of their financial position if they claim to be unable to pay their order.

• Create more flexible tools to ensure better enforcement. Give judges the power to adjust the funds that must be paid back by a defendant, depending on their personal circumstances. This wouldavoid situations where there is no realistic prospect of recovering the full amount of the confiscation order.

• Set out a clear statutory objective to govern the new confiscation regime – namely, to deprive defendants of their benefit from criminal conduct. This would provide clarity on the purpose of the regime and move away from any prior emphasis on “punishment”.

* Access the report *

A summary of the report can be accessed under embargo here.

Background on the project

In 2018, the Home Office commissioned a Law Commission project with the objective of reforming Part 2 of the Proceeds of Crime Act (POCA) 2002. In 2020, the Commission launched a consultation and set out its provisional proposals for reform. Today, after consulting widely, its final recommendations are published. Visit the project page for more information.

Next steps

It is now for the Government to respond to our recommendations from the review.