It is widely accepted and understood that those convicted of fraud or drug dealing should not benefit from their criminal activities. The Proceeds of Crime Act 2002 (POCA) is the tool used by prosecutors and the courts to ensure such offenders forfeit their ill-gotten gains.
Less well known, however, is the increasing use of POCA to recover the value of any benefit gained through the commission of a much wider range of regulatory offences.
The Crown Court has a duty to impose a confiscation order on a Defendant convicted or sentenced of any crime in the Crown Court, when so asked by a prosecutor, or where the court itself feels such an order is appropriate. The order will require the Defendant to forfeit any incidental, deliberate or non-deliberate benefit gained from its criminal conduct - in addition to any fine and costs imposed.
The Environment Agency (EA) has obtained at least 10 confiscation orders to date, particularly against Defendants convicted of offences relating to illegally deposited waste. These orders are often substantial and can be significantly more than the fine and costs orders imposed. Instances where such orders have been made include:
- Where the illegal burying of waste in contravention of a waste management licence took place. Following a fine and costs order of £83,967 against the company, £1,194,638.00 was confiscated under POCA
- Where profit was made while a business operated in breach of environmental regulations. £917,000.00 was forfeited under POCA
- And in April this year, where there was an illegal waste site operation the EA obtained a fine and costs order of £48,000 and a POCA forfeiture of £207,000
It is not just the EA which has sought confiscation orders. In 2007, operators of an illegal car park were ordered to forfeit £760,000.00 where they failed to comply with a local authority enforcement order requiring the unlawful use of land to cease. The Court of Appeal approved the words of the trial judge in that case:
"The law...is plain. Those who choose to run operations in disregard of planning enforcement requirements are at risk of having the gross receipts of their illegal businesses confiscated... In this respect they are in the same position as thieves, fraudsters and drug dealers..."
POCA forfeiture orders are also being considered by the Health and Safety Executive.
We anticipate that where a breach of health and safety regulations has enabled part of a business to continue when it would not have done so without that breach, it will not be long before profit generated in that period may be at risk if there is a subsequent prosecution determined in the Crown Court.