Confiscation and Forfeiture [1994] SLC 147 (Report) (June 1994)

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SCOTTISH LAW COMMISSION

(Scot Law Com No 147)

Report on Confiscation and Forfeiture

Report on a reference under section 3(1)(e) of the Law Commissions Act 1965

Laid before the Scottish Parliament by the Scottish Ministers

Volume One

Presented to Parliament by the Secretary of State for Scotland by Command of Her Majesty

September 1994

Cm 2622

EDINBURGH: HMSO

£27.60 net

The Scottish Law Commission was set up by section 2 of the Law Commissions Act 1965 for the purpose of promoting the reform of the law of Scotland. The Commissioners are:

The Honourable Lord Davidson, Chairman
Dr E M Clive
Professor P N Love, CBE
Sheriff I D Macphail, QC
Mr W A Nimmo Smith, QC.

The Secretary of the Commission is Mr K F Barclay. Its offices are at 140 Causewayside, Edinburgh EH9 1PR.

SCOTTISH LAW COMMISSION

Report on a reference under section 3(1)(e) of the Law Commissions Act 1965

Report on Confiscation and Forfeiture

To: The Right Honourable Ian Lang, MP

Her Majesty's Secretary of State for Scotland

We have the honour to submit our Report on Confiscation and Forfeiture

(Signed)C K DAVIDSON, Chairman
E M CLIVE
PHILIP N LOVE
IAIN MACPHAIL
W A NIMMO SMITH

Kenneth F Barclay, Secretary

22 June 1994

Contents

	Paragraph
PART 1 - INTRODUCTION

The background to this report	1.1
Terminology	1.3
Scope of this report	1.4



A. CONFISCATION OF THE PROCEEDS OF CRIME

PART II - CONFISCATION: INTRODUCTION	2.1

The present law	2.2
The international context of confiscation legislation	2.8
Recommended policy	2.11
The nature of confiscation	2.14
An overview of our recommendations	2.18
Our recommendations, the Scottish Act of 1987 and
the English Acts of 1986 and 1988	2.22
Nature of the offence; court	2.24
Financial limits	2.25
Benefit	2.26
The amount that might be realised	2.28
Confiscation and other disposals	2.29
Procedure and evidence before order made	2.30
Variation of confiscation orders	2.31
Enforcement of confiscation orders	2.33
Preservation and realisation of property	2.34
Protection of third parties' rights	2.36
Reciprocal enforcement of confiscation orders	2.37
Death of accused before confiscation made	2.38



PART III - WHEN CONFISCATION SHOULD BE COMPETENT

Introduction	3.1
Nature of the offence	3.2
Courts entitled to make confiscation orders	3.5
Financial limits	3.7



PART IV - "BENEFIT" AND "THE AMOUNT THAT MIGHT BE REALISED"

Introduction	4.1
"Benefit"	4.2
Meaning of "benefit"	4.2
Valuation of "benefit"	4.5
Determination of the amount that might be realised	4.8
Meaning of "realisable property"	4.9
Valuation of "realisable property"	4.14
The offender's family home	4.15
Gifts	4.20
Valuation of gifts	4.23
Court's discretion not to take gift into account	4.26
Obligations having priority	4.31



PART V - CONFISCATION AND OTHER DISPOSALS

Introduction	5.1
Confiscation order not to be the only sentence	5.2
Disapplication of restrictions on combined orders	5.3
Stage at which order made	5.5
Confiscation and imprisonment	5.8
Confiscation, financial and forfeiture orders	5.12
Fines and other orders for payment	5.13
Forfeiture orders	5.15
Confiscation and compensation	5.17
Appeal against confiscation order	5.23



PART VI - PROCEDURE AND EVIDENCE BEFORE ORDER MADE

Introduction	6.1
Confiscation order on the motion of the prosecutor	6.3
Benefit: burden and standard of proof	6.5
Amount that might be realised: burden and standard of proof	6.11
Written statements	6.14
Hearing	6.21
Postponement of hearing	6.24
Form of the court's decision	6.28



PART VII - VARIATION OF CONFISCATION ORDERS

Introduction	7.1
Increase in benefit or realisable property after order made	7.2
Insufficient realisable property to satisfy order	7.12
No order made: benefit discovered	7.17



PART VIII - ENFORCEMENT OF CONFISCATION ORDERS

Introduction	8.1
Enforcement in the same way as fines	8.2
Enforceability of order after service of sentence of imprisonment in default of payment	8.3
Procedure at means inquiry court	8.6
Interest on unpaid sums	8.10



PART IX - PRESERVATION AND REALISATION OF PROPERTY

Introduction	9.1
Our recommendations in outline	9.3
General principles	9.4
The nature of a restraint order	9.6
"Dealing with" property	9.10
Conditions and exceptions	9.11
When a restraint order should be competent	9.14
Proceedings in progress	9.15
Before proceedings instituted	9.21
Prosecutor's applications after sentence	9.23
Procedure in applications for restraint orders	9.25
Variation and recall of restraint orders	9.26
Appeals	9.29
Ancillary powers	9.31
Interdict	9.32
Inhibition	9.33
Arrestment	9.35
Provisions applicable to inhibition and arrestment	9.36
Disclosure	9.38
Administrators	9.39
Sequestration, insolvency and related matters	9.42
Investigative powers	9.47
Disclosure of information held by Government departments	9.48
Disclosure by the accused	9.50
Offences	9.51



PART X - PROTECTION OF THIRD PARTIES' RIGHTS IN CONFISCATION PROCEEDINGS

International conventions	10.1
Provisions already discussed	10.2
Compensation	10.4



B. FORFEITURE OF PROPERTY USED IN CRIME

PART XI - FORFEITURE: INTRODUCTION

Our reference and the Laundering Convention	11.1
Definition of "forfeiture"	11.3
Objectives of forfeiture	11.4
The European Convention on Human Rights	11.5
The present law	11.6
The need for reform	11.7
Our recommendations in outline	11.8



PART XII - WHEN A SUSPENDED FORFEITURE ORDER SHOULD BE COMPETENT

Introduction	12.1
Courts which should have power to make a suspended
forfeiture order	12.2
Nature of property liable to forfeiture	12.3
Relationship between property and commission of offence	12.5
General rules	12.6
Road traffic offences	12.14
Other statutory offences	12.16
Notice of penalties	12.21
Conjunction of suspended forfeiture order with probation or
absolute discharge	12.23



PART XIII - THE MAKING OF A SUSPENDED FORFEITURE ORDER
Introduction	13.1
Application by prosecutor	13.2
Standard of proof	13.3
Judicial discretion	13.6
Presence of moveable property in court	13.7
Identification of property	13.10
Identification and notification of third parties	13.11
Registration of order relating to heritable property in Scotland	13.12
Compensation from proceeds of sale of forfeited property	13.13
Appeals	13.17



PART XIV - THE EFFECT OF A SUSPENDED FORFEITURE ORDER

Introduction	14.1
Interval between suspended forfeiture order and forfeiture	14.2
Perishable, dangerous, illegal or valueless moveable property	14.7
Responsibility for property subject to a suspended
forfeiture order	14.9
Disposal of forfeited property	14.10



PART XV - VARIATION AND RECALL OF SUSPENDED FORFEITURE ORDERS

Introduction	15.1
Application by prosecutor for variation	15.2
Application by third party for recall	15.3




PART XVI - SEARCH WARRANTS AND RESTRAINT ORDERS IN FORFEITURE PROCEEDINGS

Introduction	16.1
Warrants to search for and seize forfeitable property	16.4
The present law	16.4
Warrant where suspended forfeiture order made	16.5
Warrant where suspended forfeiture order liable
to be made	16.6
Restraint orders in relation to forfeitable property	16.9


PART XVII - PROTECTION OF THIRD PARTIES' RIGHTS IN FORFEITURE PROCEEDINGS

Introduction	17.1
The present law	17.2
Our recommendations	17.3
Recovery or compensation after forfeiture	17.5
The offender's family home	17.11



C. INTERNATIONAL CO-OPERATION

PART XVIII - RECIPROCAL ARRANGEMENTS FOR THE ENFORCEMENT OF ORDERS

Introduction	18.1
Confiscation	18.3
Enforcement in England and Wales of orders made in Scotland	18.3
Enforcement in Scotland of orders made in England and Wales	18.4
Northern Ireland	18.5
Enforcement in Scotland of orders made outside the United Kingdom	18.7
Enforcement outside the United Kingdom of orders made in Scotland	18.11
Forfeiture	18.14
Enforcement in England and Wales of orders made in Scotland	18.14
Enforcement in Scotland of orders made in England and Wales or Northern Ireland	18.15
Enforcement in Northern Ireland of orders made in Scotland	18.16
Enforcement in Scotland of orders made outside the United Kingdom	18.17
Enforcement outside the United Kingdom of orders made in Scotland	18.19



D. MISCELLANEOUS MATTERS

PART XIX - FORFEITURE OF PROPERTY WHERE THE ACCUSED HAS DIED

Introduction	19.1
Stage of proceedings	19.3
Range of offences; reasons why confiscation order cannot be made	19.4
The court and the order	19.9
The parties	19.10
Burden and standard of proof	19.11
Time-limits	19.18
Preservation of property	19.19
Protection of third parties' rights	19.21
Criminal Justice (Scotland) Act 1987, Part I	19.22



PART XX - THE LEGISLATION REQUIRED

The draft Bill	20.1
Subordinate legislation	20.9


PART XXI - SUMMARY OF RECOMMENDATIONS	Part XXI


Volume 2

A. Draft Proceeds of Crime (Scotland) Bill with Explanatory Notes	Appendix A
B. Part I of the Criminal Justice (Scotland) Act 1987 as amended to 1 May 1994 and as proposed to be further amended by the Draft Bill	Appendix B
C. List of Respondents to Discussion Paper No 82	Appendix C

Table of Abbreviations

Statutes

CJA Criminal Justice Act 1988, c 33

CJ(S)A Criminal Justice (Scotland) Act 1987, c 41

DTOA Drug Trafficking Offences Act 1986, c 32

NI(EP)A Northern Ireland (Emergency Provisions) Act 991, c 24

PT(TP)A Prevention of Terrorism (Temporary Provisions) Act 1989, c 4

1975 Act Criminal Procedure (Scotland) Act 1975, c 21

1986 Act Drug Trafficking Offences Act 1986, c 32

1987 Act Criminal Justice (Scotland) Act 1987, c 41

1988 Act Criminal Justice Act 1988, c 33

1989 Act Prevention of Terrorism (Temporary Provisions) Act 1989, c 4

1990 Act Criminal Justice (International Co-operation) Act 1990, c 5

1991 Act Northern Ireland (Emergency Provisions) Act 1991, c 24

1993 Act Criminal Justice Act 1993, c 36

Other materials

AA (Consolidation) 1988 Act of Adjournal (Consolidation) 1988 (SI 1988 No 110)

DP Scottish Law Commission Discussion Paper No 82, Forfeiture and Confiscation (1989)

Draft Bill Draft Proceeds of Crime (Scotland) Bill contained in Appendix A to this report

Feldman D Feldman, Criminal Confiscation Orders: The New Law (London, 1988)

Hodgson The Profits of Crime and their Recovery, Report of a Committee set up by the Howard League for Penal Reform and chaired by Sir Derek Hodgson (London, 1984)

Laundering Convention Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (Council of Europe, Strasbourg, 1990)

Mitchell A R Mitchell, M G Hinton and S M E Taylor, Confiscation (London, 1992)

Renton and Brown R W Renton and H H Brown, Criminal Procedure according to the Law of Scotland (5th edn, Edinburgh, 1983 ed G H Gordon, updated by supplements)

Part I Introduction

The background to this report

This report has been prepared in response to a reference from the Secretary of State for Scotland under section 3(1)(e) of the Law Commissions Act 1965. The reference is in the following terms:

"To consider

1. the adequacy of the present law and the procedure relating to the forfeiture, in criminal proceedings in Scotland, of property used for the purpose of committing, or facilitating the commission of, offences and of proceeds of criminal activity in general; and

2. whether further provision should be made to enable courts in Scotland to order forfeiture of the proceeds of criminal activity generally and property derived from such proceeds taking account of existing or proposed measures and the effectiveness of those already in operation, and to advise."

We accordingly published a discussion paper ^[1] on Forfeiture and Confiscation which made a number of provisional proposals for the reform of the law and sought views. We received in response a number of valuable comments for which we are most grateful. A list of those who submitted comments is given in Appendix C.

After the publication of the discussion paper and the submission of comments the United Kingdom ratified the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime ("the Laundering Convention").

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^[5]

Terminology

Our reference uses the term "forfeiture" in two senses: to signify both the power of a court to take property used for the purpose of committing, or facilitating the commission of, offences; and the power of a court to deprive an offender of the proceeds of criminal activity and of property derived from such proceeds. "Forfeiture" likewise signifies both powers in American usage, while "confiscation" is sometimes used to signify both in international conventions, and indeed is so used in the Laundering Convention.

^[6]

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Scope of this report

The discussion paper was entitled "Forfeiture and Confiscation", and dealt with these subjects in the order in which they appear in the reference, forfeiture being discussed at greater length than confiscation. It is confiscation, however, which occupies the greater part of this report. It is therefore entitled "Confiscation and Forfeiture" and considers these subjects in that order. The report is divided into four sections.

1.5

Section A, consisting of Parts II to X, deals with confiscation of the proceeds of crime. Under the present law a Scottish court may make a confiscation order on conviction only where a person has been convicted on indictment of certain offences related to drug trafficking or terrorism.

^[8]

Section B of the report, consisting of Parts XI to XVII, is concerned with the forfeiture of property used in the commission of crime. There are several aspects of the present law and procedure relating to forfeiture which give rise to difficulties in practice. The courts have not only a general power to forfeit property but also specific powers of forfeiture under a variety of statutes. We recommend the preservation of the specific powers but the replacement of the general power with an entirely new scheme, the central feature of which is a new type of order known as a "suspended forfeiture order" which could be applied on conviction not only to the various kinds of moveable property which are customarily the subject of forfeiture orders, but to any kind of property, heritable or moveable, corporeal or incorporeal. After the lapse of a specified period the property would be forfeited if any appeal against the suspended forfeiture order had been refused or if no interested third party had successfully applied for the recall of the order. The scheme also resolves a number of minor practical questions which have arisen in relation to forfeiture.

1.7

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^[10]

Section C of the report is Part XVIII, which contains our recommendations as to reciprocal arrangements between Scotland and other jurisdictions for the enforcement of restraint orders, confiscation orders, suspended forfeiture orders and orders corresponding to or similar to these. Section D is concerned with miscellaneous matters. Part XIX deals with the forfeiture of property where the accused has died before a confiscation order can be made. Part XX introduces the draft Proceeds of Crime (Scotland) Bill which, if enacted, would implement our recommendations. Part XXI contains a summary of our recommendations. There follow three appendices. Appendix A contains the draft Bill and explanatory notes. Appendix B sets out the provisions of Part I of the 1987 Act as amended to 1 May 1994 and as they would be further amended if the draft Bill were enacted. The effect of the proposed amendments is shown in distinguishing type: bold for words which would be inserted or substituted, and italic for words which would be repealed.

^[11]

References in the report to "the time of writing" are to 1 May 1994.

A. CONFISCATION OF THE PROCEEDS OF CRIME

Part II Confiscation: Introduction

2.1

In Parts II to X of this report we respond to that part of our reference which requires us to consider the adequacy of the present law and practice, and the need for any further provision, as to the confiscation of the proceeds of crime. By "the confiscation of the proceeds of crime" we mean, as we have already explained, the power of a court to take from an offender any benefit derived from crime.

The present law

Unless an offender has been convicted of one of the recently introduced statutory offences related to drug trafficking or terrorism which we mention in the following paragraph, a Scottish court may deprive him of the proceeds of his crime only by the imposition of a fine, or by making a compensation order. Neither is a reliable method of stripping him of his gains. While the court may wish to ensure that any fine it imposes will not be less than the amount of the offender's gains, it generally has no means of obtaining reliable information on that subject. A compensation order may be made only where the acts which constituted the offence have caused personal injury, loss or damage,

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^[18]

incapacitate

unjustly enriching

deter

protect

^[19]

There are several recent statutes of the United Kingdom Parliament which deal with the confiscation of the proceeds of crime. The principal statutes are: the Drug Trafficking Offences Act 1986,

The Acts of 1986, 1987 and 1988 are derived in part from the recommendations of the Hodgson Committee.

The confiscation provisions of Part VI of the Criminal Justice Act 1988, which apply only in England and Wales, provide for confiscation orders,

Our reference requires us to take account of the effectiveness of existing measures. They have been the subject of various reports,

The confiscation provisions in the United Kingdom, the Commonwealth and certain European States

in rem

The international context of confiscation legislation

"Modern criminal policy is no longer conceivable if it does not also include an international element. At a time when the mobility of the individual is increasing and the separation function of national borders is constantly decreasing, no domestic criminal legislator can afford to treat crime merely as a national phenomenon."

In framing our recommendations we have therefore taken account of those obligations of the Laundering Convention which bear upon the matters falling within the terms of our reference. Among the obligations which the Convention imposes on the Parties are obligations "to adopt such legislative and other measures as may be necessary" to achieve various objectives in the field of international co-operation for the purpose of depriving criminals of the proceeds of crime. Chapter II of the Convention prescribes "Measures to be taken at national level". Article 2.1 provides:

"Each Party shall adopt such legislative and other measures as may be necessary to enable it to confiscate instrumentalities and proceeds or property the value of which corresponds to such proceeds."

The Convention definitions which are relevant to this section of this report ^[60] are as follows:^[61]

"a. 'proceeds' means any economic advantage from criminal offences. It may consist of any property as defined in sub-paragraph b of this article;

b. 'property' includes property of any description, whether corporeal or incorporeal, movable or immovable, and legal documents or instruments evidencing title to, or interest in such property; ...

d. 'confiscation' means a penalty or a measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences resulting in the final deprivation of property."

Since the scope for confiscation in Scottish criminal procedure is limited, as we have noted,

Recommended policy

In our discussion paper we considered various types of case in which proceeds can be derived from criminal activity other than drug trafficking or terrorism. We sought views on the proposition that while fines and compensation orders might in some cases be satisfactory as a means of stripping an offender of unlawful proceeds, they were likely to be unsuitable in other cases; and that a new type of order, with associated powers and procedures, was accordingly required.

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Our consideration of the confiscation provisions in Part I of the Criminal Justice (Scotland) Act 1987 and in Part VI of the Criminal Justice Act 1988 suggests to us that a new type of order, designed to strip an offender of unlawful proceeds, could with advantage be modelled on certain of these provisions. It also seems obviously necessary that the Scottish courts should have the powers required by the Laundering Convention and should be at least as well equipped as those of England and Wales to confiscate the proceeds of crime. That does not mean, however, that the provisions of Part VI of the 1988 Act should be merely copied in Scottish legislation. Not only has Part VI been amended: the legal system and patterns of criminal activity in Scotland are different from those south of the Border. Naturally we have paid close attention to the English legislation, and we have modelled certain of our recommendations upon it; but we have been concerned only to secure that any new Scottish provisions should be comparable to and at least as effective as their English equivalents, and not that they should be identical to them. We shall therefore refer in detail to the English provisions only where they are particularly relevant.

We therefore now make a general recommendation in favour of the introduction of confiscation orders in cases other than those related to drug trafficking or terrorism for which provision has already been made. We consider that since the power to make these new confiscation orders would be available in a wide range of circumstances the making of such an order should not be mandatory but should be a matter for the discretion of the court, provided that specified circumstances exist.

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recommend

1. (1) Subject to the following recommendations, where in a case other than one related to drug trafficking or terrorism a Scottish criminal court is satisfied that an offender has benefited from an offence of which he has been convicted, the court should have a discretionary power to make a confiscation order requiring him to pay such sum as the court thinks fit with the object of depriving him of that benefit.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be so amended as to make the scheme for the confiscation of the proceeds of drug trafficking conform, as far as appropriate, to the scheme described in the following recommendations.

(Draft Bill, clauses 1(1), (2), (4), 39(3); Schedule 3)

The nature of confiscation

The nature of any recommendations on the subject of confiscation orders will depend on the view which is taken of the nature of a confiscation order. In England and Wales it is often maintained that the order is not part of the offender's sentence, but is essentially a civil remedy which is attached to a criminal process. The question of the nature of the order may arise in several contexts. It was discussed in the Parliamentary debates on clauses 7(2) and 24(2) of the Criminal Justice Bill (now sections 7(2) and 27(2) of the Criminal Justice Act 1993) which prescribe the civil standard of proof as the standard for determining certain important issues in a hearing on an application for a confiscation order. The clauses were supported by arguments that confiscation was not a punishment and the hearing was not a criminal proceeding but essentially a civil process.

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We discuss in later parts of this report these issues as to standards of proof and the relationship between the confiscation order and other orders imposed on the offender.

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prima facie

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"In principle, the exercise of depriving an offender of the profits of his illegal activities is distinct from and additional to the task of sentencing him for his crimes ... [I]f the offender has sufficient means, there should be both sentence and deprivation of profit."

In support of the view that confiscation is a civil matter it is argued that proof of the connection between the alleged benefit and the crime is a different issue from proof of guilt of the crime, and that the considerations that the order is imposed by a criminal court and is appealable in the same way as a sentence do not necessarily indicate that it is criminal in character. It is sometimes said that the confiscation orders imposed by the courts in England and Wales are not punishments but "the civil consequences of the criminal wrong-doing".^[79] Their object "is not penal, because they merely deprive the defendant of what is not rightfully his".^[80] They are "not penal but merely reparative",^[81] and "a person does not by making reparation incur punishment".^[82] If it is pointed out that an English confiscation order is enforceable by imprisonment, it is replied that a party to a civil case in England would be liable to imprisonment for contumaciously refusing to comply with a court order to hand over property.^[83]

Those arguments in support of the civil character of confiscation orders imposed in England and Wales do not appear to us to apply to Scottish confiscation orders made under the 1987 Act or our recommended scheme. None of these Scottish orders enforces a civil obligation which the offender owes to the State: he cannot be sued by the Crown in the civil courts for reparation in the amount of his proceeds.

The consideration that both under the 1987 Act and under our scheme imprisonment is the sanction for failure to pay the amount due under a confiscation order appears to us to distinguish the order from an ordinary civil decree for payment and to indicate its resemblance to a fine or a compensation order, where the same sanction is applicable. A further distinction is that while a civil court has no discretion as to the amount of a decree for payment of a debt which has been proved or admitted, a Scottish criminal court has a discretion as to the amount to be recovered under a confiscation order. Again, while civil decrees are generally granted irrespective of the defender's ability to pay,

An overview of our recommendations

We discuss in the following parts of this report the circumstances in which it should be possible for a confiscation order to be made and the various powers and procedures which would be required. We shall recommend that a confiscation order should be competent against an offender who has been convicted on indictment in the High Court or the sheriff court, or has been convicted of certain serious offences in the sheriff's summary court. The court should be entitled to require him to pay a sum which must not exceed the amount of the benefit he has derived from the offence or, if less, the amount that might be realised from the property available to satisfy the order.

The next group of recommendations on the subject of confiscation is concerned with the enforcement of confiscation orders. We propose that they should be enforced in the same way as fines, with imprisonment as the sanction for failure to pay.

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Our discussion of the enforcement of confiscation orders includes a consideration of reciprocal arrangements for the enforcement of such orders: the enforcement in Scotland of orders made in other jurisdictions, and the enforcement in other jurisdictions of orders made in Scotland.

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We also consider the position where a person is charged with an offence in respect of which a confiscation order is competent, but dies before he has been sentenced. We recommend that the Court of Session should be empowered to forfeit such of his assets as may be proved beyond reasonable doubt to have been the proceeds of the offence.

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Our recommendations, the Scottish Act of 1987 and the English Acts of 1986 and 1988

Readers who are familiar with the confiscation provisions of the Acts of 1986, 1987 and 1988 may find it useful to have at this stage a summary of the principal amendments we propose to the 1987 Act and the main differences between, on the one hand, the 1987 Act as so amended and the draft Bill and, on the other, the Acts of 1986 and 1988. Readers who are not familiar with the legislation should ignore the following paragraphs until they have read Parts III to X and XIX of the report.

2.23

A detailed discussion of the matters summarised below and full references to the statutory provisions will be found in the paragraphs mentioned in the footnotes. In the following paragraphs we refer, for the sake of brevity, to the draft Bill as "the Bill" and to the 1987 Act as proposed to be amended by the Bill as "the amended 1987 Act".

Nature of the offence; court

2.24

Under the unamended 1987 Act a confiscation order may be made only in the High Court and only in relation to a drug trafficking offence. The amended 1987 Act continues to apply only to drug trafficking offences, but it allows a confiscation order to be made not only in the High Court but also in the sheriff court. In the sheriff court an order may be made either in proceedings on indictment, or in summary proceedings where the offence, when prosecuted on summary complaint, is punishable by a fine in excess of level 5 or by more than three months' imprisonment. The Bill applies to any offence other than the drug trafficking offences to which the 1987 Act applies and certain terrorism-related offences. As in the amended 1987 Act, a confiscation order may be made where the offence has been prosecuted either on indictment (in the High Court or the sheriff court) or in summary proceedings in the sheriff court where the offence is punishable as stated above.

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Financial limits

There is no upper or lower limit on the amount of a confiscation order under the 1987 Act (not amended in this respect) or the Bill.

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Benefit

The Acts of 1986 and 1987 require the court to assess the value of the proceeds of the accused's drug trafficking. The Bill does not amend the 1987 Act in this respect. The 1988 Act defines the accused's "benefit" as the value of property he has obtained, including any pecuniary advantage he has derived, as a result of or in connection with the commission of the offence. Under the Bill, "benefit" is defined as any property or other economic advantage the accused has obtained, directly or indirectly, in connection with the commission of the offence.

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The 1986 Act, as amended by the 1993 Act, requires the court, when assessing the accused's proceeds of drug trafficking, to make certain rebuttable assumptions about the source of property transferred to him up to six years before his being indicted. The 1987 Act gives the court a discretion to make similar assumptions, and is not amended. There is no corresponding provision in the 1988 Act. The Bill gives the court a discretion to make two rebuttable assumptions as to the source of the accused's assets after the commission of the offence.

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The amount that might be realised

In the Acts of 1986, 1987 and 1988 the amount that might be realised at the time a confiscation order is made is the total of the values at that time of all the "realisable property" held, or owned, by the accused less the total amount payable in pursuance of any "obligations having priority", together with the values of certain "caught" or "implicative" gifts. In the Bill and the amended 1987 Act the definition of "realisable property" is extended to include property in the possession or under the control of the accused or the recipient of a "caught" or "implicative" gift.

Confiscation and other disposals

The Bill and the amended 1987 Act resemble the 1988 Act in providing that a confiscation order may be made only in addition to, and not instead of, dealing with the accused in any other way.

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Procedure and evidence before order made

The following should be noted:

(i) Under the Bill and the 1987 Act (not amended) the court is entitled to make a confiscation order only on the application of the prosecutor.^[119] The 1986 Act, as amended by the 1993 Act, allows the court to make an order on its own initiative and requires it to do so on the prosecutor's request. The 1988 Act requires the court to consider a confiscation order where the prosecutor gives notice that there are likely to be sufficient assets to meet it.

(ii) The 1986 and 1988 Acts, both as amended by the 1993 Act, provide that the standard of proof required to determine any question as to whether a person has benefited and the amount to be recovered should be the civil standard. The Bill and the amended 1987 Act generally impose on the Crown the criminal standard of proof.^[120]

(iii) Under the unamended 1987 Act a remit may be made by the High Court to the Court of Session where a difficult question of law or a question of fact of exceptional complexity is involved. There is no corresponding procedure in the 1986 Act and 1988 Acts. Under the Bill and the amended 1987 Act there is no remit procedure: any matters in dispute are to be resolved by the criminal court.^[121]

(iv) The Bill and the 1987 Act (not amended), unlike the 1986 and 1988 Acts, do not require the court to issue a formal certificate of its findings.^[122]

Variation of confiscation orders

The Bill and the amended 1987 Act make detailed provision for cases where, after the date of the accused's sentence, the amount of benefit or realisable property is founded to be different from the amount at the date of the sentence. Under the 1986 Act as amended by the 1993 Act the court may make a revised assessment of the proceeds of drug trafficking. The Criminal Justice (International Co-operation) Act 1990 permits the variation of an order under the 1986 or 1987 Act (but not the 1988 Act) only where there has been an increase in the amount that might be realised. Applications under the 1990 Act have to be made by the prosecutor or receiver or administrator to the civil court and then to the criminal court. Under the Bill and the amended 1987 Act, (i) where there has been an increase either in the benefit or in the amount that might be realised (ii) only the prosecutor may apply (iii) only to the court which made the order (iv) within six years after the date of conviction, the time-limit in the 1986 Act as amended by the 1993 Act.

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The Acts of 1986, 1987 and 1988 make provision for the downwards variation of an order where there is insufficient realisable property to satisfy it. Applications must be made to the civil court and to the criminal court. Under the Bill and the amended 1987 Act either the prosecutor or the accused may apply directly to the court which made the order.

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Enforcement of confiscation orders

Under the 1986 Act as amended by the 1993 Act, and under the unamended 1987 Act, a confiscation order continues to be enforceable after the offender has served a sentence of imprisonment in default of payment of the amount due under the order. Under the Bill and the amended 1987 Act, which correspond in this respect to the 1988 Act, the accused expunges his debt by serving the sentence of imprisonment.

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Preservation and realisation of property

The provisions of the Bill as to restraint orders, ancillary orders and the appointment of administrators are essentially the same as those of the unamended 1987 Act. The Bill and the amended 1987 Act, however, have the following additional features.

(i) A restraint order may contain a discretionary exception for reasonable living expenses, as in the 1988 Act.^[128]

(ii) Where a restraint order is applied for before the institution of proceedings, the court must be satisfied that it is proposed to institute proceedings within 28 days (as in the unamended 1987 Act). However, there is no longer any requirement, as in the unamended 1987 Act, that the court should be satisfied that the person is reasonably suspected of the offence: instead, it must appear to the court that there are reasonable grounds for thinking that a confiscation order might be made in the event of conviction (a variant of a requirement in the 1988 Act). (Both the Bill and the 1987 Act (not amended) require that the order must be recalled if proceedings are not instituted within 28 days, not, as in the 1986 and 1988 Acts, within such time as the court considers reasonable.)^[129]

(iii) Similarly, where a restraint order is applied for while proceedings are in progress, the court must be satisfied that there are reasonable grounds for thinking that a confiscation order might be made in the event of conviction.

(iv) Under the Bill and the amended 1987 Act a restraint order may be made where the prosecutor makes, or proposes to make, an application after sentence for a new confiscation order or an upwards variation of an existing confiscation order.^[130]

(v) There are new provisions for the registration or recording in the appropriate property register of restraint orders relating to heritable property in Scotland.^[131]

(vi) The procedure under the 1987 Act for obtaining an inhibition is simplified.^[132]

(vii) There are also new provisions for appeals against decisions in relation to restraint orders.^[133]

(viii) The provisions of the Bill as to sequestration, insolvency and related matters in relation to procedures under restraint orders and confiscation orders are essentially the same as those in the unamended 1987 Act. We recommend for both, however, a new provision which has no counterpart in the Acts of 1986 and 1988 relative to a transaction by an insolvent company which is challengeable as a gratuitous alienation or unfair preference.^[134]

The Bill, like the 1987 Act (not amended), makes no provision for disclosure orders in relation to restraint orders, which are usual in English practice.

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Protection of third parties' rights

The Bill adopts the compensation scheme in the 1987 Act, with modifications which are also inserted in that Act. The scheme is comparable to those in the 1986 and 1988 Acts.

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Reciprocal enforcement of confiscation orders

We propose the repeal and restatement of the various provisions for the enforcement in Scotland of confiscation orders made in England and Wales.

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Death of accused before confiscation order made

The 1986 Act as amended by the 1993 Act provides that in drug trafficking cases a confiscation order may be made where the defendant has been convicted but dies or absconds before being sentenced, or where he has absconded after being charged but before being convicted. Thus, no order may be made where he dies between the institution of proceedings and conviction. There are no similar provisions in the unamended 1987 Act or the 1988 Act. The Bill and the amended 1987 Act provide that an order may be made where the accused dies after proceedings have been instituted against him but before he has been sentenced. Thus, an order may be made either where he dies before conviction or where he dies after conviction but before sentence.

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Part III When confiscation should be competent

Introduction

We discuss in this part the circumstances in which a court should be entitled to make a confiscation order. We have found it useful to consider whether the scope of the power to make an order might be defined by specifying the nature of the offences in respect of which an order might be made,

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Nature of the offence

Article 2.1 of the Laundering Convention, which obliges the Parties to enact legislation to permit the confiscation of the proceeds of crime, "contains an implicit invitation for such legislation to be as broad in scope as possible".

We considered whether to devise a comparable list of summary offences for Scotland. We noted that certain statutory offences are punishable on summary conviction by a penalty in excess of the normal maximum in a summary criminal court; a fine in excess of level 5,

In making a recommendation as to summary proceedings it is also necessary to take account of cases where a summary criminal court, having been satisfied that the accused committed the offence charged, grants him an absolute discharge or places him on probation. In such cases a summary criminal court, unlike a court in solemn procedure, does not proceed to conviction.

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recommend

2. The power to make a confiscation order should be exercisable where a person is prosecuted for any offence other than a specified offence related to drug trafficking or terrorism and -

(a) is convicted on indictment; or

(b) is convicted or found to have committed the offence on summary complaint and the offence is punishable by a fine in excess of level 5 on the standard scale or imprisonment for a period of more than three months or by both such fine and imprisonment.

(Draft Bill, clause 1(1), (2))

Courts entitled to make confiscation orders

It follows from the above recommendation that both the High Court and the sheriff court would have power to make confiscation orders under the new legislation. Under Part I of the Criminal Justice (Scotland) Act 1987 confiscation orders in drug-trafficking cases may be made only in the High Court. Since under the new legislation the sheriff court would have a general power to make confiscation orders in solemn procedure in respect of other offences,

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In the discussion paper we did not propose that the district court should have power to make confiscation orders, and none of those who commented suggested that the district court should have such a power. We do not consider it appropriate that the district courts should be burdened with the complexities which the exercise of such a power would involve. If recommendation 2 above were to be accepted, it would be unnecessary to enact any statutory provision to the effect that confiscation was incompetent in the district court. While there is no statutory restriction on the prosecution in the district court of summary offences punishable by a fine in excess of level 5 or imprisonment for more than three months, in practice such offences are prosecuted only in the sheriff court. There is accordingly nothing in our draft Bill which excludes the district court from its confiscation provisions. In any event, however, we recommend:

3. (1) The power to make a confiscation order in terms of Part I of the Criminal Justice (Scotland) Act 1987 should be extended to the sheriff court in solemn procedure and in summary procedure where the offence concerned is punishable by a fine in excess of level 5 on the standard scale or by imprisonment for more than three months or by both such fine and imprisonment.

(2) The power to make a confiscation order should not be exercisable in the district court.

(Draft Bill, clause 39(3); Schedule 3, paragraph 2)

Financial limits

3.7

In the discussion paper we expressed the view that in the interests of the economical use of resources it was desirable in some way to exclude confiscation orders for the payment of small amounts of money, and that that could best be done, as in Part VI of the Criminal Justice Act 1988, by prescribing a minimum financial amount.

We have concluded that it would be undesirable to prescribe a minimum amount. The principle that the offender should not be allowed to retain any benefit from his crime, which is the rationale of confiscation, must apply whatever the amount of the benefit. Besides, any prescribed minimum amount would be arbitrary and artificial. We are confident that the Crown would exercise its discretion to apply for a confiscation order only after careful consideration of all the circumstances, including the amount of the proceeds which might be confiscated. In any event the discretion of the court as to whether to grant the Crown's application is a further control on the making of inappropriate orders. We note that no minimum amount is prescribed in Part I of the Criminal Justice (Scotland) Act 1987, and that the Home Office Working Group on Confiscation has recommended that the £10,000 limit in Part VI of the Criminal Justice Act 1988 should cease to apply.

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recommend

4. There should be no lower limit on the amount of a confiscation order.

The next question is whether any upper limit should be set to the power of the court to make a confiscation order. There are at least two possible approaches to this matter, each of which may be found in the existing legislation. In Part VI of the Criminal Justice Act 1988 the upper limit of the order is the lesser of two figures calculated in accordance with the provisions of the Act: the "benefit" which the offender has derived from the offence, and "the amount that might be realised" at the time the order is made.

It is important that a confiscation order should not be made for payment of a sum which exceeds the value of the assets which might be realised for the purpose of satisfying the order. In all the statutes which currently permit the making of a confiscation order there is a provision to the effect that if the amount that might be realised at the time the order is made is less than the benefit derived by the offender from the offence, the order must be restricted to the amount that might be realised.

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We therefore consider that the approach of the 1988 Act should be followed by setting as the maximum limit the "benefit" or, if it is smaller, "the amount that might be realised" at the time the order is made.

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recommend

5. The sum which a confiscation order requires an offender to pay should not exceed the lesser of -

(a) the amount of the benefit which he has derived from the offence or offences of which he has been convicted;

(b) the amount that might be realised, as defined in recommendation 12 below, at the time the order is made.

(Draft Bill, clause 1(5))

Part IV "Benefit" and "the amount that might be realised"

Introduction

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"Benefit"

Meaning of "benefit"

The Laundering Convention requires each Party to adopt such measures as may be necessary to enable it to confiscate "proceeds or property the value of which corresponds to such proceeds"; and "proceeds" means "any economic advantage from criminal offences".

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In many cases the proceeds of the offence will be money or other property. The Convention's definition of "proceeds" continues: "It may consist of any property as defined in sub-paragraph b of this article." Sub-paragraph b provides:

"'property' includes property of any description, whether corporeal or incorporeal, movable or immovable, and legal documents or instruments evidencing title to, or interest in such property."

In the draft Bill we give "property" a wide definition which we believe to be consistent with that in sub-paragraph b: "any property wherever situated, whether heritable or moveable, or whether corporeal or incorporeal".^[180] It is also necessary, however, to provide for cases in which the offender has obtained an advantage which is measurable in money terms although no property has changed hands. The words "or other economic advantage" in our definition of "benefit" are designed to cover such cases. Examples are cases in which the offender has obtained by fraudulent means services without payment, or an overdraft, or a licence to trade or to practise a profession, or has evaded an obligation to pay money or deliver property, or has induced a creditor to wait for or to forgo payment.^[181] Again, the offender might have received a reward in the form of a free holiday, or unpaid services.

It is also important to catch any advantage received before the commission of the offence was completed,

Re Randle and Pottle

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Valuation of "benefit

There is a question whether the court, when calculating the amount of any benefit, should make any deductions in respect of outlays, expenses or other sums which may appear to be relevant. If, for example, as a result of making a fraudulent application to a building society the offender has obtained a loan and purchased a house, should his benefit be the market value of the house, or its value after deduction of the building society's interest and any other sums? In England and Wales the Hodgson Committee recommended confiscation of only the net proceeds of offending,

We note that a different approach was taken in the Scottish case of Gunn, Collie & Topping v Adair

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"(i) that it was not intended that courts should embark with the aid of expert evidence upon costing analyses of commercial transactions with a view to determining on accountancy principles the precise trading profit, or gross profit, or net profit, derived from some specific offence; (ii) that, while the 'benefit derived from the offence' must normally be a determinable cash benefit capable of being taken away by the imposition of a pecuniary fine, it by no means follows that the word 'benefit' should not be read as including indirect and incidental advantages which may not be reducible to an exact sum of money by any ordinary method of costing; (iii) that the process of assessment should be conducted on broad overhead lines; and (iv) that, if the offender desires to reduce or extinguish the amount of the apparent benefit which he has prima facie derived from the offence ... he would do well to provide the court with material on which a decision in either of these senses can be based."^[195]

These observations must be read in context, and his Lordship declined to decide the general question whether the measure of the "benefit" referred to in the regulation was or was not the "gross profit". We propose, however, that the Scottish courts, when assessing "benefit" for the purposes of confiscation, should likewise take a broad approach and arrive at a realistic result.^[196] The words "economic advantage" in our definition of "benefit" should enable them to do so.

We recommend:

6. (1) A person should be held to have benefited from the commission of an offence if in connection with its commission he has obtained, directly or indirectly, any property or other economic advantage.

(2) "Property" should be defined as "any property wherever situated, whether heritable or moveable, or whether corporeal or incorporeal".

(Draft Bill, clause 2(1), (4))

Determination of the amount that might be realised

4.8

We have already noted that a confiscation order should not be made for a greater sum than the value of the assets which might be realised for the purpose of satisfying it, and we have recommended that the sum stated in the order should not exceed the lesser of (1) the amount of the benefit which the offender has derived from the offence and (2) the amount that might be realised at the time the order is made.

Meaning of "realisable property"

It appears to us that the correct approach to the problem of specifying the property which might be realised for the purpose of satisfying a confiscation order is to adopt a broad definition with the fewest possible exceptions. A broad definition is necessary for several reasons. First, as we shall explain more fully later,

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Secondly

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Thirdly

We should say at once, however, that although we propose that "realisable property" should be defined in broad terms, it seems to us to be most unlikely that the property of an innocent third party would be used to satisfy a confiscation order. If, for example, the offender has in his possession property which the police have reasonable cause to believe to have been stolen, the police may be expected to seize that property in the course of their investigations into the theft. It will then no longer be in the offender's possession or under his control, and it will be returned to the true owner in due course: in any event, even if the true owner is not known, it will not be available to satisfy a confiscation order. If the reasonable belief that the property has been stolen arises only after a restraint order has been made, the prosecutor may apply to the court to vary or recall the order so far as it relates to that property.

We now discuss in detail the terms of our proposed definition of "realisable property" which is set out in clause 3(1) and (2) of the draft Bill. We propose that in the 1987 Act a definition in similar terms should be substituted for the current provisions of section 5(1), (2) and (3).

(i) The definition is directed against the accused and any person to whom he has made a gift. As to the accused, the definition applies both where proceedings have been instituted against him ^[212] and where a restraint order has been made before proceedings have been instituted.^[213] As to the recipient, it should not matter whether the gift was made directly or indirectly, or in one transaction or a series of transactions.^[214] If the accused gives property to A on the understanding that A will give it to B, the property should be treated as a gift made by the accused to B; or if he gives it to C on the understanding that C will give it to D and D will give it to E, it should be treated as a gift made by the accused to E.

(ii) The definition includes the whole estate of the accused or the recipient,^[215] wherever situated, and any other property in his possession or under his control. The inclusion of the phrase "wherever situated" makes it clear that the court would be entitled to take account of property situated outside Scotland. We discuss later the enforcement of Scottish confiscation orders in other jurisdictions.^[216] In practice, a Scottish court would not make a confiscation order relative to property outside Scotland where there was no likelihood of the order's being enforced. We have already defined "property" as "any property, whether heritable or moveable, or whether corporeal or incorporeal".^[217] We have also explained the inclusion in the definition of any property "in the possession or under the control" of the accused or the recipient.^[218]

(iii) The definition, like the definition in section 5(2)(a) of the 1987 Act, includes any income or estate vesting in the accused or the recipient.

Section 5(2) of the Criminal Justice (Scotland) Act 1987, as amended, provides that "the whole estate of a person" means his whole estate, wherever situated, and includes not only any income or estate vesting in him but also

"(b) the capacity to exercise, and to take proceedings for exercising, such powers in, over or in respect of any property as might have been exercised by the holder of the realisable property for his own benefit."^[219]

We do not consider that these words are appropriate. They appear to have been taken from section 31(8)(b) of the Bankruptcy (Scotland) Act 1985 which is concerned to define the property of the debtor which vests in the permanent trustee and to make it clear that he has capacity to exercise the powers mentioned in respect of the property.^[220] Property which is subject to a restraint order, however, remains vested in the person who holds it, unless the court otherwise orders;^[221] and an administrator who is appointed to deal with or realise the property has all the powers necessary for the discharge of his functions.^[222] Accordingly we have not followed section 5(2)(b) in our draft Bill and we recommend that it should not be repeated in the new version of section 5(1), (2) and (3).

The exceptions to the broad provisions in the definition of "realisable property" should be strictly limited. It is clearly necessary to make an exception for property held on trust, as in section 5(3)(a) of the 1987 Act, since such property vests in the trustee.

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recommend

7. The property which should be liable to be realised to satisfy a confiscation order should be -

(a) the whole estate, wherever situated, of -

(i) the offender;

(ii) any person to whom he has made a gift, directly or indirectly and whether in one transaction or a series of transactions;

(b) any other property in the possession or under the control of any of the persons mentioned in paragraph (a)(i) and (ii) above; and

(c) any income or estate vesting in any of those persons.

(Draft Bill, clause 3(1))

8. For the purposes of recommendation 7 above "the offender" means a person -

(a) against whom proceedings have been instituted as defined in recommendation 47(2) below or

(b) in respect of whom a restraint order has been made before the institution of proceedings in terms of recommendation 48(1) below.

(Draft Bill, clause 3(1)(a))

9. Property should not be realisable if -

(a) it is held on trust by a person mentioned in recommendation 7(a) above for a person not so mentioned; or

(b) a restraint order or a suspended forfeiture order made in terms of recommendations 61-69 below is in force in respect of the property.

(Draft Bill, clause 3(2))

10. The provisions of section 5(2)(b) and (3)(b) of the Criminal Justice (Scotland) Act 1987 are unnecessary.

11. Section 5(1), (2) and (3) of the Criminal Justice (Scotland) Act 1987 should be replaced by provisions analogous to those recommended in recommendations 7 to 9 above.

(Draft Bill, clause 39(3); Schedule 3, paragraph 6)

12. The amount that might be realised when a confiscation order is made should be the total value -

(a) of the offender's realisable property as specified in recommendations 7 to 9 above, and

(b) subject to recommendations 15 to 19 below, of all gifts made by him.

(Draft Bill, clause 3(3))

Valuation of "realisable property"

We now consider the valuation of the realisable property of the person against whom the confiscation order is to be made.

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First

Secondly

Thirdly

recommend

13. (1) In assessing the value of realisable property (other than money) the court -

(a) should be required to have regard to the likely market value of the property at the date on which the confiscation order would be made; and

(b) should be entitled to have regard to any security or real burden which would require to be discharged in realising the property or to any other factors which might reduce the amount recoverable by such realisation.

(2) "Money" in paragraph (1) above should include cheques, banknotes, postal orders, money orders and foreign currency.

(3) In assessing the value of realisable property held by a person whose estate has been sequestrated, or who has been adjudged bankrupt in England and Wales or Northern Ireland, the court should be required to take into account the extent to which the property is or has been included in his estate for the purposes of the Bankruptcy (Scotland) Act 1985 or Part IX of the Insolvency Act 1986.

(4) Section 5 of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 3(4), (5), (6), 39(3); Schedule 3, paragraph 6)

The offender's family home

We envisage that as a general rule it should not be necessary for the court, when considering the nature of the property available to satisfy a confiscation order, to be satisfied that there is a connection between the property under consideration and the benefit derived from the commission of the offence. If the offender has benefited by a certain amount and has dissipated that benefit before a confiscation order could be made, the court should be entitled to make a confiscation order based on the value of his estate at the time the order is made, even though he has acquired all or part of that estate by lawful means. While this approach might be thought to be a possible cause of hardship in some cases, it should be noted that the making of a confiscation order would be discretionary: the court would be entitled to decide whether to make an order and, if it so decided, the order would require payment of only "such sum as the court thinks fit",

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Under Part I of the Criminal Justice (Scotland) Act 1987 the Court of Session has a further discretion: when making a restraint order interdicting a person from dealing with his realisable property, or when requiring a person in possession of realisable property to give it to the administrator, the Court may "make an exception ... for the protection of a person or his family".

"... considerable personal hardship can be caused to the debtor's family by a sudden or premature eviction, and we believe it to be consonant with present social attitudes to alleviate the personal hardships of those who are dependant on the debtor but not responsible for his insolvency, if this can be achieved by delaying for an acceptable time the sale of the family home."^[231]

Section 40 requires the permanent trustee to obtain either the "relevant consent"^[232] or the authority of the court before he sells or disposes of any right or interest in the debtor's "family home".^[233] The court, when considering an application for such authority, is directed to have regard to all the circumstances of the case, including the needs and financial resources of the spouse and any "child of the family",^[234] the length of the period during which they have resided in the family home and the interests of the creditors. The court may grant the application subject to such conditions as it may prescribe, or may refuse to grant it or may postpone granting it for a period not exceeding 12 months.^[235]

Whether the offender's family should be protected to any extent from the consequences of confiscation is a matter on which we have not consulted, but it appears to us that it might be thought anomalous if the law did not extend to the family of an offender some protection analogous to that which it affords to the family of a debtor, if it is assumed that in each case the family has not been responsible for the offence or the insolvency. If it is accepted that such an anomaly should be avoided, there nevertheless remains some room for a reasonable difference of opinion as to the scope of the protection which should be extended to the offender's family. The definition of "family home" in section 40 of the 1985 Act

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If the provisions of section 40 of the 1985 Act were to be adapted for a statute dealing with confiscation, it might be thought that they should be modified to take account of the matters mentioned above. We have concluded, however, that it would be inappropriate to have radically different schemes for cases of insolvency and confiscation, especially since the insolvency scheme has been quite recently the subject of consideration by Parliament. We therefore propose that the provisions of the latter scheme should be applied mutatis mutandis where a confiscation order has been made and the court has not been satisfied that the offender's interest in the family home has been acquired by means of the benefit derived from the offence. As we shall explain later, we propose that it should be for the prosecutor to prove beyond reasonable doubt the amount of the offender's benefit and the amount that might be realised;

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We therefore recommend:

14. (1) Where the court is not satisfied that the offender's interest in his family home has been acquired by means of the benefit derived from the offence concerned, any right or interest in the family home should be disposed of only in terms of provisions analogous to those of section 40 of the Bankruptcy (Scotland) Act 1985.

(2) Similar provisions should be inserted in Part I of the Criminal Justice (Scotland) Act 1987.

(3) The reference to an exception for the protection of a person or his family in section 23(6) of the 1987 Act should be repealed.

(Draft Bill, clauses 36, 39(3), (9); Schedule 3, paragraph 10; Schedule 5)

Gifts

We have already recommended that a gift should be "caught", that is, that its value should be liable to be realised in order to satisfy a confiscation order, whether the gift has been made directly or indirectly, or in one transaction or a series of transactions.

recommend

15. A gift made by the offender should be included among the property liable to be realised to satisfy a confiscation order if it has been made either in contemplation of, or after, the commission of the offence; or, where there is more than one offence, in contemplation of any of them or after the commission of the earlier or earliest of them.

(Draft Bill, clause 4(1))

It is also important to take account of sham transactions whereby the offender has disposed of property for a sum which is significantly less than its market value. It seems appropriate to treat as a gift the difference between the market value and the sum, or the value of any consideration,

recommend

16. (1) Where the offender has transferred property to another person for significantly less than its market value, the difference between its market value and the value of the consideration received by the offender should be treated as a gift, and the value of the gift should be adjusted to take account of subsequent changes in the value of money.

(2) Section 6 of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 4(3), 39(3); Schedule 3, paragraph 7)

Valuation of gifts

We now make further recommendations as to the valuation of gifts. The value of a gift of money

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"(a) the value of the gift when received adjusted to take account of subsequent changes in the value of money; or

(b) both of the following -

(i) the likely market value, on the date on which the confiscation order is to be made, of -

(A) the gift, if retained; or

(B) where the recipient of the gift retains only part of it, the retained part, and any property or part of any property which, directly or indirectly, represents the gift; or

(C) where the recipient of the gift retains no part of it, any property or part of any property which, directly or indirectly, represents the gift; and

(ii) the value of any other property and any other economic advantage which by reason of the making of the gift the recipient of the gift has obtained, directly or indirectly, prior to the date on which the confiscation order is to be made, adjusted to take account of subsequent changes in the value of money,

whichever is the greater."

The following are examples of how the proposed rules might be applied in practice.

Example 1

The gift is a painting worth £1,000 at the date of receipt. At the date when the confiscation order is to be made, that value, adjusted to take account of inflation, is £1,100. That, accordingly, is its value under paragraph (a). The recipient, however, has retained the painting, so that paragraph (b)(i)(A) also applies. As a result of the growing reputation of the artist the likely market value of the painting on the date when the confiscation order is to be made is £2,000. That, accordingly, is its value under paragraph (b)(i)(A). Since that value is greater than its value under paragraph (a), the value of the gift is taken to be £2,000.

Example 2

The gift is a house worth £100,000 at the date of receipt. At the date when the confiscation order is to be made that value, adjusted for inflation, is £110,000, which is therefore the value under paragraph (a). The recipient has retained the house, so that paragraph (b)(i)(A) applies. Since house prices have risen at the same rate as inflation, its likely market value is £110,000. The recipient, however, has let it for four years at a profit of £2,500 per annum. That is a further economic advantage which he has obtained by reason of the making of the gift. It must therefore be included in the value of the gift, by virtue of paragraph (b)(ii). The value of the gift under paragraph (b) is £110,000 plus 4 x £2,500 ^[259] (£10,000); £120,000, which is taken to be the value of the gift since it is greater than its value under paragraph (a).

Example 3

The gift is a house worth £200,000 at the date of receipt. At the date when the confiscation order is to be made its value, adjusted for inflation, is £220,000 (the paragraph (a) value). Before that date, however, the recipient has divided the house into four flats, retained one of these flats for his own use, let another for two years at £2,000 per annum, sold the remaining two flats for £50,000 each and invested the proceeds (£100,000), from which he has derived an income of £7,500 per annum for two years. Accordingly paragraph (b)(i)(B) applies to his own flat and the let flat (the retained part of the gift) and to the investments (which represent the gift). The likely market value of these is, let us say, £55,000 for each flat (£110,000) and £115,000 for the investments: £225,000. Paragraph (b)(ii) applies to the income from the let flat (£4,000) and from the investments (£15,000), since these sums are economic advantages the recipient has indirectly obtained by reason of the making of the gift. Adjusted to take account of changes in the value of money they amount to, say, £20,000. Adding the figures under (b)(i)(B) and (b)(ii) gives a total of £275,000 which, since it is greater than the paragraph (a) value of £220,000, must be taken to be the value of the gift.

Example 4

Again, the gift is a house worth £100,000 at the date of receipt. That figure, adjusted for inflation, is £110,000, which is the value under paragraph (a). The recipient, however, has not retained the house but has sold it and bought another with the proceeds of sale. The second house may therefore be said to represent the gift house, so that paragraph (b)(i)(C) applies. There are no circumstances which attract the application of paragraph (b)(ii). The value of the second house at the time the confiscation order is to be made is £160,000 which, being greater than the value under paragraph (a), is taken to be the value of the gift.

Example 5

The gift is £10,000 in cash. The recipient does not retain it as cash but invests it in a unit trust fund. Adjusted for inflation, the value of the gift when received is £11,000 by the date when the order is to be made (the paragraph (a) value). The value of the units, however, which represent the gift, is by then £15,000 (the paragraph (b)(i)(C) value). In addition, the recipient has derived from them an income of £1,000 per annum for four years, which is an economic advantage in the sense of paragraph (b)(ii). The value assessed under paragraph (b) is therefore £15,000 plus 4 x £1,000^[260] (£4,000): £19,000, which, since it exceeds its value under paragraph (a), must be taken to be the value of the gift.

Example 6

A gift worth £1,000 is squandered by the recipient. He receives £1,000 in cash and spends it on a holiday; or he receives silver worth £1,000, sells it and gambles away the proceeds. Here, none of the circumstances in paragraph (b) apply: the value of the gift is simply £1,100: its value when received, adjusted to take account of subsequent changes in the value of money.

Many other examples could be figured, such as a gift of services for which the recipient would otherwise have had to pay; or a gift of improvements to a house for which he would have had to pay and which have resulted both in his greater enjoyment of the house and an increase in its value.

We recommend:

17. (1) Where a gift was in the form of money and the recipient proves on a balance of probabilities that the money or any of it has not been used to purchase goods or services or to earn interest or any other return, the value of the gift or such part of it as has not been so used should be taken to be the face value of the money or, as the case may be, the unused amount of the money.

(2) In a case other than any of those mentioned in recommendation 16 and in paragraph (1) above,

the value of a gift should be taken to be the greater of the following:

(a) its value when received, adjusted to take account of subsequent changes in the value of money; or

(b) both of the following -

(i) the likely market value, on the date on which the confiscation order is to be made, of -

(A) the gift, if retained; or

(B) where the recipient of the gift retains only part of it, the retained part, and any property or part of any property which, directly or indirectly, represents the gift; or

(C) where the recipient of the gift retains no part of it, any property or part of any property which, directly or indirectly, represents the gift; and

(ii) the value of any property and other economic advantage which the recipient of the gift has obtained, directly or indirectly, by reason of the making of the gift, prior to the date on which the confiscation order is to be made, adjusted to take account of subsequent changes in the value of money.

(3) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 4(2), (4), 39(3); Schedule 3, paragraph 7)

Court's discretion not to take gift into account

We propose to follow, with modifications, the course taken in the 1987 Act. First, it would be idle to take account of the amount of a gift, or of the gratuitous element in a transaction, if the circumstances were such that it was unlikely that the amount could be realised: for example, if the recipient's realisable property was insufficient to meet the amount, or was situated in a country with which there were no arrangements for the enforcement of orders under the legislation. We therefore recommend:

18. The court should be entitled to disregard the amount (or part of the amount) of a gift caught by the legislation if it considers it improbable that the amount (or part) could be realised.

(Draft Bill, clause 4(5))

4.28

Secondly, we recognise that it may seem unfair to catch a gift which has been received in good faith by a recipient who had had nothing to do with the commission of the crime. In such a case it seems necessary to strike a balance between the principle that all the proceeds of the crime should be confiscated and the interests of the innocent recipient. Here we propose to follow the approach of section 8(2)(b) of the 1987 Act which specifies the circumstances in which the Court of Session may recall a restraint order on the application of the recipient of a gift. Three conditions must be satisfied:

(i) that the recipient received the gift not knowing, not suspecting and not having reasonable grounds to suspect that the giver was in any way concerned in drug trafficking; and

(ii) that the recipient is not, and has never been, an associate of the giver; and

(iii) that the recipient would suffer hardship were the order not to be recalled.

4.29

We propose later that the recipient of a gift may similarly apply for the recall of a restraint order made under the new legislation. We propose here that the recipient should also be entitled in other circumstances to apply to the court to exercise a discretion not to take a gift into account if similar conditions are fulfilled. The recipient would be entitled to apply to the court before or after the confiscation order was made and before his property was realised.

^[266]

"that he was not associated with the giver in the commission of the offence."

This is a different test from that in paragraph (ii) of section 8(2)(b) of the 1987 Act, which refers to a person who is an "associate" as defined in section 74 of the Bankruptcy (Scotland) Act 1985.^[267] A person who, in our version, is "associated with the giver in the commission of the offence" may be, but need not necessarily be, named in the proceedings as a co-accused or an accomplice. The third condition, that the recipient would suffer hardship if the gift was taken into account, is intended to be strict. Even if all three conditions were satisfied, the granting of the application would be a matter for the discretion of the court. If, however, the application is refused, the applicant should be entitled to appeal. It seems equally necessary in the interests of justice that the prosecutor should be entitled to appeal against the granting of an application. The appeal procedure would be as in an appeal against sentence.^[268]

Provisions on these lines, we think, would not compromise the thoroughness of the regime for confiscation of the proceeds of crime but would permit the court to avoid the confiscation of a gift, or the value of a gift, where it would be generally regarded as unconscionable to do so. We consider that the 1987 Act would be improved by the insertion of similar provisions. If the 1987 Act were amended in that way, it would be possible to repeal section 6(4) and (5) of that Act whereby certain gifts made for charitable purposes are excluded from the definition of "implicative" gifts. These provisions have no counterpart in other United Kingdom confiscation legislation.

^[269]

recommend

19. (1) The recipient of a gift should be entitled to apply to the court, before or after a confiscation order is made and before his property is realised, for a declaration that the gift should not be caught.

(2) The court should have a discretion to grant the application if the recipient satisfies the court, on a balance of probabilities, that -

(a) he received the gift not knowing, not suspecting and not having reasonable grounds to suspect that the gift was made in contemplation of, or after, the commission of the offence; and

(b) that he was not associated with the giver in the commission of the offence; and

(c) that he would suffer hardship if the application were not granted.

(3) An appeal should lie to the High Court at the instance of -

(a) the recipient against the refusal;

(b) the prosecutor against the granting, of the application.

(4) The appeal procedure should be as in an appeal against sentence.

(5) Provisions to the same effect as (1) to (4) above should be inserted in the Criminal Justice (Scotland) Act 1987.

(6) Section 6(4) and (5) of the 1987 Act should be repealed.

(Draft Bill, clauses 4(6)-(8), 39(3), (9); Schedule 3, paragraph 6; Schedule 5)

Obligations having priority

The Criminal Justice (Scotland) Act 1987, like other confiscation legislation in the United Kingdom, provides that the amount that might be realised at the time a confiscation order is made is the total value of all the offender's realisable property and of certain gifts, less the total amount payable in pursuance of "obligations having priority".

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^[271]

In the discussion paper we proposed that no special provision should be made to secure the position of the offender's ordinary creditors.

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First

Secondly

Thirdly

Fourthly

It appears to us that a rule similar to that in the 1987 Act requiring deductions to be made in respect of "obligations having priority" would involve so many anomalies and complexities that it would be preferable not to adopt it. We also consider that the 1987 Act would be improved by the removal of the rule. We therefore recommend:

20. (1) In the assessment of the amount that might be realised no deduction should be made of any sums payable in pursuance of "obligations having priority".

(2) Section 5 of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clause 39(9); Schedule 5)

Part V Confiscation and other disposals

Introduction

5.1

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Confiscation order not to be the only sentence

Although we consider a confiscation order to be in some degree penal in character we do not think it would be appropriate for an order to be the only sentence or other means of dealing with the offender to be ordered by the court. For the court only to make a confiscation order would be to indicate to the public that an offence of the kind concerned would be tolerated if the offender could be parted from his proceeds. We therefore propose that a confiscation order should be made only in addition to, and not instead of, dealing with the offender in some other way.

^[275]

recommend

21. (1) A confiscation order should be imposed only in addition to another order or sentence.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 1(3); 39(3); Schedule 3, paragraph 2)

Disapplication of restrictions on combined orders

We propose an approach to the making of a confiscation order which would enable the judge to regard a confiscation order as one of the various options available to him as ways of dealing with the offender, and would give him a wide discretion not only as to whether to make an order and, if so, for what amount, but also as to the combination of the order with other elements in the sentence. We therefore recommend that any restrictions, in relation to confiscation orders, on the combination of one form of sentence with another should be removed. The only restrictions on the judge's discretion which we propose are that he should not take a confiscation order into account when considering and determining the length of a sentence of imprisonment, or any other sentence, such as a community service order, which does not involve depriving the offender of money or property;

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^[277]

We therefore recommend the disapplication, as far as they would relate to confiscation orders, of any statutory provisions which forbid the use of one form of disposal in conjunction with another. An example of such a provision is section 1 of the Community Service by Offenders (Scotland) Act 1978 which appears to prohibit the court from combining a community service order with any other disposal except a compensation order or an order for disqualification, forfeiture or caution.

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^[279]

recommend

22. Any enactment restricting the power of a court dealing with an offender in a particular way from dealing with him also in any other way should not by reason only of the making of a confiscation order (or the postponement of a decision as regards making such an order) restrict the court from dealing with an offender in any way it considers appropriate in respect of an offence.

(Draft Bill, clause 5(3))

Stage at which order made

Since we regard a confiscation order as in part a form of penalty and not as an order distinct from the sentence, we do not recommend a provision, such as appears in some confiscation legislation, requiring the court to make the order, or to determine its amount, before sentencing or otherwise dealing with the offender.

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While it is not practicable to require that the confiscation order should be the first part of the sentence to be determined, we consider that the legislation should give effect to the approach that the confiscation order should be the order of primary importance in the range of sentences whose objective is to deprive the offender of his assets, that is, the sentences which involve orders for payment by the offender or for the forfeiture of his property.

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^[283]

We do not propose that the court should be required to go so far as to make the order before imposing other orders for payment or forfeiture. There may be occasions when it would be convenient for the court to make the confiscation order and then to adjourn before imposing such other orders, and the court would be free to do so. Our objective is simply to guide the order in which the judge makes his decisions as to the confiscation order and other orders for payment or forfeiture. If he decides to make both a confiscation order and such other orders he may, and perhaps usually will, impose all the orders at the same time. If so, he may wish to be seen to have followed the statutory provision, and to be emphasising the primacy of the confiscation order in such a group of orders, by imposing the confiscation order first. That, however, is a matter of sentencing practice which we consider should be within his discretion. We recommend:

23. (1) If the court decides that it ought to make a confiscation order it should determine the amount of the order before and without regard to the making of any decision as to -

(a) imposing a fine on the offender;

(b) making any order involving payment by him; or

(c) making a suspended forfeiture order in terms of recommendations 61-69 below or an order for forfeiture under a particular statute.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 5(1), 39(3); Schedule 3, paragraph 2)

Confiscation and imprisonment^[284]

Section 1(3) of the Criminal Justice (Scotland) Act 1987 directs the court to take account of the provisions of any confiscation order "in determining the amount of any fine imposed on the person as regards the offence but not in determining any other matter as regards sentence". There are similar provisions in the other Acts

^[285]

^[286]

^[287]

This policy appears to us to be soundly based on the consideration that to allow the judge to take account of a confiscation order when determining any question of imprisonment would be to allow an offender with substantial realisable proceeds to obtain a less severe sentence than that which the judge would otherwise have imposed. The offender might, for example, obtain a shorter prison sentence, or avoid imprisonment altogether. There is an obvious danger that the court might thus seem to indicate to the public that the offence concerned had been dealt with leniently because the accused had handed over the proceeds. Again, suppose that a wealthy accused were to be convicted together with a co-accused who was equally culpable but had fewer, or no, realisable proceeds: the co-accused might receive a sentence which his wealthier colleague could avoid by giving up his proceeds from the offence.

5.10

The injustice of such results is self-evident. The question for us, however, is whether it is necessary to enact a statutory rule in order to avoid them. It may be thought that they could be avoided if the judge adhered to the principle that an offender should not be allowed to buy his way out of a just penalty. That principle appears to be well established in England, where the courts have observed that compensation orders are not intended to enable the convicted to buy themselves out of the penalties for crime.

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On the other hand there may be thought to be at least one disadvantage in such a rule: it does not encourage the offender to co-operate with the Crown in their investigations of his financial affairs, and thus the full extent of his benefit or realisable property may never be known. If the court were entitled to reduce any sentence of imprisonment to reflect the co-operation of the offender in these investigations, he would have an incentive to disclose information and consequently the amount of the order might be higher than it otherwise would have been.

^[291]

recommend

24. (1) The court should be directed that where it makes a confiscation order, it should leave the order out of account in determining, in respect of the offence concerned or any other offence of which

the offender has been convicted in the same proceedings, -

(a) whether or not to impose a custodial sentence and, if so, the length of the sentence; and

(b) any other sentence which does not involve depriving the offender of money or property.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 5(2), 39(3), (9); Schedule 3, paragraph 2; Schedule 5)

Confiscation, financial and forfeiture orders

We now discuss the relationship between a confiscation order on the one hand and, on the other, a fine or an order for forfeiture. We consider separately the relationship between a confiscation order and a compensation order.

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Fines and other orders for payment

Since the court, when determining the amount of a fine, is required to take into consideration the means of the offender so far as known to the court,

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We propose that the confiscation order should be taken into account not only before the court imposes a fine but also before the court makes any other order involving any payment by him, since the offender's ability to comply with such an order will also be related to his means after the confiscation order has been satisfied. There are similar provisions in other legislation.

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Forfeiture orders

The final category of orders affecting the offender's property is comprised of orders for forfeiture. A forfeiture order may be made under the general statutory power to forfeit property used in crime by means of a suspended forfeiture order which we recommend later in this report,

^[298]

^[299]

We therefore recommend:

25. (1) The court should be directed that where it makes a confiscation order it should take account of the order before dealing with the offender, in respect of the offence concerned or any other offence of which he has been convicted in the same proceedings, by -

(a) fining him;

(b) making any order involving payment by him; or

(c) making a suspended forfeiture order as recommended below or an order for forfeiture under a particular statute.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 5(2), 39(3); Schedule 3, paragraph 2)

Confiscation and compensation

5.17

Where a person has suffered loss, injury or damage in connection with the offence, he may sue the offender in the civil courts, although he is most unlikely to do so for a variety of reasons. The prospect of civil proceedings by the victim is therefore very seldom likely to be a factor in the judge's deliberations when he is deciding whether or not to make a confiscation order. In England and Wales, however, section 72(3) of the Criminal Justice Act 1988 specifically entitles the court, when deciding whether or not to make an order, to take account of any information showing that the victim has instituted, or intends to institute, civil proceedings against the offender. The objective of such a provision, if enacted for Scotland, would appear to be to alert the court to consider leaving the offender with enough money to satisfy a decree against him for damages and expenses. That would seem to involve that in the rare cases where such proceedings were likely to be taken the court should estimate the total amount which the offender would be required to pay in the event of the victim's success. In most of these rare cases the victim's prospects of success should be reasonably good, given the evidential value of the conviction

^[300]

^[301]

In the discussion paper we proposed that as a general rule the emphasis in any confiscation procedures should be on depriving the offender of his proceeds rather than on compensating the victim of the crime in question; but where a victim had sustained loss and a sum of money representing all or part of that loss is confiscated from the offender's assets, consideration should be given to paying that sum of money as compensation to the victim rather than paying it to the State.

^[302]

The powers of the court to make a compensation order are conferred and regulated by Part IV of the Criminal Justice (Scotland) Act 1980, as amended. We do not propose any further amendment of Part IV of the 1980 Act. We consider that compensation orders are not intended to entitle offenders to buy themselves out of the penalties for crime:

^[303]

^[304]

After further consideration we have decided to clarify and simplify our proposal. First, we propose to have a special rule only where the victim has lost money or other property as a result of the offence. Secondly, we propose that in such a case the court should simply be required to direct that the compensation is to be paid out of any sums applied towards the satisfaction of the confiscation order.

5.21

The first branch of our proposal differs from Part I of the Criminal Justice (Scotland) Act 1987 in its approach to compensation orders. Under the 1987 Act, as we have explained,

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We propose that in such a case the court should be required to direct that the compensation is to be paid out of "any sums applied towards the satisfaction of the confiscation order". We choose that form of words in view of the terms of a later recommendation as to the application of the proceeds of a realisation of property and other sums: they should first be applied in payment of certain expenses; next, such payments as the court may direct should be made; and then the sums must be applied towards the satisfaction of the confiscation order.

^[308]

Our proposed scheme would therefore operate in this way. The judge begins his sentencing exercise by reviewing all the sentencing options open to him, including confiscation and compensation. He will know the amounts of the offender's benefit and of the realisable property, and the amount of money which would be required to compensate the victim. He may decide, in the exercise of his discretion, not to make a confiscation order at all: in that event, no question as to the interrelationship of confiscation and compensation would arise. That, however, would be an unusual course, particularly where, as would usually be the case, there was property under restraint

^[309]

^[310]

We recommend:

26. (1) Where the court makes both a confiscation order and a compensation order against the offender in the same proceedings in relation to the same offence and the offence involves the misappropriation of property, the court should be required to direct that the compensation is to be paid out of any sums applied towards the satisfaction of the confiscation order.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 5(4), 39(3); Schedule 3, paragraph 2)

Appeal against confiscation order

5.25

It is obviously necessary that the offender should have an opportunity to challenge either the amount of the order or the fact that it has been made at all. We propose to provide for a right of appeal against the order in the same way as against a confiscation order under Part I of the Criminal Justice (Scotland) Act 1987, where section 1(4) provides that a confiscation order is a sentence "for the purposes of any appeal or review". It has been observed that "review" is apt to include such procedures as an application to the nobile officium or a bill of advocation.

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recommend:

27. For the purposes of any appeal or review, a confiscation order should be a sentence.

(Draft Bill, clause 1(8))

Part VI Procedure and evidence before order made

Introduction

Under our proposed scheme the court, when deciding whether to make a confiscation order, must determine the following questions:

1. Has the offender benefited from the commission of the offence? If he has not, that is the end of the matter.

2. If he has benefited, what is the amount of the benefit?

3. What is the amount that might be realised?

4. Would it be appropriate, having taken into account all the considerations relevant to the proper exercise of a judicial discretion in sentencing, to make a confiscation order?

If the answer to the last question is in the affirmative, the court may make a confiscation order in an amount which must not exceed the amount of the benefit or, if less, the amount that might be realised, but is otherwise within the discretion of the court.

6.2

In this part we consider the rules of procedure and evidence which should govern the way in which the court obtains the information it will require before it can answer the first three questions set out in the preceding paragraph. The first issue which we discuss is how the decision-making procedure should be brought into play. Next, in relation to each of the three questions it is necessary to decide whether the burden of proof should lie on the prosecutor or on the offender, whether the standard of proof required to discharge the burden should be the criminal standard of proof beyond reasonable doubt or the civil standard of proof on the balance of probabilities, and whether the party on whom the burden lies should be assisted by the application of any assumptions. The procedural matters to be resolved are: what use should be made of written statements after the fashion of civil pleadings; how any issues of fact between the prosecutor and the defence should be determined; what arrangements should be made if the court requires further information before coming to any decision as regards the making of an order; and how the court should express its decision. The rules on these matters will have a significant effect on the way the law works in practice. There are differences between the provisions of the Criminal Justice (Scotland) Act 1987 on this subject and those of the confiscation legislation for England and Wales which seem to reflect, in particular, the differing positions of prosecutors in the two jurisdictions. We have decided, for the following reasons, to adopt the 1987 provisions as a model. First, we understand that they operate satisfactorily in practice. Secondly, consistency as between the 1987 procedures in relation to drug trafficking and the new procedures in relation to other crimes should make for coherence in the operation and development of the law and practice in relation to confiscation. Thirdly, where a person has been convicted of a combination of drug trafficking charges and other charges where under the new legislation confiscation is competent, it would be undesirable to impose on the court two different procedures to be followed in the same proceedings, except where there was a sound reason in principle for making some distinction between them.

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Confiscation order on the motion of the prosecutor

The first issue is how the decision-making procedure should be brought into play. There seem to be four options: to make it mandatory for the court to operate the procedure; to give the court a discretion to make an order on its own initiative; to require the court to make an order upon the application of the prosecutor; or to give the court a discretion to do so upon such an application.

ex proprio motu

In solemn procedure the application should be made as directed in the 1987 Act: when the prosecutor moves for sentence or, where the offender has been remitted to the High Court for sentence, before sentence is pronounced.

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recommend

28. (1) The court should be entitled to make a confiscation order only on the application of the prosecutor.

(2) The application should be made -

(a) in proceedings on indictment, when the prosecutor moves for sentence or, in a remit to the High Court for sentence, before sentence is pronounced;

(b) in summary proceedings, following the conviction of the accused.

(3) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 1(1), (6), 39(3); Schedule 3, paragraph 2)

Benefit: burden and standard of proof

In the discussion paper we proposed that it should be for the prosecutor to establish the fact that the offender has benefited from the offence concerned and the value of the benefit, and that the standard of proof required of the prosecutor should be the criminal standard of proof beyond reasonable doubt.

R v Dickens

recommend

29. (1) It should be for the prosecutor to prove -

(a) that the offender has benefited from the commission of an offence, and

(b) the amount of his benefit.

(2) The standard of proof required of the prosecutor should be proof beyond reasonable doubt.

(Draft Bill, clause 1(7)(a), (b))

While we consider that the standard of proof required of the prosecutor should be the criminal standard, we acknowledge that in practice it might be difficult for the prosecutor to establish a link between the commission of the offence and the alleged benefit, and that the source of the alleged benefit is a matter which should be peculiarly within the knowledge of the offender. We have therefore considered whether it would be appropriate for the prosecutor to be helped to discharge the burden of proof upon him by the application of any assumptions. It could be provided that the court would be entitled to make certain assumptions unless the offender overcame them by evidence which established the contrary to the civil standard of proof.

6.7

There are precedents for this approach in the drug trafficking legislation, which entitles the court to make certain assumptions for the purpose of determining whether the offender has benefited from drug trafficking and, if he has, of assessing the value of his proceeds of drug trafficking. Unless the offender can establish the contrary, the court may assume, amongst other things, that any property held by him since his conviction, or transferred to him at any time during the six years before his being indicted, was received by him as a payment or reward in connection with drug trafficking carried on by him.

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In the discussion paper we referred to the drug trafficking legislation and expressed the view that that was a very draconian approach to confiscation which might be justifiable in relation to drug trafficking offences, but was only doubtfully justifiable or acceptable in relation to the generality of other offences.

We consider that it would be reasonable to place on the offender the burden of proving that the assumptions were incorrect, since the source of any property, economic advantage or expenditure should be a matter within his knowledge. The effect of statutory provisions on these lines would be that the prosecutor would discharge the burden of proving the matter concerned by proving the fact on which the assumption may be based: that the advantage had been obtained or the expenditure made since the relevant date. The court would then be entitled to find the matter established to the criminal standard of proof by making the relevant assumption unless the offender raised a reasonable doubt as to the existence of the basic fact or established on the balance of probabilities that the assumption was incorrect. It would be sufficient for him to lead enough evidence to raise a reasonable doubt as to the existence of the basic fact: that is, evidence tending to show that he had not obtained the property or economic advantage or had not made the expenditure, either at all or since the relevant date. Alternatively, he would be entitled to establish on the balance of probabilities that the assumed fact was incorrect: that is, that he had admittedly obtained the property or economic advantage since the relevant date, but that he had not done so in connection with the commission of the offence; or that he had admittedly made the expenditure since that date but that he had not met it from any property or economic advantage obtained in connection with the commission of the offence. The standard of proof on the balance of probabilities is that required of an accused who has to discharge the burden of proof in a criminal trial.

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HM Advocate v McLean

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We therefore recommend:

30. (1) For the purpose of determining whether a person has benefited from the commission of an offence and, if he has, of assessing the amount of the benefit, the court should be entitled to make the following assumptions, except in so far as he proves either of them to be incorrect on a balance of probabilities:

(a) that any property or other economic advantage which he has obtained since the relevant date (as defined below) has been obtained in connection with the commission of the offence; and

(b) that any expenditure by him since the relevant date was met out of property or other economic advantage obtained in connection with the commission of the offence.

(2) "The relevant date" means -

(a) the date of the offence; or

(b) where the offence is found to have been committed over a period of time, the date occurring at the beginning of that period; or

(c) where the application has been made in respect of two or more offences, the date of the earlier or earliest offence.

(Draft Bill, clause 2(2), (3))

Amount that might be realised: burden and standard of proof

6.11

^[335]

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In England and Wales the courts have held that in confiscation order proceedings under the Drug Trafficking Offences Act 1986 it is for the offender to establish that the amount that might be realised is less than the value of his proceeds: if he takes no steps to show that that is the case, the court is entitled to make a confiscation order for the full amount of the value of the proceeds.

^[337]

^[338]

Such questions have not yet arisen in Scotland where, as we have mentioned, it has been the practice of the Crown to make averments relative to the amount that might be realised. It has not been suggested to us that any burden of proof should be placed on the accused in this respect, and we doubt whether it would be appropriate to impose such a burden in cases other than those offences related to drug trafficking or terrorism which Parliament has decided should be treated with particular severity. In other cases it might seem oppressive to entitle the court to make a confiscation order, enforceable by imprisonment, for the full amount of the offender's benefit unless the offender could show that the amount that might be realised was a lesser sum. We consider, accordingly, that on any issue as to the amount that might be realised,

^[339]

recommend

31. (1) It should be for the prosecutor to prove the amount that might be realised.

(2) Subject to recommendation 41(3) below, the standard of proof required of the prosecutor should be proof beyond reasonable doubt.

(Draft Bill, clause 1(7)(c))

Written statements

We understand that this scheme has proved to be so effective in focusing the issues that it has only once been necessary to resolve differences between the prosecutor and the accused by the leading of evidence; and that in that case the documents lodged, like civil pleadings, enabled the judge and the parties to concentrate on those matters which were truly in dispute.

^[347]

^[348]

There are practical difficulties in the way of attaching a statement to the indictment or complaint. If, as we recommend, the benefit in respect of which an order may be made is restricted to that derived from an offence of which the accused is convicted, then in a case where the indictment or complaint set forth a number of charges the prosecutor would have to produce a statement in respect of each charge: it would be more satisfactory to produce a single statement in respect of the conviction or convictions actually obtained. We understand, moreover, that in a number of drug trafficking cases it has not been possible to complete a financial investigation before the expiry of the 110 days from full committal within which the trial of an accused who is in custody generally has to commence,

^[349]

^[350]

The financial circumstances of accused persons will vary widely, as will the complexities of the assessment of the benefit derived from their offences. We understand that Scottish prosecutors have found it expedient in all applications for confiscation in drug trafficking cases to prepare a detailed written statement in the style of civil pleadings, with numbered paragraphs or articles of condescendence and detailed schedules. Such a document is easy for the defence to answer in corresponding paragraphs, and for the judge to follow. It is, however, possible to figure a simple case (say, of insider dealing) in which the prosecutor was able to inform the court orally, and the defence could orally accept, that the benefit derived was a single payment of £x, and that the accused's only assets were a house worth £y, free of incumbrances, and a bank account containing £z. In such a case a written statement might well be unnecessary. We conclude, therefore, that while a full written statement is likely to be appropriate in most cases, oral statements should also be permissible. We therefore consider that the means by which the statement is made to the court should be left to the discretion of the prosecutor. If he chose to make the statement orally and the judge indicated that he would prefer to have a written statement, we have no doubt that a written statement would be provided.

6.18

We now consider the position of the accused person who is served with a copy of a written statement by the prosecutor and is required by the court to indicate to what extent he accepts each allegation in the statement and, in so far as he does not, "the basis of such non-acceptance",

^[351]

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^[353]

We therefore recommend:

32. (1) Where the prosecutor has moved for a confiscation order he should be entitled to lodge a statement as to any matters relevant -

(a) to determining whether the offender has benefited from the offence; or

(b) to an assessment of the amount of his benefit from the offence.

(2) Where the offender accepts to any extent any allegation in the statement, the court should be entitled, for the purposes of such determination or assessment, to treat his acceptance as conclusive of the matters to which it relates.

(3) The court should be empowered to require the offender to indicate to what extent he accepts each allegation in the statement and, in so far as he does not accept any such allegation, to indicate the basis of such non-acceptance.

(4) If the offender fails in any respect to comply with such a requirement, he should be liable to be taken as accepting every allegation in the statement apart from any allegation in respect of which he has complied with the requirement.

(Draft Bill, clause 6(1)-(4))

6.20

The prosecutor's statement and the offender's answers, in so far as we have considered them above, are concerned with the assessment of the offender's benefit. The second figure which must be ascertained is the amount that might be realised. The lesser of the two figures, it will be recalled, will be the maximum which the confiscation order may require the offender to pay.

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recommend

33. (1) The offender should be entitled to lodge a statement as to any matters relevant to determining the amount that might be realised at the time the confiscation order is made.

(2) Where the prosecutor accepts to any extent any allegation in the statement, the court should be entitled, for the purposes of the determination, to treat that acceptance as conclusive of the matters to which it relates.

(Draft Bill, clause 6(5))

Hearing

Next, it seems desirable to prescribe a procedure for the resolution of any issues remaining in dispute after any statements have been lodged and any indications given of the extent to which the allegations in them are accepted. In the discussion paper we proposed that there might be either a hearing before the trial judge or, in High Court cases, a remit to the Court of Session where that seemed to be the most convenient way of dealing with the matter.

^[356]

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^[358]

We have been persuaded by these considerations that a remit procedure would not be appropriate, and that any matters in dispute should be resolved at a hearing before the court in which the trial took place, that is, the High Court (not necessarily sitting in the town where the trial took place) or the sheriff court. It is desirable that the hearing should take place before the trial judge, since evidence relevant to the disputed matter might have been led at the trial,

^[359]

recommend

34. (1) Where any allegation in the prosecutor's statement is not accepted by the offender, or any allegation in the offender's statement is not accepted by the prosecutor, a hearing should be arranged before the trial judge, or if he is not available to preside at such a hearing within a reasonable time, before another judge, to resolve the matters in dispute.

(2) Where the trial has taken place in the High Court of Justiciary the other judge should be a judge of that Court, and where it has taken place in the sheriff court, he should be another sheriff of the sheriffdom concerned.

(Draft Bill, clause 6(6), (7))

35. (1) Section 3(5) of the Criminal Justice (Scotland) Act 1987 should be repealed and replaced by a provision implementing recommendation 34 above.

(2) Rule 67A of the Act of Adjournal (Consolidation) 1988 and rule 201D of the Rules of the Court of Session should be revoked.

(Draft Bill, clause 39(3), (9); Schedule 3, paragraph 5; Schedule 5)

We envisage that the judge's decisions as to whether the offender has benefited, the amount of his benefit and the amount that might be realised may be based on evidence led at the trial (where there has been a trial);

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Postponement of hearing

Our recommendation as to the resolution of matters in dispute at a hearing is closely connected to our next recommendation, which relates to the postponement of the hearing. In practice, the hearing will have to be postponed to a date later than that on which the prosecutor applies for the order except where he is able at that stage to make an oral statement or produce a written statement and either the defence accepts the entire contents of the statement or any matter disputed by the defence can be resolved immediately. In proceedings under the 1987 Act postponed hearings are usual. Where the offender has been tried on an indictment containing several charges, the prosecutor's statement has to be prepared in the light of the convictions returned. In any event the defence generally seek time to consider the prosecutor's statement and prepare answers; and the prosecutor may wish to adjust his statement in the light of these answers. The current practice of the High Court has been described in these terms:

^[363]

"The prosecutor's statement is a very substantial document and it is reasonable that the accused should have some chance to digest it. It is usual, therefore, on the production of such a statement on conviction for the court to invoke section 2 of the 1987 Act which allows the postponement of a decision on a confiscation order for a period not exceeding six months from the date of the conviction. Usually the defence will be allowed about six weeks to lodge answers and the case will call again in court at the conclusion of that time. Unless the Crown is in a position to agree everything in the defence Answers (which would be unusual), the case is then continued to a hearing on the evidence in relation to the financial aspects of the case. At the end of this, the judge makes his assessment and such order as he thinks appropriate. This procedure has no statutory sanction but it is difficult to see how the court could in any other way make an assessment of the value of the proceeds of drug trafficking or be satisfied as to the value of the realisable property of the accused."

Postponements in such circumstances are obviously justifiable, and are permissible in terms of section 2(1) of the 1987 Act which enables the court to postpone a decision in relation to a confiscation order if it considers that it requires further information. The court may do so without prejudice to its powers under the 1975 Act to adjourn before sentence or to defer sentence. Notwithstanding the postponement, however, the court may sentence the offender otherwise than by fining him.

In the discussion paper we proposed that where a hearing on a confiscation order could be completed within six weeks of the date of conviction, the whole sentence should be postponed until after the hearing; but where the hearing could not be completed within that time, any sentence other than a confiscation order or fine should be imposed not later than six weeks after conviction.

^[364]

We have decided to follow the scheme of section 2 of the 1987 Act, with minor modifications. If the court is postponing a decision in relation to a confiscation order

^[365]

First

^[366]

Secondly

The period for which a decision on a confiscation order may be postponed under section 2 of the 1987 Act is normally six months.

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recommend

36. (1) If the court considers that it requires further information before coming to any decision as regards making a confiscation order it should be able to postpone that decision for up to six months.

(2) If the court postpones that decision, it should also postpone passing any part of the sentence on the offender which might be affected by the making of a confiscation order, but it should be entitled to pass a sentence of imprisonment before making that decision.

(3) The offender's entitlement to appeal against conviction or sentence should not be affected by any postponement, but in the event of an appeal the court should be entitled, on the application of the prosecutor, to extend the period of postponement.

(4) The offender should be entitled to appeal against any confiscation order or other sentence passed after the period of postponement.

(5) Provisions implementing paragraphs (1) to (4) above should be substituted for section 2 of the Criminal Justice (Scotland) Act 1987.

(Draft Bill, clauses 7, 39(3); Schedule 3, paragraph 3)

Form of the court's decision

We note that in R v Johnson,

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recommend

37. Where the court makes a confiscation order, it should record its findings relevant to the amount the offender is ordered to pay, including findings as to the amount of the benefit, the elements of the benefit, the amount that might be realised and the nature and value of the realisable property.

Part VII Variation of confiscation orders

Introduction

It is necessary to make provision for cases where, after the date of the offender's sentence, the amount of the benefit or realisable property is found to be different from the amount at which it was assessed at the date of the sentence. Such a situation is likely to arise quite frequently in practice, in view of the difficulties facing the prosecutor in ascertaining these amounts. There are essentially three situations to be considered. In the first, the court has made a confiscation order; it now appears that one or other of the amounts is greater than the amount which the court took into account in making the order; and there is a question whether the amount to be paid under the order should therefore be increased.

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second

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third

^[374]

Increase in benefit or realisable property after order made

Where a confiscation order has been made, the maximum amount which the court could have required the offender to pay will have been the lesser of two amounts: the value of the offender's benefit, or the amount that might have been realised at the time the order was made. We consider here what steps should be open to the court where the amount which it has taken as the maximum has increased since the date when the order was made. It will be convenient to begin by noticing the only relevant statutory provisions on this matter, which are sections 16 and 17 of the Criminal Justice (International Co-operation) Act 1990. Section 17 applies to Scotland and matches section 16, which applies to the rest of the United Kingdom. Each section deals with drug trafficking cases where the amount of the confiscation order was less than the value of the offender's proceeds and there has been an increase in the value of the realisable property. In other words they deal with cases where the value of the proceeds exceeded the value of the realisable property, and the latter therefore determined the maximum amount of the order. They do not deal with cases where the value of the realisable property exceeded the value of the proceeds, which accordingly determined the maximum amount, and there has been an increase in the value of the proceeds.

7.3

We now examine section 17 in detail. It prescribes a somewhat cumbersome procedure whereby either the prosecutor or an administrator who has been appointed in relation to the realisable property may apply to the Court of Session for a certificate that the amount that might be realised is greater than the amount taken into account in making the confiscation order. If the Court grants a certificate, the prosecutor (but not the administrator) may apply to the High Court of Justiciary for an increase in the amount to be recovered under the confiscation order. The High Court may substitute for that amount such amount as appears to it to be appropriate having regard to the amount now shown to be realisable. The substituted amount, however, must not exceed the amount assessed to be the value of the offender's proceeds of drug trafficking. Thus, where it is discovered that the offender owns property of substantial value which the Court, had it been aware of it when it made the order, would have been entitled to take to be the proceeds of drug trafficking,

^[375]

We propose that there should be a new scheme, differing in several respects from that in section 17, which should apply to all confiscation orders, whether made under Part I of the 1987 Act or under our proposed new legislation.

^[376]

First

^[377]

Secondly

Thirdly

Fourthly

Next, we try to define more closely the nature of the increase on which the prosecutor should be entitled to rely when making his application. First, there may be cases where the benefit obtained from the commission of the offence is found to be greater than that which the court took into account when it made the order. Secondly, as to the amount that might be realised, there may be cases where the court had disregarded the amount (or part of the amount) of a gift on the ground that it was improbable that the amount (or part) could be realised;

^[378]

In other cases, however, where the ground of the application is an increase in the amount that might be realised, there is a question as to the nature of the increase on which the prosecutor should be entitled to rely. Section 17 of the 1990 Act refers to the Court's being satisfied that the amount that might be realised is "greater than the amount taken into account in making the confiscation order (whether it was greater than was thought when the order was made or has subsequently increased)". In Re B

The final question relative to these applications is whether any time-limit should be imposed within which an application would have to be made. No time-limit is prescribed by section 16 or 17 of the 1990 Act. On the other hand, the new sections 5A to 5C of the Drug Trafficking Offences Act 1986,

^[386]

The selection of the length of the period should be determined by balancing, on the one hand, considerations of humanity and on the other, the practical consideration that there may be good reasons for a prosecutor's inability to ascertain the true amount of the benefit or the true value of the realisable property until some time has elapsed after the offender's conviction. It appears that the choice of six years for sections 5A to 5C of the 1986 Act was influenced by the statutory assumption (in section 2 of that Act) that property transferred to the offender during the six years before the institution of the proceedings was a payment or reward in connection with drug trafficking.

We therefore recommend:

38. (1) After a confiscation order has been made, the prosecutor should be entitled to apply to the court which made the order for a new order for payment of a different sum -

(a) where the maximum amount of the order was determined by the benefit, and it is now known -

(i) that the benefit the offender had obtained in connection with the commission of the offence at the time the order was made was greater than the benefit taken into account in making the order; or

(ii) that the benefit taken into account in making the order has increased in value since the order was made; or

(iii) that some further benefit has been obtained in connection with the offence since the order was made; or

(b) where the maximum amount of the order was determined by the amount that might be realised, and it is now known that the amount that might be realised is greater than the amount taken into account in making the order in respect that -

(i) at the time when the order was made there was more realisable property than the court at that time took into account, or

(ii) the realisable property taken into account at the time when the order was made has subsequently increased in value, or

(iii) the amount, or part of the amount, of a gift which was disregarded on the ground that it was improbable that it could be realised, could be realised now.

(2) Any such application should be made as soon as is reasonably practicable after the relevant information becomes available to the prosecutor and in any event within six years of the date of the offender's conviction.

(Draft Bill, clause 8(1), (2), (3))

7.10

If the court is satisfied that the benefit or the amount that might be realised is greater than the benefit or amount taken into account in making the order, it should proceed as follows. Where the earlier order has already been satisfied, the court should be entitled to make a new order. The court should have a discretion both as to whether to make a new order at all, and as to the amount which any new order should require the offender to pay, corresponding to its discretion in relation to the original order. It should be for the court to determine what sum is appropriate having regard to the newly established figure. Where the earlier order has not been satisfied, the court should recall it and make a new order which takes into account both the amount unpaid under the earlier order

recommend

39. If the court is satisfied that the benefit or amount is greater than that which was taken into account in making the order, and -

(a) that order has been satisfied, the court should be entitled to make a new order for the payment of such sum as appears to the court to be appropriate having regard to what is now shown to be the benefit or the amount realisable;

(b) that order has not been satisfied, the court, if it decides to order payment of a further amount, should be required to recall the order and in making the new order should be entitled to take into account both the sum referred to in (a) above and the amount unpaid (including any interest payable) under the earlier order.

(Draft Bill, clause 8(4))

The rules of evidence and procedure in an application of this kind should be essentially the same as in the making of a confiscation order, subject to one qualification. As in the making of a confiscation order, the prosecutor should have the burden of proving beyond reasonable doubt that the benefit or amount is greater than that which was taken into account in making the order. He should lodge a statement as to any relevant matters, to which the offender should be required to respond on pain of being held to accept any allegation by the prosecutor which he does not challenge. The offender should also be entitled to lodge a separate statement. The application should be disposed of by the trial judge or, if he would not be available within a reasonable time, another judge, and any matters in dispute should be resolved by the leading of evidence. The court should have before it the findings of the court which made the original order. If the court makes a new order it should issue a written judgment giving its reasons for so doing. The qualification relates to the assumptions which a court is entitled to make under clause 2(2) of the draft Bill or section 3(2) of the 1987 Act.

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recommend

40. (1) The rules of evidence and procedure in an application in terms of recommendation 38 should be similar to those in an application for the making of a confiscation order, except that the court should not be entitled to make the assumptions referred to in recommendation 30 above or in section 3(2) of the Criminal Justice (Scotland) Act 1987.

(2) Section 17 of the Criminal Justice (International Co-operation) Act 1990 should be replaced by provisions in Part I of the Criminal Justice (Scotland) Act 1987 implementing recommendations 38 to 40(1) above.

(Draft Bill, clauses 8(5), (6), 39(3), (9); Schedule 3, paragraph 8; Schedule 5)

Insufficient realisable property to satisfy order

We now consider the circumstances in which it should be possible for the effect of a confiscation order to be varied by the reduction of the amount to be paid. Cases may occur in which it becomes apparent that the order cannot be satisfied by the realisation of the property which was taken into account when it was made. Such cases may be few because the offender normally will have been concerned to persuade the court to minimise the value of the realisable property. On the other hand its value may be diminished, for example by the destruction by fire of some uninsured item, or may turn out to have been assessed under a misapprehension, as in a case of which we were informed where an offender's assets were understood to include a Welsh tin mine and it was discovered (albeit before the confiscation order was made) that he had neglected to obtain a conveyance of the mineral rights. Again, the recipient of a gift may have obtained from the court, under the procedure we have recommended above, a declaration that the gift should not be caught.

^[398]

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We propose both for the 1987 Act and for our recommended scheme a procedure which would be less elaborate than the section 25 rules in that it would not be necessary to apply both to the Court of Session and to the High Court of Justiciary, but only to the court which had made the confiscation order. That is the court which we have recommended should entertain an application for a new order for a higher amount at the instance of the prosecutor. We also propose that it should be possible for either the prosecutor or the offender to apply for a new order for a lower amount.

^[400]

Otherwise, the procedure would be similar to that in section 25. The court, in considering whether it was satisfied that the value of the realisable property was inadequate for the payment of any amount still outstanding under the order,

It should be for the applicant to satisfy the court on a balance of probabilities that the realisable property is inadequate. That is the standard which would have been required of the offender in an application to the Court of Session under section 25. The applicant should lodge a statement, to which the respondent should be entitled to lodge answers, and the application should be disposed of by the trial judge, if available, and in all other respects like a prosecutor's application for a new order for a higher amount.

7.16

We recommend:

41. (1) After a confiscation order has been made, both the prosecutor and the offender should be entitled to apply to the court which made the order for a new order requiring a smaller amount to be paid by the offender on the ground that the value of the realisable property is inadequate for the payment of any amount outstanding (including any interest payable).

(2) When considering whether the value of the realisable property is inadequate, -

(a) the court should be required to take into account the extent to which property of a person whose estate has been sequestrated or who has been adjudged bankrupt is or has been included in his estate; and

(b) the court should be entitled to disregard any inadequacy which appears to it to be attributable, wholly or partly, to anything done by the offender for the purpose of protecting the realisable property from realisation.

(3) If the applicant satisfies the court on a balance of probabilities that the realisable property is inadequate, the court should be required to recall the order and make a new order for the payment of such lesser sum as appears to the court to be appropriate having regard to what is now shown to be the value of the realisable property and to any amount already paid under the earlier order.

(4) The rules of evidence and procedure should otherwise be similar to those which apply in an application at the instance of the prosecutor in terms of recommendations 38 to 40(1) above.

(5) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 9, 39(3); Schedule 3, paragraph 22)

No order made: benefit discovered

7.17

Finally, we consider a case where no order has been made and it comes to the prosecutor's notice that the offender has benefited in connection with the commission of the offence. Justice appears to require that the court should be entitled to make a confiscation order, just as it should be entitled to make a new order to replace an existing order after further proceeds have been discovered. We therefore propose that the prosecutor should be entitled to apply to the court for a confiscation order. As before,

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We therefore recommend:

42. (1) Where the court has imposed a sentence which does not include a confiscation order and the prosecutor learns thereafter that the offender has benefited in connection with the commission of the offence, the prosecutor should be entitled to apply to the court for a confiscation order.

(2) The application should be made as soon as is reasonably practicable after the relevant information becomes available to the prosecutor and in any event within six years of the date of the offender's conviction.

(3) The rules of evidence and procedure in the application should be similar to those in an application for a confiscation order made on a motion or remit for sentence, except that the court should not be entitled to make the assumptions referred to in recommendation 30 above or in section 3(2) of the Criminal Justice (Scotland) Act 1987.

(4) In determining the amount of the confiscation order the court should be required to take into account any order for payment or forfeiture which forms part of the sentence already imposed.

(5) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 10, 39(3); Schedule 3, paragraph 8)

Part VIII Enforcement of confiscation orders

Introduction

8.1

We now propose a scheme for the enforcement of confiscation orders which is broadly similar to that which applies to confiscation orders imposed under Part I of the Criminal Justice (Scotland) Act 1987. It has three principal features. First, a confiscation order is enforced in the same way as a fine. Secondly, interest is payable on any unpaid sum. Thirdly, the court has power to enforce a confiscation order by making restraint orders and supplementary orders for the preservation of realisable property with a view to the satisfaction of the confiscation order. Since these orders may be made both before and after conviction and in each case operate in the same way, it will be convenient to discuss them separately in Part IX. We also deal separately, in Part XVIII, with reciprocal arrangements for the enforcement of confiscation orders. In the following paragraphs we discuss the application of the statutory fine enforcement provisions to the enforcement of confiscation orders

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Enforcement in the same way as fines

Section 7 of the Criminal Justice (Scotland) Act 1987, which we propose to follow subject to the modifications noted in the following paragraphs, applies to confiscation orders various provisions of the Criminal Procedure (Scotland) Act 1975 relating to the enforcement of fines.

^[411]

Enforceability of order after service of sentence of imprisonment in default of payment

There are, however, two provisions of the 1975 Act the application of which by section 7 of the 1987 Act seems to us to be capable of improvement. The first is section 411(3).

^[412]

"(3) Proceedings by civil diligence under this section may be adopted at any time after the imposition of the fine to which they relate:

Provided that no such proceedings shall be authorised after the offender has been imprisoned in consequence of his having defaulted in payment of the fine."

In other words, once the offender has served a period of imprisonment in default of payment, the fine is no longer enforceable. Section 7(2) of the 1987 Act, however, provides that section 411 is to apply in relation to confiscation orders "except the proviso to subsection (3)". Thus, after the offender has been imprisoned for failure to pay the sum required under the confiscation order, the order continues to be enforceable by civil diligence: the offender has not expunged his debt by serving the sentence of imprisonment.

There is a question whether such a rule is justifiable in principle. We note that in England and Wales section 13(1) of the Criminal Justice Act 1993 has implemented a recommendation by the Home Office Working Group on Confiscation

^[413]

"(7) Where the defendant serves a term of imprisonment or detention in default of paying any amount due under a confiscation order, his serving that term does not prevent the confiscation order from continuing to have effect, so far as any other method of enforcement is concerned."

Section 41(2) of the 1993 Act introduces a similar rule in relation to confiscation orders made under the Northern Ireland (Emergency Provisions) Act 1991.^[414] No such rule applies to confiscation orders made under the Criminal Justice Act 1988. In support of the rule it has been argued that the amount due under a confiscation order is a debt which must be paid, and that imprisonment for failure to pay a civil debt does not expunge the obligation to pay: income tax and maintenance debts all remain in force even after a term of imprisonment is served. Further, the confiscation order will have been made on the basis that there was sufficient realisable property to satisfy it: if it is insufficient, the offender may apply to the court for a downwards variation of the order. Moreover, he will not be imprisoned in default of payment unless the court is satisfied that he has sufficient resources to pay the outstanding amount. He should not be allowed to choose to serve the alternative sentence of imprisonment and enjoy his proceeds on his release.^[415]

As we have explained, we are not satisfied that an amount due under a confiscation order is essentially or exclusively a species of civil debt.

Procedure at means inquiry court.

The other provision of the 1975 Act the application of which we propose to modify is section 398(1). The effect of section 398(1) as amended

first

Secondly

We therefore propose that a means inquiry court should be held irrespective of whether the offender is in prison, and that the prosecutor should be given an opportunity of being heard in order that the court may have sufficient information before reaching its decision.

^[424]

^[425]

"We have been invited to provide general guidance to magistrates' courts which are called upon to enforce confiscation orders. It is not the function of this Court in applications for an order of certiorari of a particular decision so to respond. What we can do is to remind justices that they have a discretion whether or not to issue a warrant of commitment and that the discretion is one which must be exercised judicially. For such discretion to be properly exercised, it is well that the following points should be kept in mind. (1) The object of a confiscation order is to divest the defaulter of money or other realisable assets. Consequently, (2) it is not a matter of choice for the defaulter to 'buy' his way out of such an order by serving the term of imprisonment imposed in default of responding to the order of confiscation: see Clacton Justices, ex p. Customs and Excise Comrs. (1988) 152 J.P. 129. (3) The mere fact of a confiscation order is evidence that at the date it was made there were realisable assets available to meet the requirements of the order. (4) Even if at the date when justices have to consider the question of enforcement the value of realisable assets are [sic] less than they were [sic] at the date of the confiscation order, it is open to the defaulter to apply for a certificate of inadequacy under section 14 of the Drug Trafficking Offences Act 1986 which will lead to a reduction in the amount of the original order. (5) Given the inter partes nature of the procedure leading to the making of a confiscation order, it will be in the nature of things that the prosecution will in all probability have information available which would be relevant for the justices' consideration. More compellingly, the prosecution has a legitimate interest in being heard before the justices come to any decision. (6) Given the purposes of the Drug Trafficking Offences Act 1986, it is incumbent on justices to consider all methods of enforcement short of issuing a warrant of commitment in a Drug Trafficking Offences Act case before doing so."

The remaining provisions of section 7 of the 1987 Act appear to us to be appropriate for our scheme. Section 7(3) provides that where the offender has been sentenced to a period of imprisonment

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^[427]

We recommend:

43. (1) Section 7(2) of the Criminal Justice (Scotland) Act 1987 should be so amended that -

(a) section 398(1) of the Criminal Procedure (Scotland) Act 1975 applies whether the offender is in prison or not;

(b) the prosecutor is given an opportunity of being heard on the occasion mentioned in section 398(1); and

(c) the reference to the proviso to section 411(3) of the 1975 Act is deleted.

(2) Provisions identical to those of section 7 of the 1987 Act, as so amended, should apply to the enforcement of confiscation orders made in respect of the offences to which our recommendations relate.

(Draft Bill, clauses 11, 39(3), (9); Schedule 3, paragraph 9; Schedule 5)

Interest on unpaid sums

8.10

The Drug Trafficking Offences Act 1986 and the Criminal Justice (Scotland) Act 1987 do not provide that interest is chargeable on sums unpaid under confiscation orders imposed in terms of these Acts. Such provision was made by section 15 of the Criminal Justice (International Co-operation) Act 1990. As to orders under the 1987 Act it provides that the offender is liable to pay interest, at the rate applicable to an award of damages in the Court of Session,

^[428]

recommend

44. Provision for the payment of interest on sums unpaid under confiscation orders should be made in terms similar to those of section 15 of the Criminal Justice (International Co-operation) Act 1990.

(Draft Bill, clause 12)

Part IX Preservation and realisation of property

Introduction

In Part VIII we discussed the enforcement of confiscation orders by applying to them the statutory provisions as to the enforcement of fines. We now consider how the court might be empowered to enforce a confiscation order by taking steps to preserve realisable property with a view to its being made available to satisfy the order. It is necessary to have in place a procedure which will meet the obligations of the United Kingdom under the Laundering Convention.

^[429]

"Each Party shall adopt such legislative and other measures as may be necessary to enable it to identify and trace property which is liable to confiscation pursuant to Article 2, paragraph 1, and to prevent any dealing in, transfer or disposal of such property.".

Article 3 is intended to facilitate international co-operation in terms of the Convention. Paragraph 1 of article 11, which is headed "Obligation to take provisional measures", provides:

"At the request of another Party which has instituted criminal proceedings or proceedings for the purpose of confiscation, a Party shall take the necessary provisional measures, such as freezing or seizing, to prevent any dealing in, transfer or disposal of property which, at a later stage, may be the subject of a request for confiscation or which might be such as to satisfy the request."

It is obvious that an offender who knows that a confiscation order may be made, or has been made, against him will have an incentive to frustrate the order by concealing or disposing of any realisable property or by removing it from the jurisdiction of the court. Part I of the Criminal Justice (Scotland) Act 1987, like many other confiscation statutes,^[430] confers jurisdiction to make orders prohibiting persons from dealing in realisable property and further orders for the realisation of such property for the purpose of satisfying a confiscation order. In the discussion paper we proposed that similar provisions should be included in any new legislation.^[431] On consultation there was general support for this proposal, although one body of consultees expressed reservations about the complexity of the procedures under Part I of the 1987 Act.

We have concluded that it would not be appropriate for us to recommend a scheme which departed to any significant extent from that in Part I of the 1987 Act. The only aspect of that scheme which our consultees thought cumbersome was that relating to the management and realisation of property by administrators. We understand, however, that there has been little opportunity for that branch of the scheme to be tested in practice. We also note that in England and Wales the corresponding provisions as to receivers in the Drug Trafficking Offences Act 1986 and the Criminal Justice Act 1988 have not been amended by the Criminal Justice Act 1993. We shall therefore propose only certain minor amendments to the scheme in Part I of the 1987 Act, and we shall recommend that any new legislation should include provisions similar to those in the 1987 Act, as so amended.

Our recommendations in outline

9.3

In Part I of the 1987 Act, the Drug Trafficking Offences Act 1986 and Part VI of the Criminal Justice Act 1988 jurisdiction to make orders for the preservation and realisation of property is conferred on the civil courts. Part I of the 1987 Act empowers the Court of Session to make such orders with a view to the satisfaction of confiscation orders made, or to be made, by the High Court of Justiciary. Our scheme likewise confers on the Court of Session or on the sheriff exercising his civil jurisdiction such powers in respect of confiscation orders made, or to be made, by the High Court of Justiciary or by the sheriff in the exercise of his criminal jurisdiction. The "clear dichotomy"

General principles

The general principles which we recommend should govern the exercise of the powers of the court and the administrator under this scheme are set out in clause 13 of our draft Bill, which is derived from section 23 of the 1987 Act and other legislation.

^[445]

(i) The first principle is that the powers must be exercised with a view to the satisfaction of the confiscation order, or potential confiscation order, by making available for that purpose the value for the time being of the realisable property.^[446]

(ii) Next, safeguards are provided for the protection of third parties. Where the third party is the recipient of a gift caught by the legislation,^[447] the powers are to be exercised with a view to realising no more than the value of the gift as assessed in accordance with the rules recommended in Part IV above.^[448] That is so notwithstanding that "realisable property" is defined in clause 3(1)(b) as including "the whole estate" of the recipient: the exercise of the powers in relation to his whole estate would often be oppressive.

(iii) Where a third party (other than the recipient of such a gift) is liable to be affected by the exercise of the powers - for example, where both he and the offender have interests in the same property - the powers must be exercised with a view to allowing the third party to retain or recover the value of his property.^[449]

(iv) An order may be made or other action taken in respect of a debt owed by the Crown.^[450] This provision is designed to elide questions of Crown immunity, for example in relation to arrestment,^[451] although there is no modification of the terms of section 45 of the Crown Proceedings Act 1947 which is concerned with the satisfaction of orders granted against the Crown in civil proceedings in Scotland.

(v) In principle, the obligation to satisfy the confiscation order takes priority over other obligations. Clause 13(6) therefore states a general rule that in exercising the powers no account is to be taken of any obligations of the offender or of the recipient of a caught gift which conflict with the obligation to satisfy the confiscation order. Thus a restraint order, which has the effect of freezing a person's assets with the intention that they should be available to meet a confiscation order,^[452] cannot be varied so as to permit the payment of a debt owed to one of his creditors, unless the value of the remaining realisable property is clearly enough to satisfy any reasonable confiscation order.^[453] Special rules apply, however, where the realisable property is held by a person whose estate is sequestrated or by a company which has been wound up.^[454] Moreover, constraints are placed on the disposal of the offender's family home^[455] and, as we shall explain,^[456] a restraint order may contain conditions and exceptions and should allow for the offender's reasonable living and legal expenses.

We accordingly recommend:

45. (1) The powers conferred on the civil courts and on administrators in terms of the following recommendations should be exercised -

(a) with a view to -

(i) satisfying a confiscation order;

(ii) realising no more than the value for the time being of a caught gift as assessed under the rules in recommendations 16(1) and 17(1) and (2) above;

(iii) allowing anyone other than the offender or the recipient of such a gift to retain or recover the value of any property held by him;

(b) without taking account of any obligations of the offender or recipient which conflict with the obligation to satisfy the confiscation order.

(2) In the exercise of these powers it should be competent to make an order or to take other action in respect of a debt owed by the Crown.

(3) Section 23 of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Draft Bill, clauses 13, 39(3); Schedule 3, paragraph 20)

The nature of a restraint order

9.6

A restraint order forms part of the procedure for the enforcement of a confiscation order which is likely to be made or has already been made. Its object is to preserve realisable property for the purpose of securing payment of the confiscation order. In England and Wales, where the device of the restraint order was created by the Drug Trafficking Offences Act 1986, it is often regarded as the equivalent, for the purposes of criminal proceedings, of the Mareva injunction in civil proceedings

Under our proposed statutory scheme a restraint order is an order of the Court of Session, or of a sheriff exercising his civil jurisdiction, interdicting a person from dealing with realisable property. The property to which it applies is no longer a part of the person's estate for practical purposes: while he continues to hold a title to the property, all his dealings with it are held in abeyance until the proceedings are concluded and any confiscation order which is made has been satisfied.

^[462]

In either case the order need not specify the property which it affects. A restraint order which is made at a time when investigations into the amount of the person's benefit and realisable property are incomplete, as they may be before or shortly after the institution of proceedings, will necessarily be framed in very wide terms.

A restraint order which covers a person's whole realisable property extends to his "whole estate"

"Dealing with" property

Section 9(3) of the Criminal Justice (Scotland) Act 1987 provides that the reference to "dealing with" property in the definition of a restraint order in section 9(1) includes a reference to making a payment in reduction of the amount of a debt, and to removing the property from Great Britain. We propose to adapt the wording of section 9(3) and to add a reference to transferring or disposing of the property.

^[472]

Conditions and exceptions

Section 9(1) of the 1987 Act provides that the restraint order may be qualified by conditions and exceptions. Thus, where the confiscation order, or potential confiscation order, is or is likely to be for a comparatively small amount, the restraint order may be restricted to property which is less than the accused's whole estate. Section 9(5) further provides that an exception must be made for reasonable legal expenses payable in relation to the proceedings. The Criminal Justice Act 1988 and the Northern Ireland (Emergency Provisions) Act 1991 provide that a restraint order may be made subject to such conditions and exceptions as may be specified therein, and may make such provision as the court thinks fit for living expenses and legal expenses.

^[473]

Mareva

^[474]

^[475]

We have concluded that it should be competent for a restraint order to contain conditions and exceptions; that an exception in relation to legal expenses should be mandatory, as in the 1987 Act (otherwise a wealthy accused might qualify for legal aid

^[476]

We recommend:

46. (1) The Court of Session or a sheriff exercising his civil jurisdiction should be empowered to make a restraint order.

(2) A restraint order should interdict -

(a) a specified person from dealing with his realisable property, or

(b) that person and the named recipient of a caught gift from dealing with their own, or the other's, realisable property,

whenever that property was acquired and whether it is described in the order or not.

(3) "Dealing with" property should include -

(a) making a payment in reduction of the amount of a debt;

(b) removing the property from the jurisdiction of the court; and

(c) transferring or disposing of the property.

(4) The court in making a restraint order -

(a) should be entitled to specify conditions and exceptions and, in particular, to make such provision as it thinks fit for reasonable living expenses; and

(b) should be required to make provision for reasonable legal expenses payable in relation to the proceedings.

(Draft Bill, clause 21(1)(a), (2), (4))

When a restraint order should be competent

9.14

Proceedings in progress

9.15

In the first category, proceedings have been instituted in Scotland against a person for an offence to which Part I of the draft Bill applies, that is, an offence on indictment other than a drug-trafficking or terrorism offence, or a summary offence punishable by a fine in excess of level 5 on the standard scale or by imprisonment for more than three months.

^[477]

It is necessary to define for the purposes of this rule the times when proceedings for an offence should be taken to have been instituted and concluded. Clause 38(3) of the draft Bill provides that proceedings are instituted when a person is arrested without warrant; or when he is charged with the offence without being arrested; or when a warrant to arrest or to cite him is granted; or when a petition is intimated to him or an indictment or a complaint is served on him; or, in summary proceedings, on the first calling of the case. Where more than one of these applies, proceedings are taken to have been instituted at the time of the earlier or earliest of them. The times when the accused first appears before the court, or when the trial begins, are irrelevant.

9.17

The various circumstances in which proceedings are taken to have been concluded are listed in clause 22(7), the effect of which is that they are concluded only where there is no longer any possibility of a confiscation order being made (other than a new order following the post-trial discovery of proceeds) or where a confiscation order has been satisfied. The list in clause 22(7) is derived from section 47(5) of the Criminal Justice (Scotland) Act 1987 and is comprised of cases where the trial diet is deserted simpliciter; the accused is acquitted or, under the rules for the prevention of delay in trials,

^[478]

We now consider the two alternative conditions referred to in paragraph 9.15 above which must be met before a restraint order may be made while proceedings are in progress. The first is that a confiscation order should have been made: it is obviously necessary that in these circumstances a restraint order should be competent. The second is that it must appear to the court that there are reasonable grounds for thinking that a confiscation order may be made in the event of conviction. These two conditions are derived from section 76(1)(c) of the Criminal Justice Act 1988 but there the second is differently expressed as "... or it appears to the court that there are reasonable grounds for thinking that a confiscation order may be made in [the proceedings]".

^[479]

^[480]

The matters to be considered under our scheme would be somewhat different. We do not recommend a lower financial limit of £10,000 or any other figure.

We therefore recommend:

47. (1) The court should be entitled to make a restraint order where -

(a) proceedings have been instituted in Scotland against a person for an offence of the kind specified in recommendation 2 above;

(b) the proceedings have not been concluded; and

(c) either -

(i) a confiscation order has been made, or

(ii) it appears to the court that there are reasonable grounds for thinking that a confiscation order may be made in the event of conviction.

(2) Proceedings for an offence should be taken to have been instituted against a person -

(a) on his arrest without warrant;

(b) when he is charged with the offence without being arrested;

(c) when a warrant to arrest him is granted;

(d) when a warrant to cite him is granted;

(e) in summary proceedings, on the first calling of the case; or

(f) when a petition is intimated to him or an indictment or a complaint is served on him,

and where more than one of these applies, at the time of the earlier or earliest of them.

(3) Proceedings should be taken to have been concluded on the occurrence of any of the events listed in section 47(5) of the Criminal Justice (Scotland) Act 1987, as extended to summary proceedings.

(Draft Bill, clauses 22(1), (2), (7); 38(3))

Before proceedings instituted

9.21

It is also necessary to provide for cases where the institution of proceedings, as defined above, might lead the accused to take immediate steps to dispose of his assets, or where it is urgently necessary to place property under restraint although a charge cannot yet be brought. Section 8(1)(b) of the Criminal Justice (Scotland) Act 1987 empowers the Court of Session to make a restraint order where the Court is satisfied that a procurator fiscal proposes to petition within 28 days for warrant to arrest and commit a person suspected of a drug-trafficking offence, that the suspicion is reasonable and that it is intended that the trial should proceed in the High Court. We recommend a provision in somewhat different terms. We propose that a restraint order should be competent where the court is satisfied that it is proposed to institute proceedings against a person for an offence to which Part I of the draft Bill applies. Further, as in a case where an application is made when proceedings are in progress, it should appear to the court that there are reasonable grounds for thinking that a confiscation order might be made in the event of conviction. We do not recommend, however, the adoption of the condition in section 8(1)(b) of the 1987 Act that the court should be satisfied "that the suspicion is reasonable". A Scottish court would have no means of forming an independent judgment on that matter and would have little alternative to accepting the ipse dixit of the prosecutor. We do not envisage the introduction into Scottish practice of some novel procedure whereby the prosecutor would lodge affidavits or would otherwise provide the court with detailed information in support of the proposed charge. We therefore consider that that condition should be deleted from section 8(1)(b) and should not appear in the draft Bill.

9.22

Section 8(4) of the 1987 Act provides that if the 28 days expire without the petition having been presented, the restraint order must be recalled. There is a question whether it would be appropriate to adopt the 28-day limit in the draft Bill. There is no time-limit in the corresponding provisions in other legislation, which state only that the order should be discharged if the proceedings are not instituted within such time as the court considers reasonable.

^[487]

^[488]

recommend

48. (1) The court should also be entitled to make a restraint order where -

(a) the court is satisfied that the prosecutor proposes within 28 days to institute proceedings against a person for an offence of the kind specified in recommendation 2 above; and

(b) it appears to the court that there are reasonable grounds for thinking that a confiscation order may be made in the event of conviction.

(2) Where the proposed proceedings have not been instituted within 28 days the prosecutor should be obliged to apply to the court immediately upon the expiry of the 28 days for the recall of the restraint order and the court should be required to grant the application.

(Draft Bill, clause 22(1), (3)(a), (4))

Prosecutor's applications after sentence

It should also be possible for the court to make a restraint order in the two situations discussed in Part VII where property comes to light after the offender has been sentenced and the prosecutor makes an application for a confiscation order: for a new order, where an order has already been made,

^[489]

^[490]

We consider that it would be appropriate to amend the provisions of Part I of the 1987 Act as to when a restraint order should be competent in such a way as to make them consistent with the corresponding provisions of the draft Bill. We recommend:

49. (1) The court should be entitled to make a restraint order where the prosecutor has made an application in terms of either recommendation 38 or recommendation 42 above and it appears to the court that there are reasonable grounds for thinking that the application may be granted.

(2) The court should also be entitled to make a restraint order where -

(a) the court is satisfied that the prosecutor proposes within 28 days to make an application in terms of either recommendation 38 or recommendation 42 above; and

(b) it appears to the court that there are reasonable grounds for thinking that the application may be granted.

(3) Where the proposed application has not been made within 28 days the prosecutor should be obliged to apply to the court immediately upon the expiry of the 28 days for the recall of the restraint order and the court should be required to grant the application.

(4) Part I of the Criminal Justice (Scotland) Act 1987 should be so amended as to give effect to recommendations 46 to 49(3) above.

(Draft Bill, clauses 22(1), (3)(b), (4), 39(3); Schedule 3, paragraphs 11, 32)

Procedure in applications for restraint orders^[491]

We propose that, as in other legislation, a restraint order should be made only on the application of the prosecutor.

ex parte

recommend

50. (1) A restraint order -

(a) should be made only on an application by the prosecutor;

(b) should be made on an ex parte application which should be heard in chambers; and

(c) should be intimated to persons affected by the order.

(2) Where a restraint order is made in relation to heritable property in Scotland, the prosecutor should forthwith record a certified copy of the order in the General Register of Sasines or, as the case may be, register it in the Land Register of Scotland.

(Draft Bill, clause 21(1), (3), (5))

Variation and recall of restraint orders

We propose that, as with restraint orders made under the confiscation provisions of other statutes, the court should be entitled to vary or recall a restraint order on the application of the prosecutor or any person having an interest, and should be required to recall it when proceedings for the offence are concluded.

A "person having an interest" includes both the accused and the recipient of a gift. The accused may seek a variation because, for example, he wishes to deal with property he has acquired since the order was made;

We recommend:

51. (1) The court should be entitled to vary or recall a restraint order at any time on the application of the prosecutor or any person having an interest.

(2) Where a restraint order is in force after a confiscation order has been made, an administrator should not realise the property concerned in the period between the making of an application for the recall of the order and the court's decision on the application.

(3) The court should be entitled to grant an application for recall at the instance of the recipient of a gift if the recipient satisfies the court on a balance of probabilities that the three conditions referred to in recommendation 19(2) above are met.

(4) Where the court has recalled a restraint order at the instance of a person having an interest, it should be entitled to order that property of that person shall cease to be realisable.

(5) Where -

(a) proceedings for the offence, or

(b) proceedings in an application by the prosecutor in terms of recommendation 49(1) above have been concluded, the prosecutor should be required to apply to the court forthwith for the recall of the restraint order and the court should be required to grant the application.

(6) Proceedings in an application in terms of recommendation 49(1) above should be taken to have been concluded where -

(a) the application is refused, or

(b) the confiscation order made when the application was granted is satisfied either by payment of the amount due or by the offender serving a period of imprisonment in default.

(7) Where the court has recalled a restraint order relating to heritable property in Scotland, the prosecutor should forthwith record a certified copy of the recalling order in the General Register of Sasines or, as the case may be, register it in the Land Register of Scotland.

(Draft Bill, clauses 22(5), (6), (8), 24(1), (2), (3), (4))

Appeals

9.29

Part I of the Criminal Justice (Scotland) Act 1987 does not make any provision for appeals against decisions in relation to restraint orders. In the Court of Session an application for a restraint order is made by petition to the Outer House, and applications for the variation or recall of the order are made by motion in the process of the petition to which the application relates.

We consider that it would be in the interests of uniformity of practice and consistency in decisions if the appeal rules in the Court of Session and the sheriff court were the same, with the result that a reclaiming motion or an appeal could be taken to the Inner House of the Court of Session without leave. The time for reclaiming or appealing should be prescribed by Act of Sederunt. We therefore recommend:

52. (1) It should be competent to reclaim or appeal to the Court of Session without leave against an interlocutor refusing or varying or recalling or refusing to vary or recall a restraint order, within such period as may be prescribed by Act of Sederunt.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be so amended as to give effect to recommendations 50 to 52(1) above.

(Draft Bill, clauses 24(5), 39(3); Schedule 3, paragraph 11)

Ancillary powers

9.31

Once a restraint order has been made under Part I of the Criminal Justice (Scotland) Act 1987 the Court of Session may exercise a number of ancillary powers. It may interdict a person from dealing with the property affected by the order even though that person is not named in the order; it may order the inhibition of heritable property affected by the order, or grant warrant for the arrestment of moveable property so affected; and it may appoint an administrator. We propose in the following paragraphs that courts which make restraint orders in terms of the new legislation should have similar powers. It is also a consequence of the making of a restraint order under the 1987 Act that a constable, or a person commissioned by the Commissioners of Customs and Excise, may seize any property subject to the order for the purpose of preventing its removal from Great Britain. The property seized is dealt with in accordance with the directions of the court.

^[513]

recommend

53. (1) A constable or a person commissioned by the Commissioners of Customs and Excise should be entitled to seize property subject to a restraint order for the purpose of preventing its removal from the jurisdiction of the court.

(2) The property should then be dealt with in accordance with the directions of the court.

(Draft Bill, clause 21(6), (7))

Interdict

As in section 12 of the 1987 Act, the court should have power to interdict a person who is not subject to a restraint order from dealing with property affected by the order. Such a person may be in possession of property belonging to the offender or to the recipient of a caught gift. The definition of "dealing with" and the rules as to an application for such an interdict, variation, recall and appeals should be the same as for a restraint order. In addition, where the restraint order relative to the interdict is recalled, the clerk of court should have the duty of so informing forthwith each of the persons interdicted. We recommend:

54. (1) The court should be entitled to interdict a person not subject to a restraint order from dealing with property affected by the order.

(2) The procedural rules applicable to restraint orders should apply to such an interdict.

(3) Where the restraint order is recalled, the clerk of court should be obliged so to inform forthwith each of the persons interdicted.

(Draft Bill, clauses 24(6), 25(8)-(10))

Inhibition

9.33

In the 1987 Act the inhibition of heritable property affected by a restraint order or by an interdict under section 12 is regulated by section 11. Inhibition is a procedure whereby a person may be prevented from dealing with heritable property. Since inhibition proceeds on a writ passing under the Signet, or Seal, of the Court of Session, it is not competent in the sheriff court. The procedure under section 11 is too cumbersome to be convenient in an emergency. The Lord Advocate must apply to the Court of Session for a warrant for inhibition; he must then have a certified copy of the interlocutor served personally by messengers-at-arms on the person to be inhibited; and he must have the execution of service of the inhibition recorded in the Register of Inhibitions and Adjudications. It is only then that the person is inhibited, unless advantage is taken of a procedure under section 155 of the Titles to Land Consolidation (Scotland) Act 1868 whereby a notice of inhibition may be recorded prior to the recording of the inhibition itself and will take effect from the date of recording of the notice if the inhibition is recorded within 21 days.

9.34

We propose to substitute for this procedure a simpler scheme for cases where heritable property in Scotland is affected by a restraint order. This scheme would replace the existing provisions in section 11 of the 1987 Act and in the corresponding paragraph 16 of Schedule 4 to the Prevention of Terrorism (Temporary Provisions) Act 1989. The Court of Session or the sheriff in the exercise of his civil jurisdiction would be entitled, on the application of the prosecutor, to make an order inhibiting any person who had been interdicted by the restraint order, or had been interdicted in relation to the property by an ancillary interdict. We would expect that as a general rule, in a case where the prosecutor was seeking a restraint order affecting heritage he would make such an application at the same time, and the court would make both orders together. The recording of a certified copy of the order for inhibition in the Register of Inhibitions and Adjudications would have the same effect, from the date of recording, as if letters of inhibition at the instance of the prosecutor had been signeted, executed against the person named in the order and recorded. The inhibition would prescribe on the lapse of five years from the date of recording.

^[514]

Arrestment

Section 11 of the 1987 Act also deals with the arrestment of moveable property affected by a restraint order. In a civil action for payment, arrestment is a procedure whereby the pursuer may attach moveable property of the defender which is in the hands of a third party, and debts and obligations to account to the defender by a third party, with the object of obtaining from the subjects attached the payment of his debt, in whole or in part, in the event of his succeeding in the action. The effect of the arrestment is to prohibit the defender from alienating, and the third party from parting with, the subject. Under section 11, a warrant for arrestment granted by the Court of Session on the application of the Lord Advocate attaches moveable property if it would be arrestable were the person entitled to it a debtor.

^[515]

Provisions applicable to inhibition and arrestment

We propose that the prosecutor should be required to intimate the making of an order for inhibition, or the granting of a warrant for arrestment, to any persons thereby affected. The recording of a certified copy of an order for inhibition, or the execution of a warrant for arrestment, should not prejudice the exercise of an administrator's powers in respect of the property concerned; and when the relevant restraint order ceases to have effect, the prosecutor should be required to apply to the court for the recall or restriction of the inhibition or arrestment and to transmit a copy of an order recalling or restricting an inhibition to the Keeper for recording in the Register.

9.37

We recommend:

55. (1) The procedures for inhibition and arrestment relative to property affected by a restraint order or by an ancillary interdict should be regulated as described in paragraphs 9.34 to 9.36.

(2) The procedure for inhibition in section 11 of the Criminal Justice (Scotland) Act 1987 and paragraph 16 of Schedule 4 to the Prevention of Terrorism (Temporary Provisions) Act 1989 should be replaced by the procedure described in paragraph 9.34.

(Draft Bill, clauses 25, 39(3), (4); Schedule 3, paragraph 12; Schedule 4, paragraph 12)

Disclosure

9.38

A remarkable feature of the practice of the courts in England and Wales in making a restraint order is the inclusion in the order of a requirement that the defendant should disclose the value, nature and whereabouts of his assets, with a condition that the material so disclosed should not be used in the prosecution of the defendant.

Administrators

Part I of the 1987 Act empowers the Court of Session, on the application of the Lord Advocate, to appoint an administrator in respect of property affected by a restraint order. We understand that it has very seldom been necessary to appoint an administrator but the scheme has been found to work satisfactorily. We therefore propose the amendment of sections 13 to 24 of the 1987 Act to reflect the recommendations made in this report, and the adoption of virtually identical provisions in the draft Bill. The amendments are listed in Schedule 3 to the draft Bill and their effect is shown in Appendix B. The corresponding provisions of the draft Bill relative to administrators are set out in Schedule 1. Later in this report we recommend that it should also be competent to appoint an administrator in relation to forfeitable property.

^[520]

We now explain the effect of the amended provisions of the 1987 Act and the matching provisions in Schedule 1 to the Bill in so far as they relate to an administrator appointed in relation to realisable property. An administrator may be appointed, on the application of the prosecutor, either by the Court of Session or by the sheriff in the exercise of his civil jurisdiction, according as the relevant criminal proceedings are High Court or sheriff court proceedings. His functions are to manage or otherwise deal with property affected by a restraint order and, where a confiscation order has been made, to realise the property.

recommend

56. (1) The provisions of Part I of the Criminal Justice (Scotland) Act 1987 relative to administrators should be amended to take account of the recommendations in this report.

(2) Corresponding provisions should be inserted in the draft Bill.

(Draft Bill, clauses 26, 39(3); Schedule 1; Schedule 3, paragraphs 14-21)

Sequestration, insolvency and related matters

Sections 33 to 37 of the 1987 Act deal with the interrelationship between procedures under restraint orders or confiscation orders on the one hand and, on the other, the law relating to sequestration, insolvency and related matters. As with the 1987 Act's provisions relative to administrators, we recommend some amendment of these sections and the insertion into the draft Bill of provisions in virtually the same terms. The amendments are listed in Schedule 3 to the Bill and their effect may be seen in Appendix B. The matching provisions of the Bill are contained in Schedule 2, which also deals with sequestration, insolvency and related matters in relation to proceedings leading to forfeiture.

9.43

Section 33 of the 1987 Act, as amended,

We propose, however, to remove an anomaly in section 35 in relation to gratuitous alienations and unfair preferences. Section 33, which deals with the sequestration of the estate of a person who holds realisable property, provides that where the person has made an implicative gift, the gift cannot be restored to his estate as a gratuitous alienation or unfair preference so long as the criminal proceedings against him have not been concluded or so long as the property of the recipient is subject to a restraint order.

^[538]

^[539]

^[540]

We note that section 33(5)(b) provides that where, after the conclusion of the proceedings, a decree is granted in respect of a gratuitous alienation or unfair preference, the decree must "take into account" any realisation of property held by the person to whom the implicative gift was made. It would therefore appear that if by surrendering for realisation the gratuitous element in the gift the recipient has effectively given full consideration for it, no decree should be pronounced. This seems to reflect the law in England and Wales which confers on the court wide discretionary powers as to the adjustment of a company's prior transactions at undervalue,

^[541]

^[542]

Section 36 provides, in terms analogous to those of sections 33 to 35, for cases where property held subject to a floating charge is realisable property. Section 37 is concerned with the protection of the position of an insolvency practitioner who deals in good faith with property which is subject to a restraint order: his entitlement to expenses is safeguarded, and he is liable only for loss or damage caused by his negligence.

^[543]

recommend

57. (1) Sections 33 to 36 of the Criminal Justice (Scotland) Act 1987 should be amended as proposed in paragraphs 9.43 and 9.44.

(2) Provisions corresponding to sections 33 to 37 of the 1987 Act, as so amended, should be inserted in the draft Bill.

(Draft Bill, clauses 35(1), 39(3); Schedule 2; Schedule 3, paragraphs 27-30)

Investigative powers

We now discuss three matters about which we make no recommendations: special investigative powers, the disclosure of information held by Government departments and the disclosure of information by the accused.

Disclosure of information held by Government departments

Section 41 of the 1987 Act prescribes a procedure whereby the Court of Session may on an application by the Lord Advocate order that material in the possession of an authorised Government department

^[548]

The Drug Trafficking Offences Act 1986 contains provisions corresponding to sections 38 to 41 of the 1987 Act,

^[549]

^[550]

Disclosure by the accused

In England and Wales the court may order the defendant in a drug-trafficking case to give it such information as it may specify for the purpose of assisting it to carry out its functions in relation to the making of a confiscation order. If the defendant fails without reasonable excuse to comply with the order, the court may draw such inference from that failure as it considers appropriate.

^[551]

"Abolition of the right of silence in other contexts may be controversial; in this context it appears to have passed unnoticed. There appears to be no statutory protection against the use of information disclosed in compliance with such an order in a subsequent prosecution, if the offender discloses (expressly or by implication) the commission of other offences, whether involving drug trafficking or not."^[552]

In their Report on Part VI of the 1988 Act the Home Office Working Group recommended that provisions to the same effect should be added to Part VI,^[553] but that recommendation has not been implemented by the Criminal Justice Act 1993. We are not satisfied that such powers are necessary in Scotland, and we make no recommendation.

Offences

Section 42 of the Criminal Justice (Scotland) Act 1987 supports investigations into drug trafficking by creating a new offence of doing anything likely to prejudice such an investigation. The corresponding section 31 of the Drug Trafficking Offences Act 1986 creates the more precisely defined offence of making any disclosure likely to prejudice such an investigation, later named "tipping-off" in the Criminal Justice Act 1993. Section 43 of the 1987 Act, which matches section 24 of the 1986 Act, creates the offence of assisting another to retain the proceeds of his drug trafficking, a form of "money laundering". Further offences in connection with money laundering and tipping-off are added by the 1993 Act not only to the 1987 Act but also to the 1986 Act and the Criminal Justice Act 1988.

recommend

58. The criminal conduct to which the offences created by sections 93A to 93D of the Criminal Justice Act 1988 refer should include any offence punishable on summary complaint by a fine in excess of level 5 of the standard scale or by imprisonment for more than three months or by both such fine and imprisonment.

(Draft Bill, clause 39(4); Schedule 4, paragraph 9)

Part X Protection of third parties' rights in confiscation proceedings

International conventions

It is necessary that the procedure for making a confiscation order should protect the rights of third parties who have interests in the property which is liable to be realised in order to satisfy the order.

^[558]

^[559]

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."^[560]

Article 5 of the Laundering Convention provides:

"Each Party shall adopt such legislative and other measures as may be necessary to ensure that interested parties affected by measures under Articles 2 and 3 shall have effective legal remedies in order to preserve their rights."

Article 2.1 is concerned with, amongst other things, the confiscation of the proceeds of crime, and article 3 with provisional measures for the prevention of the disposal of property which is liable to confiscation. The Explanatory Report on the Convention published by the Council of Europe, which includes a commentary on the text of the Convention, does not claim to provide an authoritative interpretation of its provisions but is intended to facilitate the understanding of them. Part of the commentary on article 5 is in the following terms:^[561]

"31. Interested parties are basically all persons who claim that their rights with respect to property subject to provisional measures and confiscation are unjustifiably affected. These claims should in principle be honoured in cases where the innocence or bona fides of the party concerned is likely or beyond reasonable doubt. As long as no final confiscation order has been made against him, the accused may also qualify as an interested party. The legal provisions required by this article should guarantee 'effective' legal remedies for interested third parties. This implies that there should be a system where such parties, if known, are duly informed by the authorities of the possibilities to challenge decisions or measures taken, that such challenges may be made even if a confiscation order has already become enforceable, if the party had no earlier opportunity to do so, that such remedies should allow for a hearing in court, that the interested party has the right to be assisted or represented by a lawyer and to present witnesses and other evidence, and that the party has a right to have the court decision reviewed."

Provisions already discussed

Several of the provisions of the draft Bill which we have already discussed are designed to protect the rights of third parties. Among the general principles governing the exercise of powers by the court or an administrator are the principles that the powers should be exercised with a view to realising no more than the value for the time being of a caught gift and, where a person other than the offender or a recipient of a caught gift is concerned, with a view to allowing that person to retain or recover the value of any property held by him.

The commentary on article 5 points out that the accused may qualify as an interested party within the meaning of that article as long as no final confiscation order has been made against him.

Compensation

We consider that compensation should be payable for loss or damage sustained as a result of the exercise of the powers of the court or an administrator in relation to the preservation and realisation of property. The accused or the recipient of what is taken to be a caught gift may suffer loss as a result of the imposition of restraint orders, as may a person with an interest in the property under restraint who may or may not have been himself constrained by an ancillary interdict. An innocent third party will suffer loss if by some error his property is realised to satisfy a confiscation order.

10.5

There are two broad approaches to the formulation of a compensation scheme. The first, which was favoured by the Hodgson Committee, is to give the court a general discretion to award compensation: the Committee proposed that if the defendant was acquitted, the trial judge should have a discretion to order either the payment of compensation in a stated amount or an inquiry as to the damage suffered.

"... considerable protection is afforded to the individual by the interposition of an independent public prosecutor charged with the responsibility (in his discretion) of initiating a prosecution only where, inter alia, sufficient evidence exists to support it, the matter is of sufficient importance to justify it and ... there is no reason to suspect that the information is inspired by malice or ill-will on the part of the informant towards the person accused."^[576]

It may therefore be justifiable to limit compensation to cases where there has been "serious default". It may also be said in favour of the scheme that it limits any likelihood of compensation being paid to unmeritorious persons, unlike the Hodgson Committee's scheme which would require the court to make invidious distinctions between those applicants who should receive compensation and those who should not.^[577] The conditions imposed by section 26 reduce the discretionary element in the decision. It is also true that a decision on an application may be reclaimed against or appealed;^[578] and that the scheme is stated to be without prejudice to any right which may otherwise exist to institute proceedings in respect of delictual liability.

We have concluded that the scheme is acceptable, subject to minor amendment, in a case where the proceedings have not succeeded. It makes no provision, however, for a case where a confiscation order has been made and property belonging to a person other than the accused or a recipient has been realised in error. That may seem a remote possibility, given that such a person should have had an opportunity to apply for the recall of the preceding restraint order in relation to his property, but it appears to us to be prudent to make provision for it in view of the terms of the European Convention on Human Rights and the Laundering Convention.

^[579]

^[580]

We now explain our proposals in detail. First, we propose that section 26 of the 1987 Act should be amended to correspond with the current compensation provisions in other confiscation legislation

^[581]

^[582]

(i) An application may be made by a person who held property which was realisable property.

(ii) The application must be made not later than three years after the conclusion of the proceedings^[583] in respect of which the confiscation order was made.^[584]

(iii) The application is made to the Court of Session if the criminal proceedings concerned took place in the High Court of Justiciary, or to the sheriff exercising his civil jurisdiction if they took place in the sheriff court.

(iv) Compensation is payable only where proceedings have been instituted against a person for an offence to which Part I of the 1987 Act, or of the draft Bill, applies.^[585] Compensation is not, accordingly, payable where a restraint order has been made before the institution of proceedings and the proceedings have never been instituted. In such a case, however, the property should not have been under restraint for more than 28 days.^[586]

(v) Further, the accused must have been successful. Either the proceedings have not resulted in a conviction, or he has been convicted but either the conviction has been quashed or he has obtained a Royal pardon.

(vi) The court must be satisfied as to three matters: (a) that there has been some serious default on the part of a person concerned in the investigation of the offence; (b) that the proceedings would not have been instituted or continued but for that default; and (c) that the applicant has suffered loss or damage in consequence of anything done in relation to the property under the powers referred to above.

(vii) Even if those three conditions are met, the applicant is not thereby entitled to compensation. The court may order payment of compensation only if, having regard to all the circumstances, it considers it appropriate to do so. It is possible, for example, that the court would decline to award compensation to an accused who had obtained an unmeritorious or technical acquittal.

(viii) If the court decides to award compensation, the amount is to be such as the court thinks just in all the circumstances of the case. It is to be paid by the authority on whose behalf the person in serious default was acting.

(ix) The power of the court to award compensation is without prejudice to any right which may otherwise exist to institute proceedings in respect of delictual liability disclosed by such circumstances as are mentioned in (iv) above.

Secondly, we propose that provision should be made for the payment of compensation to a person other than the accused or the recipient of a caught gift (or, in the 1987 Act, an "implicative gift") who was the owner of, or had an interest in, property which has been realised. Such a person should be entitled to compensation on satisfying the court on a balance of probabilities that he was the owner of the property or had a specified interest in it. The measure of compensation should usually be, for the owner, the amount received on realisation of the property, and for a person with an interest other than as owner, the proportion of that amount which corresponds to the extent of his interest. We discuss the quantification of compensation more fully in the context of the payment of compensation where property has been forfeited in error.

^[587]

^[588]

All these proposals, we believe, meet the requirements of article 5 of the Laundering Convention as these are explained in the extract from the Council of Europe's Report which we have quoted above,

^[589]

^[590]

We note, however, that a third party appears not to be entitled to legal aid for the purpose of being represented before a criminal court. A third party who proposed to apply to the Court of Session, or to the sheriff exercising his civil jurisdiction, in relation to a restraint order, compensation or any of the other matters on which he was entitled to be heard could, we believe, apply for legal advice and assistance and for legal aid under the civil legal aid scheme. If, however, he applied to the High Court, or to the sheriff exercising his criminal jurisdiction, for a declaration that a gift should not be realisable,

^[591]

^[592]

We recommend:

59. (1) Section 26 of the Criminal Justice (Scotland) Act 1987 should be so amended as to correspond with the terms of paragraph 10.7.

(2) Identical provisions should be inserted in the draft Bill.

(3) A person other than the accused or the recipient of a caught gift who is the owner of, or otherwise has an interest in, property which has been realised should be entitled to apply for compensation not later than three years after the conclusion of the proceedings to the Court of Session, where the confiscation order was made in the High Court of Justiciary, or to the sheriff exercising his civil jurisdiction, where the order was made in the sheriff court.

(4) The court should be required to grant the application if the applicant proves on a balance of probabilities that immediately before the realisation of the property he was the owner of, or a person otherwise having an interest in, the property.

(5) The amount of compensation payable to the owner of property which has been realised should be -

(a) where a consideration has been received, an amount equal to the amount of the consideration or its value at the time of the realisation, or

(b) where no consideration has been received, an amount equal to the value of the property as at the date of the realisation.

(6) The amount of compensation payable to a person who has an interest in property which has been realised should be an amount corresponding to the extent of his interest.

(7) The 1987 Act should be amended to make similar provision for the payment of compensation to a person other than the accused or the recipient of an implicative gift.

(Draft Bill, clauses 14, 39(3); Schedule 1, paragraph 10; Schedule 3, paragraph 23)

B. FORFEITURE OF PROPERTY USED IN CRIME

Part XI Forfeiture: Introduction

Our reference and the Laundering Convention

11.1

We now address that part of our reference which requires us to consider

"the adequacy of the present law and the procedure relating to the forfeiture, in criminal proceedings in Scotland, of property used for the purpose of committing, or facilitating the commission of, offences ... ."^[593]

As we have already noted,^[594] the United Kingdom has ratified the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime ("the Laundering Convention"). In Chapter II, which prescribes "Measures to be taken at national level", article 2.1 provides in part:

"Each Party shall adopt such legislative and other measures as may be necessary to enable it to confiscate instrumentalities ..."

"Instrumentalities" means:

"any property used or intended to be used, in any manner, wholly or in part, to commit a criminal offence or criminal offences."^[595]

"Confiscation" is defined as:

"a penalty or a measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences resulting in the final deprivation of property."^[596]

As we shall immediately explain, "confiscation" in the Laundering Convention includes, where appropriate, "forfeiture" in the sense in which that expression is used in our reference.^[597] In arriving at our recommendations we have therefore kept in view the need for compliance with the requirements of Chapter II of the Laundering Convention.

We shall begin by defining the meaning of "forfeiture",

Definition of "forfeiture"

Our reference is concerned with forfeiture in the sense of the power of a criminal court to take property connected with the commission of an offence after a person has been convicted.

^[605]

^[606]

^[607]

Objectives of forfeiture

The purpose of a court order for the forfeiture of property connected with the commission of an offence may be the punishment of the offender, or the prevention of crime, or both.

^[608]

^[609]

^[610]

The European Convention on Human Rights

When considering the reform of the law and practice relative to forfeiture it is necessary to keep in view not only the requirements of the Laundering Convention but also the terms of the first paragraph of article 1 of the First Protocol to the European Convention on Human Rights which we have quoted above.

^[611]

^[612]

^[613]

The present law

The Scottish criminal courts have both a general statutory power to order the forfeiture of property used in crime, and specific statutory powers to order forfeiture in relation to particular offences.

"(1) Where a person is convicted of an offence and the court which passes sentence is satisfied that any property which was in his possession or under his control at the time of his apprehension-

(a) has been used for the purpose of committing, or facilitating the commission of, any offence; or

(b) was intended by him to be used for that purpose,

that property shall be liable to forfeiture, and any property forfeited under this section shall be disposed of as the court may direct.

(2) Any reference in this section to facilitating the commission of an offence shall include a reference to the taking of any steps after it has been committed for the purpose of disposing of any property to which it relates or of avoiding apprehension or detection."

The need for reform

Experience has shown that these provisions are unsatisfactory in several respects. Doubts and difficulties have arisen as to the conditions which must be satisfied before forfeiture is competent; the protection of the interests of innocent owners of property which has been forfeited; whether property other than moveable property may be forfeited; and whether a compensation order may be satisfied from the proceeds of forfeited property. There are also several minor procedural problems which frequently occur and could with advantage be resolved. Our discussion paper offered for comment provisional proposals on all these matters. Each proposal and the responses of consultees will be referred to, where appropriate, in the following parts of this report.

Our recommendations in outline

11.8

Our recommendations may be summarised as follows. Where the High Court or the sheriff court is satisfied that a person has committed an offence and that property which was under his control at the time of the offence or his apprehension has been used, or was intended to be used, for the purpose of committing an offence, the court should be entitled to make a "suspended forfeiture order" in respect of that property, whether it be heritable, moveable, corporeal or incorporeal.

We also recommend that provision should be made for the control, by means of orders of court, of property which is liable to be made, or which has been made, the subject of a suspended forfeiture order. The court should have power, both before and after making a suspended forfeiture order, to grant warrants for the search for and seizure of such property and to make restraint orders and ancillary orders which would have the effect of preventing anyone from dealing with the property. We envisage that in practice a restraint order would be resorted to where the property concerned was not in the hands of the prosecutor. In such cases a restraint order would often be advisable prior to the accused's conviction and sentence, and would generally be necessary in order to preserve the property after a suspended forfeiture order had been made.

^[624]

Our other proposals include a recommendation that when sentencing, the court should be entitled to make both a suspended forfeiture order and a compensation order in favour of a victim, and to order that the proceeds of the sale of any forfeited property should be first directed towards satisfaction of the compensation order.

^[625]

We do not recommend the repeal of the courts' specific statutory powers to order forfeiture in relation to particular offences, or the consolidation of the courts' general and specific powers of forfeiture into a single new statutory scheme. We consider, however, that in cases where the court is entitled to make either an order for forfeiture under a specific power or a suspended forfeiture order under our recommended scheme, the prosecutor may opt to move for a suspended forfeiture order, primarily because the rights of third parties would be safeguarded and also because, in an appropriate case, the court would be able to make an effective compensation order.

^[626]

Part XII When a suspended forfeiture order should be competent

Introduction

We discuss in this part the circumstances in which a court should be entitled to make a suspended forfeiture order. The questions we consider are: which courts should have the power to make a suspended forfeiture order;

Courts which should have power to make a suspended forfeiture order

We begin by explaining our view that the procedures which we recommend and have summarised in paragraphs 11.8 to 11.11 above should be competent only in the High Court and the sheriff court. The question of which courts should have powers under any new forfeiture regime arose in the discussion paper in the context of a proposal, which we discuss later, that courts should be given an express power to forfeit heritable and incorporeal property.

^[632]

recommend

60. The power to make a suspended forfeiture order should not be exercisable in the district court.

(Draft Bill, clause 15(13))

Nature of property liable to forfeiture

Under the general powers conferred by sections 223 and 436 of the Criminal Procedure (Scotland) Act 1975 "any property"

On consultation there was general agreement that the matter should be put beyond doubt. Most of our consultees agreed that all categories of property should be liable to forfeiture. The minority who considered that forfeiture of heritable or incorporeal property should be excluded did so on the grounds that forfeiture of such property would involve practical difficulties, or could be a punishment disproportionate to the gravity of the offence. We have concluded that there is no reason in principle why heritable or incorporeal property should not be liable to forfeiture.

recommend

61. A suspended forfeiture order should be competent in respect of any property, wherever situated, whether heritable or moveable, or whether corporeal or incorporeal.

(Draft Bill, clauses 15(2), 38(1))

Relationship between property and commission of offence

In the following paragraphs we consider the question of the conditions which should have to be satisfied as regards the relationship of property to the commission of an offence before a suspended forfeiture order may be made. We begin by examining the question in general terms. We then notice recent legislation on forfeiture in relation to certain road traffic offences, and finally we consider forfeiture in relation to other statutory offences.

General rules

12.6

The Laundering Convention requires each Party to adopt such measures as may be necessary to enable it to confiscate (ie forfeit) "instrumentalities", which it defines as

"any property used or intended to be used, in any manner, wholly or in part, to commit a criminal offence or criminal offences."^[643]

In Scotland, on the other hand, sections 223(1) and 436(1) of the Criminal Procedure (Scotland) Act 1975 provide that property is liable to forfeiture where a person is convicted of an offence and

"the court which passes sentence is satisfied that any property which was in his possession or under his control at the time of his apprehension -

(a) has been used for the purpose of committing, or facilitating the commission of, any offence; or

(b) was intended by him to be used for that purpose."

This part of the subsection has proved to have a few defects. Our recommendations are intended to rectify these defects and to make this part of the subsection satisfy the requirements of the Convention. The first problem is that under sections 223 and 436 the property must have been in the offender's possession or under his control "at the time of his apprehension" and at no other time. This requirement has led to various anomalous situations. If the offender has abandoned the property,^[644] or if the police have seized it,^[645] before his arrest, it cannot be forfeited. In other circumstances there may be room for argument as to whether property such as a motor vehicle which was in the offender's possession or under his control at the time of the offence could still be so described at the time of his apprehension several weeks later.^[646] Some offenders who have in their possession or under their control property which satisfies condition (a) or (b) are cautioned and charged without being arrested at all. We noted such anomalies in our discussion paper.^[647] We also noted that sections 223 and 436 made no mention of ownership of the property.^[648] We asked whether the phrase "in his possession or under his control at the time of his apprehension" should be replaced by a phrase such as "property which was at the time of the offence or at the time of his apprehension in his ownership or possession or under his control".^[649] We have italicised the proposed additional words.

Most of the consultees who considered this question answered it in the affirmative. One was content with the present wording of sections 223(1) and 436(1), two suggested other forms of words, and one pointed out that our proposed formulation would not catch property which had been used in the preparation for a crime (that is, to facilitate its commission) but had been disposed of before the crime was committed. We have concluded that our proposed formulation would cover most of the situations which are likely to arise in practice. We therefore recommend:

62. The property in respect of which a suspended forfeiture order may be made should have been in the ownership or possession of the offender or under his control either at the time of the offence or at the time of his apprehension.

(Draft Bill, clause 15(2))

12.8

The first of the two further, alternative, conditions which must be satisfied before forfeiture is competent under section 223(1) or 436(1) is condition (a): that the property

"(a) has been used for the purpose of committing, or facilitating the commission of, any offence."

This paragraph is drafted in broad terms. The user of the property and the person committing or facilitating the commission of the offence need not be one and the same, and it is not necessary that the convicted person should be either of them. Nor is it necessary that the offence committed should be the offence of which he was convicted.^[650] Thus it is possible that where an accused, A, has been convicted of offence x, the court may forfeit property which was in his possession at the time of his apprehension for that offence but in fact had been used by B for the purpose of the commission of offence y by C. The court's power to forfeit property is accordingly wider than the power to confiscate the proceeds of crime recommended earlier in this report, which is confined to the proceeds of the crime of which the accused has been convicted.^[651] The width of the power to forfeit is nevertheless well established,^[652] and it has not been suggested to us that it is unduly extensive. The terms of paragraph (a) are identical to those of paragraph (a)(i) of section 43(1) of the Powers of Criminal Courts Act 1973. In R v Colville-Scott^[653] the Court of Appeal held that the power to order deprivation under section 43(1)(a) extended to property used by some person other than the offender to facilitate the commission of an offence by the offender. Section 43(3), however, operates only to deprive the offender of his rights, if any, in the property. Under our recommendations, on the other hand, suspended forfeiture orders would operate irrespective of whether the offender or anyone else had rights in the property, but appropriate provision would be made to safeguard the rights of innocent owners.^[654] We consider that the prospect of forfeiture might deter owners of property from knowingly allowing it to be used by others for nefarious purposes.

The meaning of "facilitating the commission of an offence" in subsection (1)(a) of sections 223 and 436 is the subject of subsection (2):

"(2) Any reference in this section to facilitating the commission of an offence shall include a reference to the taking of any steps after it has been committed for the purpose of disposing of any property to which it relates or of avoiding apprehension or detection."

This provision does not appear to have caused any difficulty in practice.^[655] There are several reported examples of the forfeiture of motor vehicles used to facilitate the commission of crimes of dishonesty^[656] and other offences.^[657]

The second, alternative, condition in subsection (1) is that the property -

"(b) was intended by him [ie the convicted person] to be used for that purpose [ie for the purpose of committing, or facilitating the commission of, any offence]."

There is a curious distinction between paragraphs (a) and (b): paragraph (b) is limited by the words "by him", so that before forfeiture can be competent in terms of paragraph (b) the court must be satisfied that the property was intended by the convicted person to have been used for the nefarious purpose. Paragraph (a), on the other hand, does not require that the property should have been used "by him" for the nefarious purpose. It is difficult to see why under paragraph (a) it does not matter whether the property was used by him or anyone else for that purpose, while under paragraph (b) it must have been intended by him, and no-one else, to be used for that purpose. The limitation in paragraph (b) is all the more curious because the intended user need not be the offender: it does not say "intended by him to be used by him for that purpose". The use of the words "by him" in paragraph (b) appears to us to be anomalous because it is inconsistent with the breadth of the rest of subsection (1). Paragraph (b) is satisfied even if the property was not used as intended or the offence was not committed.

12.11

The terms of paragraphs (a) and (b) of subsection (1), and of subsection (2) of sections 223 and 436, appear to us to be satisfactory, subject to the deletion of "by him" from paragraph (b). They would then be consistent with the definition of "instrumentalities" in the Laundering Convention.

^[658]

recommend

63. (1) The property in respect of which a suspended forfeiture order may be made should have been either -

(a) used for the purpose of committing, or facilitating the commission of, any offence; or

(b) intended to be used for that purpose.

(2) "Facilitating the commission of an offence" should be defined as including the taking of any steps, after an offence has been committed, for the purpose of disposing of any property to which it relates or of avoiding apprehension or detection.

(Draft Bill, clause 15(2), (5))

The question has recently arisen whether property should be liable to forfeiture where its only connection with the commission of an offence is the fact that the offence could not have been committed without the use of the property. In Findlay v McNaughtan the appellant was convicted of driving while disqualified, and the sheriff ordered forfeiture of the vehicle he had been driving at the time of the offence. The High Court held that the forfeiture was incompetent on the ground that section 436(1) of the Criminal Procedure (Scotland) Act 1975 did not apply to the offence of driving while disqualified.

^[659]

Woods, Petitioner

^[660]

Findlay

As we shall notice in the following paragraph, sections 223 and 436 of the 1975 Act have been amended by section 37 of the Road Traffic Act 1991 in order to make it clear that the power of forfeiture extends to vehicles used in the commission of specified serious road traffic offences, including driving while disqualified. We consider that there may nevertheless be some doubt as to the competency of forfeiture in respect of other offences where property has been used at the time of the commission of the offence and, while the offence could not have been committed without using the property, it could be argued that the property was being used for another, legitimate, purpose and the offence, properly regarded, was ancillary to that use. It is possible, for example, to support the disapproved ground of judgment in Findlay with an argument that the appellant had used the vehicle not for the purpose of committing the offence, but in order to get from A to B. We consider that such arguments should be excluded, since forfeiture may often be appropriate where property has been used to any extent in the commission of an offence. We therefore propose that, for the avoidance of doubt, there should be a general rule that forfeiture is competent in such cases. Since it is possible to envisage technical statutory offences in respect of which Parliament might consider that forfeiture could never be appropriate, the general rule would not apply where the enactment creating the offence expressly excluded the general rule. We accordingly recommend:

64. Where the use of property is necessary for the commission of an offence, the property should be regarded for the purpose of recommendation 63(1)(a) above as used for the purpose of committing the offence unless, in the case of a statutory offence, the statute creating the offence otherwise provides.

(Draft Bill, clause 15(6))

Road traffic offences

12.14

In our discussion paper

^[661]

^[662]

The Road User and the Law

recommend

65. It should continue to be competent to order forfeiture of a vehicle used in a road traffic offence which is punishable with imprisonment.

(Draft Bill, clause 39(4), (9); Schedule 4, paragraph 11; Schedule 5)

Our discussion paper also posed a second, alternative, question: should courts have a discretion to order forfeiture of a vehicle in respect of all road traffic offences?

^[670]

^[671]

Other statutory offences

Apart from the road traffic legislation, there are many other statutes which create offences and confer specific powers to forfeit property which is related to the commission of the offences.

recommend

66. The various forfeiture provisions in particular statutes should not be consolidated into a single provision.

If the various specific powers of forfeiture are to remain, it is necessary to resolve the question whether it should be competent to make a suspended forfeiture order under the general power in a case to which a specific provision for forfeiture applies. Two recent Scottish cases are relevant to this question. In Donnelly v HM Advocate

^[677]

^[678]

The second case is Aitken v Lockhart,

^[679]

^[680]

Donnelly

The view has been expressed that there is some conflict between Donnelly and Aitken and some doubt as to whether it is appropriate to order forfeiture under the 1975 Act where there are statutory provisions for forfeiture related to the specific offence of which the offender has been convicted.

^[681]

Aitken

Donnelly

^[682]

Donnelly

Aitken

We doubt whether there is any conflict between the two decisions. Donnelly makes it clear that the general provisions in the 1975 Act may be used to forfeit property which is not caught by a specific power of forfeiture, while Aitken indicates that the general power should not be used to forfeit articles whose forfeiture is expressly prohibited by the statute which confers the specific power.

recommend

67. Where a person is convicted of a statutory offence, any property falling within the general provisions recommended in recommendations 62 and 63 above should be liable to forfeiture notwithstanding that it is not liable to forfeiture under the statute creating the offence, unless that statute

(a) expressly excludes the general provisions, or

(b) specifies the category of property which is to be liable to forfeiture under that statute, and the specified category does not include property used or intended to be used as mentioned in recommendation 63(1).

(Draft Bill, clause 15(7), (8))

Notice of penalties

The first procedural question relative to the competency of a suspended forfeiture order is whether it should be necessary, where an accused is prosecuted for a statutory offence in summary proceedings, for the notice of penalties to include a notice that a suspended forfeiture order might be made. Under the present law, where a person is charged under summary procedure with the commission of a statutory offence, the prosecutor must serve on him along with the complaint a notice of the penalties applicable to the offence.

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^[688]

Findlay v McNaughtan

^[689]

In the discussion paper we posed two questions: whether notices of penalty should be required in relation to forfeiture orders at all; and, if so, whether they should be required in relation to forfeiture orders under the general power as well as to orders under specific statutory provisions.

Findlay v McNaughtan

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recommend

68. (1) Where a summary complaint includes any statutory charge, the notice of penalty should give notice of liability to forfeiture under the general power recommended in recommendations 60 to 64 above where forfeiture thereunder is competent, as well as notice of any liability to forfeiture under the statute creating the offence.

(2) Form 46 of Schedule 1 to the Act of Adjournal (Consolidation) 1988 should be amended accordingly.

Conjunction of suspended forfeiture order with probation or absolute discharge

Under subsection (1) of sections 223 and 436 of the Criminal Procedure (Scotland) Act 1975, set out above,

Of the consultees who commented on that proposition only one disagreed, on the ground that forfeiture was not consistent with a probation order or an absolute discharge. That view may have some force in so far as it relates to an absolute discharge, which is granted where the court is of opinion "that it is inexpedient to inflict punishment".

Under sections 223 and 436 of the Criminal Procedure (Scotland) Act 1975 forfeiture is competent where a person is convicted of any offence. None of our consultees suggested that the power to forfeit should be restricted in any way by reference to the nature of the offence which the accused was proved to have committed.

^[705]

We therefore recommend:

69. A suspended forfeiture order should be competent where in respect of any offence -

(a) a person is convicted, whether in solemn or summary proceedings; or

(b) in the case of summary proceedings the court, without proceeding to conviction, makes in respect of a person either an order discharging him absolutely or a probation order.

(Draft Bill, clause 15(1))

Part XIII The making of a suspended forfeiture order

Introduction

13.1

Under our proposed scheme the forfeiture of property is preceded by a suspended forfeiture order which is made by the court after the accused has been convicted. The making of the order would have the effect of starting the running of a period of time at the end of which the property would be automatically forfeited to the Crown. We discuss in Part XIV the length of the period and various practical consequences of the making of the order. In this part we consider the rules of evidence and procedure which should apply in relation to the making of the order. We propose that the court should have a discretion to make an order

Application by prosecutor

We propose that the court should not be empowered to make a suspended forfeiture order on its own initiative but should be entitled to do so only upon an application by the prosecutor. The prosecutor will be the best judge of whether a suspended forfeiture order would create undesirable difficulties - where, for example, a third party has an interest in the property, or the preservation of the property or some other aspect of the execution of the suspended forfeiture order would present problems disproportionate to the value of the property. We have already recommended that a confiscation order may be made only on the application of the prosecutor: in proceedings on indictment, when he moves for sentence or, in a remit to the High Court for sentence, before sentence is pronounced; and in summary proceedings, after the accused has been convicted.

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recommend:

70. (1) The court should be entitled to make a suspended forfeiture order only on the application of the prosecutor.

(2) The application should be made -

(a) in proceedings on indictment, when the prosecutor moves for sentence or, in a remit to the High Court for sentence, before sentence is pronounced;

(b) in summary proceedings, following the conviction of the accused.

(Draft Bill, clause 15(2), (3))

Standard of proof

We propose that before the court may consider making an order it must be satisfied that the conditions prescribed in recommendations 62 and 63 are met - that the property in respect of which the prosecutor's application is made (i) was in the convicted person's ownership or possession or under his control, either at the time of the offence or at the time of his arrest, and (ii) either had been used by anyone for the purpose of committing or facilitating the commission of any offence, or had been intended by anyone to be used by anyone for that purpose. We consider that in many cases these matters will be beyond dispute. Where the charge of which the accused has been convicted specifies that he used the property for the purpose of committing the offence, no question should arise. In many other cases it will be clear from the jury's verdict that they must have accepted evidence relative to the property which indicates that the conditions are satisfied. In such cases, and others, the defence may admit that the conditions are satisfied.

13.4

It is necessary, however, to make provision for cases where, the prosecutor's application having been made, the trial judge expresses some doubt

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^[718]

^[719]

It is important to make clear provision as to the standard of proof which the prosecutor must attain before the court may be satisfied that the conditions have been met. In Part VI of this report we have recommended that in certain matters relative to confiscation orders the burden of proof should lie on the prosecutor, who should be required to establish his case beyond reasonable doubt.

^[720]

recommend

71. In any hearing on the question whether any condition in recommendations 62 and 63 above is satisfied, the burden of proof should lie on the prosecutor, who should be required to establish his case beyond reasonable doubt.

(Draft Bill, clause 15(2))

Judicial discretion

Even if the prosecutor discharges the burden of proving that the statutory conditions for making a suspended forfeiture order are met, the judge would not be required to make an order. As we have already pointed out, the consequent forfeiture would be part of the total penalty imposed on the offender, and the judge would have to consider whether its effect, taken together with any other sentences passed or orders made, would be to create an excessive or inappropriate penalty.

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Presence of moveable property in court

It is the practice of some sheriffs to refuse to make an order for forfeiture unless the property is produced in court or is otherwise in safe custody.

It is obviously desirable that any new procedure should reduce the occurrence of such lapses as far as possible. Under our scheme, in many cases any moveable property which is the subject of an application for a suspended forfeiture order will already have been lodged in court as a production, or seized in terms of a warrant, or will already be the subject of a restraint order.

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recommend

72. Any necessary instructions to prosecutors or clerks of court relative to the lodging with the clerk of court of moveable property which has been made the subject of a suspended forfeiture order should be the subject of directions by Crown Office or Scottish Courts Administration.

We also asked consultees whether it was necessary to introduce an express statutory provision regarding the presence of property in court prior to the granting of an order.

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^[731]

recommend

73. It is unnecessary to enact a statutory provision as to the presence in court of the moveable property to which a suspended forfeiture order relates.

74. Where a court has made a suspended forfeiture order in respect of an article of moveable property, it should be entitled, on the application of the prosecutor, to grant a warrant for the search for and seizure of that article if satisfied that there is reasonable cause to believe that it is to be found in any place or premises specified in the application and that admission thereto has been refused or it is reasonably believed that such admission will be refused.

(Draft Bill, clause 16(2), (3))

Identification of property

It is important that the property which is the subject of a suspended forfeiture order should be clearly identified in the order, especially in cases where the property is not in court when the order is made. In the discussion paper we referred to Rankin v Wright

recommend

75. It is unnecessary to enact any statutory provision as to the identification or specification in a suspended forfeiture order of the property to which it relates.

Identification and notification of third parties

As soon as a suspended forfeiture order is made, there are two matters which should be attended to at once: the protection of the interests of third parties in the property, and, where the property is heritable,

Edinburgh Gazette

recommend

76. (1) If the prosecutor knows or reasonably suspects the identity of a person (other than the offender) as being the owner of, or otherwise having an interest in, the property to which the suspended forfeiture order relates, that person should be named in the order as a person having, or suspected of having, an interest in the property.

(2) Where a person is named in the order in pursuance of paragraph (1) above, the prosecutor should, as soon as may be after the order has been made, notify that person in writing that the order has been made and that he may apply to the court for recall of the order or, in the event of forfeiture, for the return of the property or compensation.

(Draft Bill, clause 15(4), (10)(a))

77. The prosecutor should, as soon as may be after a suspended forfeiture order has been made, insert in the Edinburgh Gazette or some other appropriate publication a notice specifying the terms of the order, if directed to do so by the court.

(Draft Bill, clause 15(10)(c))

Registration of order relating to heritable property in Scotland

Where a suspended forfeiture order relates to heritable property in Scotland, it is necessary that information should be publicly available that the property will be automatically forfeited to the Crown at the end of the period of which the making of the order marks the beginning, unless the order is varied or recalled or is set aside on appeal. We propose that this should be achieved by the recording of a certified copy of the order in the General Register of Sasines or by its registration in the Land Register of Scotland. We consider that it should be the duty of the prosecutor to record or register the certified copy as soon as possible. We recommend later that it should likewise be his duty to record or register a certified copy of any subsequent order varying or recalling the suspended forfeiture order

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^[744]

recommend

78. Where a suspended forfeiture order relates to heritable property in Scotland, the prosecutor should, as soon as may be after the order has been made, record a certified copy of the order in the General Register of Sasines or register it in the Land Register of Scotland.

(Draft Bill, clause 15(10)(b))

Compensation from proceeds of sale of forfeited property

In the discussion paper we sought views on the question whether the court should have power to direct that the proceeds of the sale of forfeited property should be applied towards the satisfaction of a compensation order

We noted in the discussion paper that a provision similar to section 43A had been recommended for Scotland by a Working Party of The Scottish Association of Victim Support Schemes.

We have therefore decided to recommend a scheme whereby the court may make both a suspended forfeiture order and a compensation order

^[754]

In the discussion paper we asked whether the sale of the property should be delayed until the expiry of a period during which an innocent third party would have the right to bring the order under review. All those consultees who responded answered in the affirmative, except for one consultee who favoured early disposal of the property and the payment of compensation to any innocent third party. We must now take account of the Laundering Convention's requirement that the rights of third parties must be preserved.

recommend

79. The court should be entitled to make both a suspended forfeiture order and a compensation order against the same person in the same proceedings, and to order that, in the event of the forfeiture of the property on the expiry of the period mentioned in recommendation 83 below, the property should be sold and the proceeds of sale first directed towards satisfaction of the compensation order.

(Draft Bill, clause 15(9))

Appeals

Where the court has made a suspended forfeiture order, the accused should be entitled to appeal against the order by way of an appeal against sentence, since the order will be part, or all, of his sentence. It would not be practicable to postpone his entitlement to appeal until the property had been forfeited. It is necessary, however, to provide that the property will not be forfeited until the appeal, if it is proceeded with, is determined in favour of the Crown or until the expiry of the period of delay, whichever is the later. It is clearly important that the period of delay, which is for the protection of third parties, should not be cut down in the event of the determination of an appeal within that period. A provision on these lines would match the provisions as to the suspension of forfeiture in sections 264(2) and 443A(1) of the Criminal Procedure (Scotland) Act 1975. Where the court has refused to make a suspended forfeiture order, the steps available to the prosecutor under existing legislation seem to us to be sufficient. In summary proceedings, the prosecutor may appeal on a point of law against the sentence passed.

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^[761]

recommend

80. For the purposes of any appeal or review a suspended forfeiture order should be a sentence.

(Draft Bill, clause 15(12))

81. Where a person appeals against a sentence which consists of or includes a suspended forfeiture order, other than an order relating to moveable property certified in terms of recommendation 84 below, the forfeiture of the property to which the order relates should be suspended until the appeal, if it is proceeded with, is determined in favour of the Crown or until the expiry of the period of delay mentioned in recommendation 83 below, whichever is the later.

(Draft Bill, clause 17(4))

82. Where a suspended forfeiture order relating to heritable property in Scotland is recalled on appeal the prosecutor should, as soon as may be after the appeal has been disposed of, record a certified copy of the Court's interlocutor in the General Register of Sasines or register it in the Land Register of Scotland.

(Draft Bill, clause 20(3))

Part XIV The effect of a suspended forfeiture order

Introduction

We propose that as a general rule the effect of a suspended forfeiture order should be to start the running of a period of time at the end of which the property concerned would be automatically forfeited to and vested in the Crown. The general rule would not apply where the order was recalled or where the accused appealed against conviction or sentence. There would also have to be an exception for special classes of moveable property which ought to be disposed of at once. In the following paragraphs we discuss how long the period of time should be;

Interval between suspended forfeiture order and forfeiture

We begin by considering the length of time which, as a general rule, should elapse between the making of the suspended forfeiture order and the forfeiture of the property to which it relates. The object of having such an interval is to protect the interests of third parties by providing an opportunity for them to apply for the return of their property before forfeiture. How long should the interval be? In the discussion paper we noted that in England and Wales the effect of subsection (4) of section 43 of the Powers of Criminal Courts Act 1973 is that an innocent owner of property which is the subject of a deprivation order has a period of six months in which to apply to the court for the return of the property. We asked our consultees whether in Scotland the period should be six months or some other period.

^[766]

Those who responded suggested a variety of periods between two months and six months. Some of those who favoured six months considered that there was some advantage in having the same period as in England and Wales. There are, however, other considerations which appear to be relevant. Under our recommendations anyone whom the prosecutor believes to have an interest in the property should have been notified of the terms of the order and his remedies, unless his identity or whereabouts are unknown.

^[767]

On the other hand six months seems to us to be a suitable period for heritable property. In general, the ownership of heritable property in Scotland may be readily ascertained from the Land Register of Scotland, while the computerisation of the General Register of Sasines presentment book now makes it possible to ascertain whether a conveyance in favour of a named person has been presented for registration. The ascertainment of the information may be delayed, however, if there is difficulty in identifying persons or property. It is also important that any persons with interests in the property should have sufficient time to consider their positions and negotiate with any administrator appointed to deal with the property or apply to the court for the recall of the suspended forfeiture order insofar as it affects their interests. The same consideration would apply where the heritable property was situated outside Scotland. While six months may seem a generous period, we consider that when devising a novel procedure for the purpose of forfeiting heritage it would be prudent to err on the side of caution. The six months would run from the date of recording or registration of an order relating to heritable property in Scotland, and from the date of the order in any other case.

^[768]

Whatever period or periods may be chosen, where an application for the recall or variation of the suspended forfeiture order has been timeously made

^[769]

^[770]

We recommend:

83. (1) Heritable property in Scotland should be forfeited to and vest in the Crown six months after the date on which a certified copy of the suspended forfeiture order is recorded or registered as mentioned in recommendation 78.

(2) Heritable property situated outside Scotland should be forfeited to and vest in the Crown six months after the date of the making of the suspended forfeiture order.

(3) Moveable property (other than that which has been forfeited immediately in terms of recommendation 84 below) should be forfeited to and vest in the Crown 60 days after the date of the making of the suspended forfeiture order.

(4) Where an application for the recall or variation of the suspended forfeiture order has been made, the property should be forfeited only if and when the application is finally disposed of in favour of the Crown, or on the expiry of the period mentioned in paragraph (1) or (2) above, whichever is the later.

(5) A certificate by the clerk of court should be conclusive evidence of the fact that the property was forfeited on the date specified in the certificate.

(6) Where the property is heritable property in Scotland, the prosecutor should be obliged to record or register a certified copy of the certificate forthwith in the Register in which the suspended forfeiture order was recorded or registered.

(Draft Bill, clause 17(1), (3), (6))

Perishable, dangerous, illegal or valueless moveable property

14.7

In some cases the suspended forfeiture order may relate to property which it would be pointless or dangerous to preserve for any length of time. We propose that such property should be forfeited immediately after the making of the order and thereafter disposed of in an appropriate way. It seems obvious that the classes of property which should be dealt with in this way should include property which is perishable, such as catches of fish; or dangerous, such as weapons or explosives; or which it is unlawful to sell, such as obscene publications, or supply, such as controlled drugs, or possess, such as counterfeit notes or coins. In many cases such items will not be the subject of a suspended forfeiture order but will be forfeited on conviction on a statutory charge under a specific power of forfeiture in the statute creating the offence. In other cases the prosecutor may know that articles such as controlled drugs or explosives are legitimately the property of a third party, such as a doctor or pharmacist or a commercial undertaking from whom they have been stolen: in such cases the prosecutor will not move for forfeiture or a suspended forfeiture order and the articles will be returned to the lawful owner. It seems necessary, however, to make provision for other cases in which articles in any of these categories may be the subject of a suspended forfeiture order. A further category of moveable property for which such provision seems desirable is property of no value which no-one is likely to claim. We understand that in a significant number of cases orders have been made for the forfeiture of articles such as bricks, stones, bottles or pieces of wood which have been produced in trials for breach of the peace or mobbing and rioting.

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While it will generally be very clear whether an article falls into any of these categories, we consider that specific authority for its immediate forfeiture should be provided by a certificate by the prosecutor certifying that the property which it specifies falls into a particular category. It would be regarded as forfeited whenever the certificate was produced to the clerk of court. We envisage that in practice the prosecutor would have the certificate among his papers when he applied for the suspended forfeiture order, and would produce it to the clerk of court as soon as the judge granted the order. We recommend:

84. (1) Moveable property which is of a perishable or dangerous nature or cannot lawfully be sold, supplied or possessed or is of no commercial value should be forfeited immediately after the making of the suspended forfeiture order.

(2) Moveable property should be regarded as falling within any of the categories mentioned in paragraph (1) above if certified as such by the prosecutor in a certificate produced to the clerk of court.

(Draft Bill, clause 17(2))

Responsibility for property subject to a suspended forfeiture order

14.9

We propose that where a suspended forfeiture order is made, the clerk of court should immediately become responsible for the property concerned just as, in current practice, he becomes responsible for property which has been forfeited. Thus, when a suspended forfeiture order is made in respect of any moveable property it should be the duty of the clerk of court to take the property into his possession or control. If the property has been lodged as a production, it will already be in his hands or, where lodging it with him has been impossible because of its nature, in the hands of some person who holds it as his representative.

85. Property which is the subject of a suspended forfeiture order should be placed in the possession or under the control of the clerk of court until the order is recalled or the property is disposed of after forfeiture.

(Draft Bill, clause 15(11))

Disposal of forfeited property

The effect of forfeiture is to vest the property in the Crown. Property which is forfeited under section 223(1) or 436(1) of the Criminal Procedure (Scotland) Act 1975 is disposed of "as the court may direct".

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recommend:

86. Property in respect of which a suspended forfeiture order is in force should in due course be forfeited to and vest in the Crown and thereafter dealt with by the Crown in such manner as seems to it to be appropriate.

(Draft Bill, clause 17(1), (5))

Part XV Variation and recall of suspended forfeiture orders

Introduction

We discuss in this part the rules which should govern the variation or recall of suspended forfeiture orders. The prosecutor may seek a variation if it comes to his notice that his information as to the persons interested in the property was incorrect. A third party who owns or has an interest in property affected by the order may wish to have the order recalled in so far as it affects his property or his interest in the property.

Application by prosecutor for variation

15.2

In order to secure the correct identification of third parties and the protection of their rights, it is necessary to make provision for circumstances in which, after the order has been made, the prosecutor ascertains that incorrect information had been placed before the court as to the interests of third parties in the property. We have already recommended that when the order is made it should name any person known or suspected by the prosecutor to have an interest in the property.

Edinburgh Gazette

recommend

87. (1) If, after a suspended forfeiture order has been made, the prosecutor comes to believe that it does not correctly identify any person having an interest in the property, he should be entitled to apply to the court for the variation of the order.

(2) The application should be made to the court which made the order, at any time before the property is forfeited.

(3) The court should be required to grant any such application.

4) Where the order is varied by the insertion of the name of a person believed to have an interest in the property, the prosecutor should notify the person as mentioned in recommendation 76 above.

(5) Where the order to be varied relates to heritable property in Scotland, -

(a) the prosecutor should, as soon as may be after the order for variation has been made, record or register a certified copy of the order for variation in the Register in which the certified copy of the order to be varied was recorded or registered; and

(b) the property should be forfeited six months after the date of recording or registration of that certified copy of the order for variation.

(6) Where the order is varied and relates to moveable property, the property should be forfeited 60 days after the date of the order for variation.

(7) In any case in which an order for variation is made, the court should be entitled to direct the prosecutor to insert a notice specifying its terms in the Edinburgh Gazette or some other appropriate publication.

(Draft Bill, clause 18(5), (6), (7), (8), (10))

Application by third party for recall

In outline, our proposal here is that an applicant for the recall of a suspended forfeiture order should be required to satisfy the court, on a balance of probabilities, that he is the owner

^[784]

We propose that the application, like a prosecutor's application for variation, should be made to the court which made the order. It is desirable but not, we think, necessary that it should be heard by the judge who pronounced the order: that might not be possible for a variety of good reasons. The application should be competent at any time before the property is forfeited. If it were made shortly before the date when the order would expire, forfeiture would not follow unless and until the application had been disposed of in favour of the Crown.

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The commentary on article 5 of the Laundering Convention states that the claims of interested third parties "should in principle be honoured in cases where the innocence or bona fides of the party concerned is likely or beyond reasonable doubt".

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prima facie

The nature of the matters which the prosecutor would have to prove would depend on whether the applicant (a) was the owner of the property before or at the time of the commission of the offence, or (b) became the owner of the property after the commission of the offence. In case (a), it would be necessary to prove (i) that the applicant knew or ought to have known that the property was intended to be used for the purpose of committing, or facilitating the commission of an offence, and (ii) that he did not take all the steps which were reasonable for him to take to prevent such use. The offence concerned would normally, but not necessarily, be the offence as to which the court was satisfied in terms of clause 15(2) when it made the order: that is, the offence for the commission of which the property had been used or intended to be used. Since, however, one of the justifications for the forfeiture of a third party's property is to deter third parties from letting others use their property to commit offences, it should not matter if A lets B have property for the purpose of committing one kind of crime and B uses it to commit a different kind of crime. Suppose that A lends B some equipment, such as a drill, knowing that B intends to use it for a housebreaking, and B on his way to the house encounters his enemy C, assaults him with the equipment and is arrested. When B is convicted of assault and the court makes a suspended forfeiture order on the ground that the equipment had been used for the purpose of committing the assault, A should not be entitled to get it back on the ground that he only knew that B had intended to use it for the housebreaking. Requirement (ii) above is necessary in order to protect an owner who, having innocently lent his property to another, learns of that person's intention to use it to commit an offence and tries to prevent him from doing so.

15.7

In case (b), where the applicant has become the owner of the property after the commission of an offence, we propose that the prosecutor should be required to prove that the applicant knew or ought to have known that the property had been intended to be, or had been, used for the purpose of committing, or facilitating the commission of, the offence. The rationale here is that where property has been used to commit an offence, those who thereafter acquire it in good faith should be protected, and those who acquire it otherwise should be penalised. Here again we differ from the Hodgson Committee, who were "not satisfied that, as a matter of policy, subsequent purchasers ought to lose their rights even if they acquired the article in the knowledge that it had previously been involved in an unlawful enterprise. They would not thereby condone or assist the illegality".

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^[790]

We would assume that at the hearing of an application for the recall of a suspended forfeiture order it would not be competent for either party, in the absence of the agreement of the other, to found on evidence given by witnesses at the trial. We have envisaged that such evidence might be founded on at the hearing as to the making of the order,

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Even if the prosecutor proved either case (a) or case (b),

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^[794]

We therefore recommend:

88. A person other than the offender who is the owner of, or otherwise has an interest in, any property in respect of which a suspended forfeiture order has been made should be entitled to apply to the court which made the order, at any time before the property is forfeited, for the recall of the order in so far as it relates to the property or his interest in it.

(Draft Bill, clause 18(1), (8), (10))

89. The court should be required to grant the application if -

(1) the applicant proves on a balance of probabilities that he is the owner of, or otherwise has an interest in, the property; and either

(2) the prosecutor fails to prove beyond reasonable doubt that the applicant -

(a) where he was the owner of, or otherwise had an interest in, the property before the commission of an offence,

(i) knew or ought to have known that the property was intended to be used for the purpose of committing, or facilitating the commission of an offence, and

(ii) did not take all the steps which were reasonable for him to take to prevent such intended use; or

(b) where he became the owner of, or otherwise acquired an interest in, the property after the commission of an offence, that he knew or ought to have known that the property had been intended to be, or had been, so used; or

(3) the prosecutor proves beyond reasonable doubt either of the matters mentioned in paragraph (2) above but the court nevertheless considers that in all the circumstances of the case forfeiture would be an excessive or inappropriate penalty upon the applicant.

(Draft Bill, clause 18(1), (2), (3))

15.11

In some cases in which a suspended forfeiture order has been imposed the court may have determined the other elements in the accused's sentence upon the assumption that the property belonged to him and forfeiture would be penal in its effect.

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recommend

90. The court to which an application for the recall of a suspended forfeiture order is made should not be entitled to review any other element in the sentence imposed, or any probation order or order for absolute discharge made, in respect of the offence to which the order relates.

(Draft Bill, clause 18(9))

Where the court grants an application for the recall of an order relating to heritable property in Scotland, the prosecutor should be required to register a certified copy of the order for recall in the Register in which the certified copy of the order recalled was recorded or registered. We recommend:

91. Where the order is recalled and relates to heritable property in Scotland, the prosecutor should, as soon as may be after the order has been recalled, record or register a certified copy of the order for recall in the Register in which the certified copy of the order recalled was recorded or registered.

(Draft Bill, clause 18(4))

15.13

The "effective legal remedies" which must be available to any interested party in terms of article 5 of the Laundering Convention include the right to have reviewed the decision of the court on his challenge to any decision or measures taken.

recommend

92. (1) Both the applicant and the prosecutor should be entitled to appeal against a decision on an application for the recall of a suspended forfeiture order.

(2) The appeal procedure should be as in an appeal against sentence.

(3) Where a suspended forfeiture order relating to heritable property in Scotland is recalled on appeal, the prosecutor should proceed as in recommendation 82 above.

(Draft Bill, clause 20)

Part XVI Search warrants and restraint orders in forfeiture proceedings

Introduction

Where property is liable to be made, or has been made, the subject of a suspended forfeiture order, it is important that the offender or alleged offender should not be able to defeat the order by concealing or disposing of the property. In practice, where the property is moveable he may seldom have an opportunity to do so, because an item of moveable property which is liable to be forfeited will often be seized by the police and may be lodged as a production in the case. It is important, however, to make adequate provision for other cases.

16.2

It is also necessary to have in place a procedure which will meet the obligations of the United Kingdom under the Laundering Convention.

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"Each Party shall adopt such legislative and other measures as may be necessary to enable it to identify and trace property which is liable to confiscation pursuant to Article 2, paragraph 1, and to prevent any dealing in, transfer or disposal of such property."^[802].

Paragraph 1 of article 11, headed "Obligation to take provisional measures", provides:

"At the request of another Party which has instituted criminal proceedings or proceedings for the purpose of confiscation, a Party shall take the necessary provisional measures, such as freezing or seizing, to prevent any dealing in, transfer or disposal of property which, at a later stage, may be the subject of a request for confiscation or which might be such as to satisfy the request."^[803]

The present law only makes provision for search warrants in relation to articles which have been forfeited.

^[804]

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Warrants to search for and seize forfeitable property

The present law

Sections 224 and 437 of the Criminal Procedure (Scotland) Act 1975

^[807]

Warrant where suspended forfeiture order made

We have already recommended

^[808]

Warrant where suspended forfeiture order liable to be made

While sections 224 and 437 make provision for the granting of a search warrant after forfeiture, there is no corresponding statutory provision relative to property which is liable to be forfeited. The common law is not clear. The old case of Mauchline v Stevenson

All those consultees who expressed an opinion on this matter agreed that a general power would be inappropriate, but a few of them pointed to the value of a power to seize specified items in particular cases. Where, for example, a crime has been committed with the use of a motor vehicle, ship or aircraft which could be swiftly disposed of or removed from the jurisdiction, it would be useful if the law enforcement agencies could be empowered to seize it. It was also pointed out that while some articles which are liable to forfeiture might be relevant productions at the trial of the offender and could be seized under a search warrant or common law powers, it might not be competent to seize by those means other articles which were liable to forfeiture. An analogy was drawn with the provision in the confiscation regime for drug trafficking offences in the Criminal Justice (Scotland) Act 1987 whereby the realisable property of a person subject to a restraint order may be seized for the purpose of preventing it from being removed from Great Britain.

^[813]

We therefore propose that a warrant to search for and seize property should be obtainable before a suspended forfeiture order is made. The prosecutor would apply to the sheriff for such a warrant. He would be able to do so either where proceedings for an offence had been instituted

^[814]

recommend

93. Where -

(a) the sheriff is satisfied, on an application being made to him by the prosecutor,

(i) that proceedings are likely to be instituted or have been instituted against a person in Scotland for an offence, and

(ii) that there is reasonable cause to believe that property specified in the application is to be found in a place or in premises specified in the application, and

(b) it appears to him that there are reasonable grounds for thinking that in the event of the person being convicted of the offence a suspended forfeiture order might be made in relation to the property,

he should be entitled to grant a warrant authorising a person named therein to enter and search the place or premises and seize the property.

(Draft Bill, clause 16(1))

Restraint orders in relation to forfeitable property

We also propose a scheme for the preservation of forfeitable property by means of restraint orders and ancillary orders, similar to the scheme in relation to realisable property which we have recommended in Part IX of this report. Our scheme also resembles the provisions of the Prevention of Terrorism (Temporary Provisions) Act 1989 as to the making of restraint orders by the Scottish courts in relation to property liable to forfeiture when a person is convicted of any of certain specified offences connected with financial assistance for terrorism.

^[815]

Under our scheme, power to make restraint orders and ancillary orders is conferred on the Court of Session, where the criminal proceedings concerned are brought, or are likely to be brought, in the High Court of Justiciary; and on the sheriff exercising his civil jurisdiction in the case of criminal proceedings in the sheriff court. The principal order is a restraint order. It interdicts a specified person from dealing with a specified item of property. "Dealing with" property includes, as required by the Laundering Convention, transferring or disposing of property.

ex parte

Once the court has made a restraint order, a police or customs officer is entitled to seize the property for the purpose of preventing its removal from the jurisdiction of the court.

^[822]

^[823]

^[824]

We recommend:

94. (1) The Court of Session or a sheriff exercising his civil jurisdiction should be empowered to make a restraint order in relation to property which is liable to be forfeited.

(2) A restraint order should interdict a specified person from dealing with property specified in the order.

(3) The court should be entitled to make a restraint order

(a) where proceedings against a person for an offence have been instituted, but not concluded, in Scotland and either -

(i) a suspended forfeiture order is in force, or

(ii) it appears to the court that there are reasonable grounds for thinking that such an order might be made in the event of conviction; or

(b) where it is proposed to institute such proceedings within 28 days and paragraph (ii) above applies.

(Draft Bill, clauses 21(1)(b), 23(1), (2))

95. (1) The rules as to applications for restraint orders, their variation and recall, and appeals should be as for restraint orders in relation to realisable property.

(2) The court's powers as to ancillary interdicts, inhibitions and arrestments should be the same as its powers as regards restraint orders in relation to realisable property.

(Draft Bill, clauses 21(3)-(5), 23(3)-(6), 24(1), (3)-(6), 25)

96. The provisions mentioned in recommendation 56(2) above as to administrators of realisable property should be extended, subject to

necessary modifications, to a case in which a restraint order or a suspended forfeiture order is made relative to forfeitable property.

(Draft Bill, clause 26; Schedule 1)

97. (1) A constable or a person commissioned by the Commissioners of Customs and Excise should be entitled to seize property subject to a restraint order for the purpose of preventing its removal from the jurisdiction of the court.

(2) The property should then be dealt with in accordance with the directions of the court.

(Draft Bill, clause 21(6), (7))

98. The provisions mentioned in recommendation 57(2) above as to the sequestration, etc, of persons holding realisable property should be extended, subject to any necessary modifications, to persons holding forfeitable property.

(Draft Bill, clause 35; Schedule 2)

Part XVII Protection of third parties' rights in forfeiture proceedings

Introduction

17.1

We now consider the question of the protection of the rights of third parties who have interests in property which is liable to forfeiture. Our consultees were unanimously agreed that such protection was necessary, and it is required both by the European Convention on Human Rights and by the Laundering Convention. We have already noticed the relevant provisions of these Conventions in our discussion of the protection of third parties' rights in confiscation proceedings.

^[825]

The present law

The present law is unsatisfactory. Some specific provisions for forfeiture for a statutory offence imply that only the property of the convicted person may be forfeited,

^[826]

^[827]

^[828]

Lloyds and Scottish Finance Ltd v HM Advocate

nobile officium

Our recommendations

Several of the recommendations which we have already made are designed to protect the interests of third parties. We now summarise them. Except where the property to be forfeited is perishable or in some other special category, forfeiture should not take place until the expiry of a period during which the property is subject to a suspended forfeiture order.

Edinburgh Gazette

In the following paragraphs we make two further recommendations. Not later than three years after the date on which the property has been forfeited, either under the new legislation or under an order for forfeiture made in terms of any other enactment, the owner should be entitled to apply for its return or, where it has been disposed of, for compensation. Any person with an interest in forfeited property should also be entitled to apply for compensation. In each case the applicant should have the right to appeal against the refusal of his application.

^[840]

^[841]

Recovery or compensation after forfeiture

We now consider measures for the preservation of the rights of an innocent third party after the property has been forfeited. Circumstances may arise in which the third party has not applied for the recall of a restraint order or a suspended forfeiture order made under the new legislation - where, for example, he has not received notice of it - and the property has been forfeited on the expiry of the appropriate time-limit. A forfeiture order under a specific provision in another enactment may have been made without the third party's knowledge.

^[842]

^[843]

^[844]

Our proposals as to the burdens and standards of proof in such applications are similar to those we have made above in relation to an application for the recall of a suspended forfeiture order.

^[845]

recommend

99. (1) The owner of property which has been forfeited, whether under the new legislation or any other enactment, should be entitled to apply to the court which made the suspended forfeiture order for the return of the property or, if that is not reasonably practicable, for compensation.

(2) A person with an interest, otherwise than as owner, in property which has been so forfeited should be entitled to apply for compensation to the court which made the suspended forfeiture order.

(3) The application should be made not later than three years after the date on which the property was forfeited.

(Draft Bill, clause 19(1), (2), (6), (10))

100. The court should be required to grant the application if -

(1) the applicant proves on a balance of probabilities that immediately before the forfeiture of the property he was the owner of, or a person otherwise having an interest in, the property; and either

(2) the prosecutor fails to prove beyond reasonable doubt that the applicant -

(a) where he was the owner of the property before the commission of an offence,

(i) knew or ought to have known that the property was intended to be used for the purpose of committing, or facilitating the commission of an offence, and

(ii) did not take all the steps which were reasonable for him to take to prevent such intended use; or

(b) where he became the owner of the property after the commission of an offence, that he knew or ought to have known that the property had been intended to be, or had been, so used; or

(3) the prosecutor proves beyond reasonable doubt either of the matters mentioned in paragraph (2) above but the court nevertheless considers that in all the circumstances of the case forfeiture would be or has been an excessive or inappropriate penalty upon the applicant.

(Draft Bill, clause 19(1), (3), (4))

Where the application is granted, the property has not yet been disposed of and it belongs wholly to the applicant, it should simply be returned to him, if that is reasonably practicable. Where it has not yet been disposed but the applicant has an interest in it otherwise than as owner, it will normally be necessary to dispose of the property and compensate the applicant from the proceeds. In any event, where the property has been disposed of for whatever reason, the applicant should be entitled to compensation, whatever the extent of his interest. In the ordinary case the property will have been sold and the applicant will be entitled to the price received,

^[846]

^[847]

recommend

101. (1) The amount of compensation payable to the owner of property which has been disposed of should be -

(a) where a consideration has been received, an amount equal to the amount of the consideration or its value at the time of the disposal, or

(b) where no consideration has been received, an amount equal to the value of the property as at the date of the disposal.

(2) The amount of compensation payable to a person who has an interest in property which has been forfeited should be an amount corresponding to the extent of his interest.

(Draft Bill, clause 19(1), (2), (5))

As in the case of a third party's application for the recall of a suspended forfeiture order,

^[848]

recommend

102. The court which considers an application for the return of forfeited property or for compensation should not be entitled to review any other element in the sentence imposed, or any probation order or order for absolute discharge made, in respect of the offence to which the suspended forfeiture order related.

(Draft Bill, clause 19(9))

Just as the prosecutor under our scheme has a duty to secure the correction of any error as to the identity of a third party to whom a suspended forfeiture order or a restraint order relates,

^[849]

^[850]

recommend

103. If, after property has been forfeited under the new legislation, the prosecutor comes to believe that the preceding suspended forfeiture order did not correctly identify any person having an interest in the property, the prosecutor should forthwith -

(a) advise the court of the error, whether or not he knows the identity of any person truly having an interest in the property; and

(b) where he knows or reasonably suspects the identity of any such person, notify that person in writing that he may be entitled to apply for the return of the property or for compensation.

(Draft Bill, clause 19(7), (8))

As in an application for the recall of a suspended forfeiture order or a restraint order, we think that a right of appeal against a decision on an application for the return of forfeited property or compensation is necessary for the protection of the third party's interests, and that the prosecutor should also have a right of appeal. We propose that the procedure should be the same as in an appeal against a decision on an application for the recall of a suspended forfeiture order.

^[851]

recommend

104. (1) Both the applicant and the prosecutor should be entitled to appeal against a decision on an application for the recovery of forfeited property or for compensation.

(2) The appeal procedure should be as in an appeal against sentence.

(Draft Bill, clause 20)

The offender's family home

Among the third parties whose interests should be protected in any new regime for the forfeiture of property used in crime are the family of any person whose family home has been forfeited. We have already recommended in Part IV of this report that there should be some constraint on the disposal of the family home of a person in relation to whom a confiscation order has been made.

^[852]

recommend

105. Where a person's family home has been forfeited under the new legislation, any right or interest in it should be disposed of only in terms of the provisions referred to in recommendation 14.

(Draft Bill, clause 36(1)(b))

C. INTERNATIONAL CO-OPERATION

Part XVIII Reciprocal arrangements for the enforcement of orders

Introduction

In proceedings where confiscation or forfeiture is competent it is possible that the accused may be concerned in transactions or may have interests in property in more than one jurisdiction. We therefore consider that any new Scottish legislation should make provision for effective co-operation in the enforcement of orders not only between Scotland and other parts of the United Kingdom but also between Scotland and jurisdictions outside the United Kingdom. Co-operation with jurisdictions overseas is in any event required by the Laundering Convention. Article 7 provides:

"1. The Parties shall co-operate with each other to the widest extent possible for the purposes of investigations and proceedings aiming at the confiscation of instrumentalities and proceeds.

2. Each Party shall adopt such legislative or other measures as may be necessary to enable it to comply, under the conditions provided for in this chapter,^[853] with requests:

a. for confiscation of specific items of property representing proceeds or instrumentalities,^[854] as well as for confiscation of proceeds consisting in a requirement to pay a sum of money corresponding to the value of proceeds;

b. for investigative assistance and provisional measures with a view to either form of confiscation referred to under a above."

The obligation to take provisional measures imposed by article 7.2.b is the subject of article 11:

"1. At the request of another Party which has instituted criminal proceedings or proceedings for the purpose of confiscation, a Party shall take the necessary provisional measures, such as freezing or seizing, to prevent any dealing in, transfer or disposal of property which, at a later stage, may be the subject of a request for confiscation or which might be such as to satisfy the request.

2. A Party which has received a request for confiscation pursuant to Article 13 shall, if so requested, take the measures mentioned in paragraph 1 of this article in respect of any property which is the subject of the request or which might be such as to satisfy the request."

Article 13, referred to in article 11.2, provides by paragraph 1:

"1. A Party, which has received a request made by another Party for confiscation concerning instrumentalities or proceeds, situated in its territory, shall:

a. enforce a confiscation order made by a court of a requesting Party in relation to such instrumentalities or proceeds; or

b. submit the request to its competent authorities for the purpose of obtaining an order of confiscation and, if such order is granted, enforce it."

In making recommendations on this subject it will be convenient to deal with confiscation and forfeiture separately, and to discuss in relation to each (1) the reciprocal enforcement of orders within the United Kingdom, (2) the enforcement in Scotland of orders made outside the United Kingdom and (3) the enforcement outside the United Kingdom of orders made in Scotland.

Confiscation

Enforcement in England and Wales of orders made in Scotland

18.3

Section 24A of the Drug Trafficking Offences Act 1986

^[855]

^[856]

recommend

106. Provision should be made for the recognition and enforcement in England and Wales of orders and functions relative to Scottish confiscation proceedings in terms similar to section 24A of the Drug Trafficking Offences Act 1986.

(Draft Bill, clause 33)

Enforcement in Scotland of orders made in England and Wales

The enforcement in Scotland of orders made in England and Wales under the Drug Trafficking Offences Act 1986 is provided for by sections 11, 27 and 28 of the Criminal Justice (Scotland) Act 1987, while sections 90 to 93 of the Criminal Justice Act 1988 provide for the enforcement in Scotland of orders made in proceedings under Part VI of that Act. These provisions appear to us to be satisfactory, but we consider that some re-arrangement of them would be useful. First, section 11(6) of the 1987 Act applies the other provisions of section 11, which deal with the inhibition and arrestment of property affected by a restraint order or ancillary interdict, to restraint orders made under section 8 of the 1986 Act. It does so by setting out a large number of modifications to subsections (1) to (5) of section 11 in such a way that it is not easy to understand the result. We propose that section 11(6) should be repealed and its effect restated in a new section inserted as section 28A of the 1987 Act. The provisions of section 11(6) would thus take their logical place in the sequence of sections 27 to 30A of the 1987 Act which deal with reciprocal arrangements for the enforcement of confiscation orders under that Act. Secondly, we propose that sections 90 to 93 of the 1988 Act should be repealed and incorporated, with modifications,

^[857]

recommend

107. Section 11(6) of the Criminal Justice (Scotland) Act 1987 should be repealed and restated in a new section of that Act.

(Draft Bill, clause 39(3), (9); Schedule 3, paragraph 24; Schedule 5)

108. Sections 90 to 93 of the Criminal Justice Act 1988 should be repealed and restated, with modifications, in the draft Bill.

(Draft Bill, clauses 27, 28, 29, 39(9); Schedule 5)

Northern Ireland

There are several provisions for the enforcement of Northern Ireland orders in Scotland. Section 29 of the 1987 Act

recommend

109. Section 95 of the Criminal Justice Act 1988 should be repealed and restated in the draft Bill.

(Draft Bill, clauses 30, 39(9); Schedule 5)

The Criminal Justice (Confiscation) (Northern Ireland) Order 1990

^[862]

recommend

110. Provision should be made by statutory instrument for the enforcement in Northern Ireland of orders made in confiscation proceedings in Scotland under the new legislation.

Enforcement in Scotland of orders made outside the United Kingdom

Sections 30 and 30A of the Criminal Justice (Scotland) Act 1987

We consider that it would be appropriate to enact, with one modification, a similar scheme for the enforcement in Scotland of external confiscation orders made relative to offences corresponding with or similar to those to which Part I of the draft Bill applies. The modification is necessary in order to take account of article 7.2.a of the Laundering Convention which requires compliance with external requests for confiscation of specific items of property representing proceeds (property confiscation) as well as for confiscation of the value of proceeds (value confiscation).

^[868]

^[869]

We note that there seems to be a drafting error in section 30(1) of the 1987 Act as substituted by section 63 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990. In the new section 30(1)(b)(i) and (c) provisions which appear in section 32 of the 1987 Act are repeated. They are therefore redundant and should be repealed.

18.10

We recommend:

111. Section 30(1)(b)(i) and (c) of the 1987 Act should be repealed.

(Draft Bill, clause 39(9); Schedule 5)

112. In section 30(2) of the 1987 Act the definition of "external confiscation order" should be extended to include orders made for the purpose of recovering specific items of property representing proceeds.

(Draft Bill, clause 39(3); Schedule 3, paragraph 25)

113. Provision should be made for the registration and enforcement of confiscation and ancillary orders made outside the United Kingdom relative to offences similar to the offences to which Part I of the draft Bill applies, in terms similar to sections 30 (amended as recommended above) and 30A of the Criminal Justice (Scotland) Act 1987.

(Draft Bill, clauses 31, 32)

Enforcement outside the United Kingdom of orders made in Scotland

18.11

By virtue of section 32(1) of the Criminal Justice (Scotland) Act 1987 such provision as appears to be expedient may be made by Order in Council in connection with the taking of action in a designated country in consequence of the making of a restraint order or of a confiscation order under Part I of the 1987 Act. Section 32(1) further provides that such provision may include a direction that, in such circumstances as may be specified, proceeds arising out of action taken in that country with a view to satisfying a confiscation order which are retained there are nevertheless to be treated as reducing the amount payable under the confiscation order to such extent as may be specified. The rationale of this further provision appears to be that if the proceeds are retained in the designated country the object of depriving the offender of these proceeds will have been achieved and thus they may be treated as reducing the amount payable under the confiscation order. Section 32(1) appears to us to be satisfactory and we therefore propose that the draft Bill should include a provision to the same effect.

18.12

Section 32(2) provides that subsections (9)(a), (10), (11) and (12) of the original section 30 of the 1987 Act are to apply in respect of Orders in Council under section 32 as they apply in respect of Orders in Council under the original section 30. Those subsections were repealed when the whole of the original section 30 was repealed by section 63 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990. While section 32(2) should now be read as referring to the subsections of the new section 30 which correspond to those subsections,

^[870]

We recommend:

114. Section 32(2) of the Criminal Justice (Scotland) Act 1987 should be amended as indicated in paragraph 18.12.

(Draft Bill, clause 39(3); Schedule 3, paragraph 26)

115. Provision should be made for the enforcement outside the United Kingdom of confiscation and ancillary orders made in Scotland in terms similar to section 32 of the 1987 Act, as so amended.

(Draft Bill, clause 34)

Forfeiture

Enforcement in England and Wales of orders made in Scotland

18.14

The only statutory provisions relative to the enforcement in England and Wales of forfeiture orders and ancillary orders made in Scotland seem to be those in paragraphs 8 and 9 of Schedule 4 to the Prevention of Terrorism (Temporary Provisions) Act 1989 which are concerned only with orders made under that Act. It is therefore necessary to provide for the enforcement in England and Wales of suspended forfeiture orders and restraint orders made under the new Act and of forfeiture orders made under specific enactments other than the 1989 Act. We propose that provision should be made by Order in Council for the purpose of enabling the enforcement of such orders. That would most conveniently be done by extending the scope of clause 33, discussed above in relation to confiscation proceedings,

^[871]

recommend

116. The provisions referred to in recommendation 106 above should be extended to include Scottish restraint orders relative to forfeitable property and suspended forfeiture orders made under the new Act and forfeiture orders made under any enactment other than the Prevention of Terrorism (Temporary Provisions) Act 1989.

(Draft Bill, clause 33(1)(c), (2)-(6))

Enforcement in Scotland of orders made in England and Wales or in Northern Ireland

Paragraphs 18 and 19 of Schedule 4 to the Prevention of Terrorism (Temporary Provisions) Act 1989, which apply to Scotland, deal with the enforcement in Scotland of forfeiture orders and restraint orders made under the 1989 Act elsewhere in the British Islands. There seem to be no other relevant statutory provisions. The enforcement in Scotland of orders made in England and Wales or in Northern Ireland, whether these orders are forfeiture orders made under other enactments or orders corresponding to suspended forfeiture orders or restraint orders under the new Scottish legislation, appears to us to be primarily a matter for consideration in the context of the law and practice in England and Wales and in Northern Ireland relative to orders for the forfeiture or deprivation of property in criminal proceedings. We are obviously neither entitled nor qualified to make recommendations for the reform of the law in these jurisdictions.

Enforcement in Northern Ireland of orders made in Scotland

18.16

Again, the only relevant provisions are in the 1989 Act.

^[872]

^[873]

recommend

117. Provision should be made by statutory instrument for the enforcement in Northern Ireland of Scottish restraint orders relative to forfeitable property and suspended forfeiture orders made under the new Act and forfeiture orders made under any enactment other than the Prevention of Terrorism (Temporary Provisions) Act 1989.

Enforcement in Scotland of orders made outside the United Kingdom

There are two sets of statutory provisions concerned with the enforcement in Scotland of forfeiture orders made outside the United Kingdom. The Prevention of Terrorism (Temporary Provisions) Act 1989 provides for the enforcement in Scotland of orders for the forfeiture of terrorist funds and related orders made in a country or territory designated by Order in Council.

^[874]

^[875]

^[876]

We have considered whether to combine with our recommended provisions for the enforcement in Scotland of overseas confiscation orders

^[877]

recommend

118. The application of section 9 of the Criminal Justice (International Co-operation) Act 1990 should be extended to any offence which corresponds to or is similar to an offence to which Part I or Part II of the draft Bill applies.

(Draft Bill, clause 39(4); Schedule 4, paragraph 13)

Enforcement outside the United Kingdom of orders made in Scotland

There do not appear to be any statutory provisions relative to the enforcement of Scottish forfeiture orders in countries or territories outside the United Kingdom. We propose that the recommendations which we have already made as to the enforcement of Scottish confiscation orders outside the United Kingdom

^[878]

recommend

119.

Provision should be made, in terms similar to section 32 of the Criminal Justice (Scotland) Act 1987, amended as proposed in paragraph 18.12, for the enforcement outside the United Kingdom of restraint orders and suspended forfeiture orders made under the new Act and forfeiture orders made under any other enactment.

(Draft Bill, clause 34)

D. MISCELLANEOUS MATTERS

Part XIX Forfeiture of property where the accused has died

Introduction

Under the present law the proceeds of a crime cannot be confiscated if the offender is not amenable to justice: if he cannot be tried, or cannot be sentenced, because he has absconded or died or because he has become insane or suffers from some other medical condition which makes his trial an impossibility. In such circumstances a confiscation order cannot be made and the proceeds of the crime may be enjoyed, or applied for other criminal purposes, by the offender himself or by his accomplices, relations or beneficiaries.

^[879]

^[880]

It would, we think, be generally agreed that in principle the proceeds of a crime should not escape confiscation only because it is not possible to make a confiscation order against the offender. It does not seem acceptable that the proceeds should remain available to him or to his family or accomplices. If the principle is accepted, it becomes necessary to devise some scheme whereby the proceeds may be taken out of circulation by the State. The primary matters for decision are the range of offences to which the scheme is to apply and which of the possible reasons why a confiscation order cannot be made should be a condition for bringing the scheme into operation: that the offender is dead, or has absconded, or is unfit to be tried or sentenced by reason of his mental or bodily condition. There is also a question as to the stage the criminal investigation or process should have reached before the procedure can be set in motion: the stage of the institution of proceedings, or some earlier stage, or a later stage such as the commencement of the trial or the conviction of the accused. Important procedural issues must also be resolved: the nature of the order which should be made, the court which should be entitled to make it, the person or authority who should be entitled to apply for it, the matters to be proved, the burden and standard of proof, the period after the death or other relevant event within which the application must be made, provisional measures before the order is made and the protection of the rights of third parties.

Stage of proceedings

19.3

It seems obvious that it should be a necessary condition of the operation of any scheme that the Crown not only should be in possession of sufficient evidence against the alleged offender to justify the taking of proceedings but also should have instituted proceedings.

^[881]

Range of offences; reasons why confiscation order cannot be made

It will be convenient to consider together the two questions of the range of the offences to which the scheme might apply and the reasons why a confiscation order cannot be made against the accused. Here it is helpful to examine the recently introduced statutory provisions in jurisdictions with confiscation regimes broadly similar to that which we have recommended in Parts II to X of this report. In Australia the relevant provisions are very widely drawn: a confiscation order may be made in relation to any indictable offence where the offender dies, or cannot be found, or is outside Australia and not extradited, or is for any other reason not amenable to justice.

We consider that if it is correct in principle for the State to recover the proceeds of crime although the offender is not amenable to justice, it should be competent to do so not only in relation to drug-trafficking offences but also in relation to any of the other offences in respect of which a confiscation order may be made on conviction.

19.6

The selection of the grounds relative to the offender is more difficult: they range from the broad ground that he is not amenable to justice for any reason to the narrow ground that he has disappeared or absconded. We have concluded that a scheme is clearly necessary only where the offender has died. In at least some of the cases in which he is not amenable to justice for some other reason - because he has absconded, or because of a medical condition - there may be some prospect that he will become amenable to justice in the future: he may be apprehended, or he may recover. If proceedings have been instituted against an absconder or an invalid, the prosecutor may obtain a restraint order and any necessary inhibitions, warrants or interdicts relative to his realisable property which will have the effect of taking the proceeds of his crime out of circulation. In the event that he did not become amenable to justice during his life, the proceeds could be forfeited after his death.

^[888]

^[889]

We therefore propose a scheme which may be operated only where the offender has died. If experience suggests that it would be advantageous for the scheme to be extended to meet other circumstances, that could be done by amendment of the legislation. We note that provisions for circumstances other than the accused's death might be complex. For example, in making provision for a case where the offender had absconded before conviction it might be thought desirable to require that reasonable attempts had been made to arrest him, to prescribe that the recovery of the alleged proceeds should not be competent until a specified period had expired, and to provide for a variety of circumstances which might arise in the event of the absconder's return: for the variation of the order if he could show that it had been made on wrong information, for leaving the order out of account if he is sentenced, or for the discharge of the order and the payment of compensation in the event of the prosecution not being proceeded with or in the event of the absconder being tried and acquitted.

^[890]

The scheme in the Drug Trafficking Offences Act 1986, as amended, applies where the defendant absconds before or after conviction or where he dies after conviction: it does not apply where he dies between the institution of proceedings and conviction. It appears to us, however, that if a person has committed an offence and is prosecuted but dies possessed of the proceeds, his estate should be deprived of the proceeds if a court is satisfied to the criminal standard of proof that he committed the offence, whether that is established by his conviction before death or by a finding made upon a judicial assessment of the evidence after his death. If he has committed the offence, the occurrence of his death cannot alter the fact that the proceeds are the proceeds of crime. We therefore recommend:

120.

It should be competent for the Crown to recover by means of a court order the proceeds of an offence to which Part I of the draft Bill applies where proceedings have been instituted against a person for the offence and he dies before being sentenced or otherwise dealt with in these proceedings.

(Draft Bill, clause 37(1), (2), (8))

The court and the order

19.9

We propose that the recovery of the proceeds should be effected by an order of the Court of Session. Since the procedure is concerned with the transfer of property it should, we think, take place in a civil court; and since such cases are likely to be rare and may involve difficult questions of fact or law we consider that the appropriate court would be the Court of Session. The order would not be for confiscation, an expression which we think should be confined to criminal procedure, but for forfeiture. The forfeited property would be disposed of in the same way as property forfeited as a result of the making of a suspended forfeiture order: it would be dealt with by the Crown in such manner as seemed to the Crown to be appropriate.

^[891]

The parties

The application for the order would be made by the Lord Advocate. The application would be intimated to any person appearing to the Court to be likely to be affected by the making of the order. Any such person would be entitled to appear, lead evidence and make submissions.

Burden and standard of proof

19.11

Before the Court could make an order it would have to be satisfied that the person against whom the proceedings had been instituted had committed the offence of which he had been charged;

^[892]

^[893]

Where the accused has died after being convicted, we do not propose that proof of the conviction should be conclusive evidence that he committed the offence. It is possible to envisage a case in which a person with an interest to oppose an application, such as an heir or beneficiary of the accused, might reasonably consider that the accused had been wrongly convicted. Again, the accused might have died before the hearing of an appeal against his conviction which had had reasonably good prospects of success. In such cases injustice might result from the treatment of the conviction as conclusive evidence of guilt. It might be argued that the heirs would be deprived of their inheritance in violation of the European Convention on Human Rights.

Where the accused has died before conviction, however, we propose that the burden of proof would remain with the Crown: the Crown would be required to satisfy the Court beyond reasonable doubt that the accused had committed the offence. Here we follow section 13 of the New Zealand Proceeds of Crime Act 1991 and not the corresponding Australian provision which prescribes the less exacting requirement that the Court should be satisfied, having regard to all the evidence before it, that a reasonable jury, properly instructed, could lawfully find the person guilty of the offence.

^[899]

In all contested applications the fact that the accused himself could not give evidence would no doubt be a matter which the Court would take into account when assessing all the evidence led. On the other hand, in accordance with the ordinary rules of evidence any relevant statement which the accused had made before his death would be admissible as evidence of the facts stated in it unless the circumstances raised a presumption that it did not truly reflect what was in his mind, or unless it was a statement in a precognition or some other statement made with a view of constituting evidence.

^[900]

The second matter on which the Court would have to be satisfied beyond reasonable doubt is that the property either (a) had been obtained by the accused, directly or indirectly, in connection with the commission of the offence, or (b) was a gift caught by Part I of the draft Bill, that is, a gift made by the offender in contemplation of, or after, the commission of the offence. The formula in (a) is that which we have recommended in relation to the definition of "benefit".

^[901]

^[902]

^[903]

Where the Crown contends that the property is a caught gift, the application should be served on the alleged recipient. If the Crown proves that the property is a caught gift, it should not be forfeited if the recipient proves, on a balance of probabilities, the matters a recipient is entitled to prove when seeking an order that a gift should not be caught or that a restraint order should not be realised: that he received the gift in good faith, was not associated with the giver in the commission of the offence and would suffer hardship if he were to be deprived of the property.

^[904]

We recommend:

121. (1) The Court of Session should be entitled, on an application being made to it by the Lord Advocate, to grant an order for the forfeiture of the proceeds of the offence.

(2) The application should be intimated to any person appearing to the Court to be likely to be affected by the making of the order, and any such person should be entitled to appear before the Court, lead evidence and make representations, all in such manner as may be prescribed by Act of Sederunt.

(3) The Court's power to allow the amendment of pleadings should extend to any amendment of the application which does not change the character of the offence with which the accused had been charged in the proceedings.

(4) It should be for the Lord Advocate to satisfy the Court beyond reasonable doubt

(a) that the accused committed the offence concerned, and

(b) that the property to which the application relates either -

(i) was obtained directly or indirectly by the accused in connection with the commission of the offence, or

(ii) is a gift as defined in recommendations 15 and 16 above.

(5) The application should be a civil proceeding to which the Law Reform (Miscellaneous Provisions) (Scotland) Act 1968, section 10, and the Civil Evidence (Scotland) Act 1988 apply.

(6) Where the Court is satisfied as to (4)(a) and (b)(ii) above it should nevertheless have a discretion to refuse the application if the recipient of the gift satisfies the Court, on a balance of probabilities, that -

(a) he received the gift not knowing, not suspecting and not having reasonable grounds to suspect that the gift was made in contemplation of, or after, the commission of the offence; and

(b) that he was not associated with the giver in the commission of the offence; and

(c) that he would suffer hardship if the application were granted.

(7) Forfeited property should be dealt with by the Crown in such manner as seems to it to be appropriate.

(Draft Bill, clause 37(2), (3), (5), (9), (11))

Time-limits

19.18

As a safeguard against the oppressive use of the forfeiture procedure it is necessary to have some provision as to the period after the death within which the application must be made. We propose a rule similar to that which we have recommended for applications by the prosecutor for the making of a new order after the conclusion of the proceedings. Such applications must be made as soon as is reasonably practicable after the relevant information becomes available to the prosecutor but in any event within six years after the date of the offender's conviction.

^[905]

recommend

122. The application should be made as soon as is reasonably practicable after the relevant information becomes available to the Lord Advocate but in any event within six years of the date of death.

(Draft Bill, clause 37(4))

Preservation of property

Where a restraint order has been made in respect of the accused before his death, his death will not by itself affect the operation of the restraint order, since it remains in force until it is recalled. The prosecutor must apply to the Court of Session for the recall of the order, and the Court must grant the application, when proceedings for the offence are concluded; but the death of the accused is not one of the circumstances whereby the proceedings are concluded in terms of clause 22(5) of the draft Bill.

^[906]

^[907]

^[908]

Where, however, a restraint order is not in force when the accused dies, there should be a procedure whereby the property may be preserved pending the determination of an application for its forfeiture. We propose that the Court of Session should be empowered, on the application of the Lord Advocate, to make orders for inhibition in relation to heritable property in Scotland and to grant warrants for arrestment in relation to moveable property, in the same way as when the property is affected by a restraint order.

^[909]

recommend

123. Where a restraint order is not in force in respect of the accused at the date of his death the Court of Session should be entitled, on the application of the Lord Advocate, to make an order for inhibition relative to any heritable property in Scotland and to grant a warrant for the arrestment of any moveable property in regard to which an order for forfeiture is to be sought.

(Draft Bill, clause 37(10))

Protection of third parties' rights

As in ordinary proceedings for confiscation or forfeiture,

^[910]

^[911]

^[912]

recommend

124. (1) The owner of property which has been forfeited, other than the recipient of a gift, should be entitled to apply to the Court of Session for the return of the property or, if the property has been disposed of, for compensation.

(2) A person with an interest, otherwise than as owner, in property which has been forfeited should be entitled to apply to the Court for compensation.

(3) The Court should be required to grant the application if the applicant proves on a balance of probabilities that immediately before the forfeiture he was the owner of, or a person otherwise having an interest in, the property.

(4) The amount of compensation payable should be calculated as provided in recommendation 101 above.

(Draft Bill, clause 37(6)-(8))

Criminal Justice (Scotland) Act 1987, Part I

As we have mentioned above,

^[913]

recommend

125. Recommendations 120 to 124 above should apply to an offence to which section 1 of the Criminal Justice (Scotland) Act 1987 relates.

(Draft Bill, clause 39(3); Schedule 3, paragraph 31)

Part XX The legislation required

The draft Bill

The draft Bill, with explanatory notes, is set out in Appendix A. Its short title, "The Proceeds of Crime (Scotland) Bill", may not seem quite accurate for a Bill which deals not only with the confiscation of the proceeds of crime but also with the forfeiture of property used in crime. We have been unable, however, to find a way of indicating briefly and comprehensibly in the short title that the Bill deals with forfeiture. The title which we have chosen is, we think, justifiable because the greater part of the Bill is concerned with confiscation, and because in Australia and New Zealand each of the recent statutes dealing with both matters bears the short title "The Proceeds of Crime Act".

^[914]

The draft Bill is divided into five Parts. Parts I and II respectively make provision for confiscation and forfeiture, other than restraint orders and other measures for the interim preservation of property which are the subject of Part III. Part IV is concerned with reciprocal arrangements for the enforcement of orders. Part V contains miscellaneous and general provisions including clauses dealing with constraints on the disposal of the offender's family home when it is confiscated or forfeited, and the forfeiture of the proceeds of crime where the accused has died before a confiscation order can be made.

20.3

The draft Bill has five Schedules. Schedule 1 makes provision as to administrators of realisable or forfeitable property. Schedule 2 is concerned with the sequestration, bankruptcy, winding-up or receivership of persons or companies holding realisable or forfeitable property. Amendments to the Criminal Justice (Scotland) Act 1987 are set out in Schedule 3. Schedule 4 contains minor and consequential amendments to legislation other than the 1987 Act, and Schedule 5 gives a list of repeals.

20.4

The amendments to the 1987 Act are set out separately in Schedule 3 because of their number and significance. As we explained in Part II,

^[915]

^[916]

In order to indicate the effect of our proposed amendments to Part I of the 1987 Act we have provided a version of Part I in Appendix B to this report. This version fulfils two functions. First, it provides an up-to-date text of Part I, which has already been amended in some respects by several statutes. Such a text is not available elsewhere: the Statutes in Force give the text of the 1987 Act as at the date of Royal Assent, and Part I is not printed in The Parliament House Book. Secondly, the version shows how Part I, as it has been amended to date, would be further amended by Schedule 3 to the draft Bill. These further amendments are shown as follows. Words to be inserted or substituted are printed in bold type, while words to be repealed are printed in italic type. The sources of the proposed amendments are shown in marginal notes. We hope that Appendix B, which is an innovation in the reports of this Commission, will make it possible for readers to understand how Part I would appear if amended by the enactment of the draft Bill.

20.6

In the event of the implementation of this report, those responsible for preparing the necessary Bill may wish to consider including in the Bill a Keeling Schedule on the lines of Appendix B. A Keeling Schedule is a device which has occasionally been used where a Bill has made textual amendments in an enactment.

^[917]

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^[919]

The draft Bill, like Part I of the 1987 Act, is to be construed as one with the Criminal Procedure (Scotland) Act 1975 except where the context otherwise requires.

^[920]

^[921]

^[922]

Clause 40(2) of the draft Bill provides that the new Act is to come into force on such day as the Secretary of State may by order made by statutory instrument appoint. In framing the transitional provisions in clause 39(1) and (2) we have taken into account article 7.1 of the European Convention on Human Rights which provides in part:

"Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed."

We note that the European Commission of Human Rights recently declared admissible a complaint under article 7 relative to a confiscation order imposed under section 1 of the Drug Trafficking Offences Act 1986 (which came into force on 12 January 1987) in respect of offences committed between 1 January 1986 and 3 November 1986. In its subsequent report the Commission was divided as to whether there had been a violation of article 7: it expressed the opinion that there had not, but by seven votes to seven with the casting vote of the acting President.^[923] No doubt it is arguable that a confiscation order is not a penalty,^[924] but we think that such arguments are best avoided. We therefore consider that the new statutory powers to make confiscation orders, suspended forfeiture orders and other orders should not be exercisable where a person has been convicted of an offence committed before the coming into force of the relevant Part of the new Act. We also propose that where forfeiture would have been competent under section 223 or section 436 of the Criminal Procedure (Scotland) Act 1975 the court should continue to be entitled to exercise the power thereby conferred where the offence was committed before the coming into force of Part II, notwithstanding the repeal of those sections by Schedule 2 to the new Act. We therefore recommend:

126. (1) None of the powers conferred by the new Act should be exercisable in proceedings against a person for an offence committed before the Act comes into force.

(2) After the Act comes into force it should be competent for a court to exercise the powers conferred by section 223 or section 436 of the Criminal Procedure (Scotland) Act 1975, but not the powers conferred by Part II of the new Act, where a person is convicted of an offence committed before the coming into force of Part II of the new Act.

(Draft Bill, clause 39(1), (2))

Subordinate legislation

It may be considered appropriate that the forms and procedures in various applications under Parts I and II of the new Act to the High Court or to the sheriff in the exercise of his criminal jurisdiction

^[925]

^[926]

^[927]

Part XXI Summary of recommendations

A. CONFISCATION OF THE PROCEEDS OF CRIME

Confiscation: Introduction

(1) Subject to the following recommendations, where in a case other than one related to drug trafficking or terrorism a Scottish criminal court is satisfied that an offender has benefited from an offence of which he has been convicted, the court should have a discretionary power to make a confiscation order requiring him to pay such sum as the court thinks fit with the object of depriving him of that benefit.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be so amended as to make the scheme for the confiscation of the proceeds of drug trafficking conform, as far as appropriate, to the scheme described in the following recommendations.

(Paragraphs 2.11-2.13. Draft Bill, clauses 1(1), (2), (4), 39(3); Schedule 3)

When confiscation should be competent

The power to make a confiscation order should be exercisable where a person is prosecuted for any offence other than a specified offence related to drug trafficking or terrorism and -

(a) is convicted on indictment; or

(b) is convicted or found to have committed the offence on summary complaint and the offence is punishable by a fine in excess of level 5 on the standard scale or imprisonment for a period of more than three months or by both such fine and imprisonment.

(Paragraphs 3.2-3.4. Draft Bill, clause 1(1), (2))

(1) The power to make a confiscation order in terms of Part I of the Criminal Justice (Scotland) Act 1987 should be extended to the sheriff court in solemn procedure and in summary procedure where the offence concerned is punishable by a fine in excess of level 5 on the standard scale or by imprisonment for more than three months or by both such fine and imprisonment.

(2) The power to make a confiscation order should not be exercisable in the district court.

(Paragraphs 3.5, 3.6. Draft Bill, clause 39(3); Schedule 3, paragraph 2)

There should be no lower limit on the amount of a confiscation order.

(Paragraphs 3.7, 3.8)

The sum which a confiscation order requires an offender to pay should not exceed the lesser of -

(a) the amount of the benefit which he has derived from the offence or offences of which he has been convicted;

(b) the amount that might be realised, as defined in recommendation 12 below, at the time the order is made.

(Paragraphs 3.9-3.11. Draft Bill, clause 1(5))

"Benefit" and "the amount that might be realised"

(1) A person should be held to have benefited from the commission of an offence if in connection with its commission he has obtained, directly or indirectly, any property or other economic advantage.

(2) "Property" should be defined as "any property wherever situated, whether heritable or moveable, or whether corporeal or incorporeal".

(Paragraphs 4.2-4.7. Draft Bill, clause 2(1), (4))

The property which should be liable to be realised to satisfy a confiscation order should be -

(a) the whole estate, wherever situated, of -

(i) the offender;

(ii) any person to whom he has made a gift, directly or indirectly and whether in one transaction or a series of transactions;

(b) any other property in the possession or under the control of any of the persons mentioned in paragraph (a)(i) and (ii) above; and

(c) any income or estate vesting in any of those persons.

(Paragraph 4.11. Draft Bill, clause 3(1))

For the purposes of recommendation 7 above "the offender" means a person -

(a) against whom proceedings have been instituted as defined in recommendation 47(2) below or

(b) in respect of whom a restraint order has been made before the institution of proceedings in terms of recommendation 48(1) below.

(Paragraph 4.11. Draft Bill, clause 3(1)(a))

Property should not be realisable if -

(a) it is held on trust by a person mentioned in recommendation 7(a) above for a person not so mentioned; or

(b) a restraint order or a suspended forfeiture order made in terms of recommendations 61-69 below is in force in respect of the property.

(Paragraph 4.13. Draft Bill, clause 3(2))

10.

The provisions of section 5(2)(b) and (3)(b) of the Criminal Justice (Scotland) Act 1987 are unnecessary.

(Paragraphs 4.12, 4.13)

11.

Section 5(1), (2) and (3) of the Criminal Justice (Scotland) Act 1987 should be replaced by provisions analogous to those recommended in recommendations 7 to 9 above.

(Paragraph 4.11. Draft Bill, clause 39(3); Schedule 3, paragraph 6)

12.

The amount that might be realised when a confiscation order is made should be the total value -

(a) of the offender's realisable property as specified in recommendations 7 to 9 above, and

(b) subject to recommendations 15 to 19 below, of all gifts made by him.

(Paragraphs 4.8-4.13. Draft Bill, clause 3(3))

13.

(1) In assessing the value of realisable property (other than money) the court -

(a) should be required to have regard to the likely market value of the property at the date on which the confiscation order would be made; and

(b) should be entitled to have regard to any security or real burden which would require to be discharged in realising the property or to any other factors which might reduce the amount recoverable by such realisation.

(2) "Money" in paragraph (1) above should include cheques, banknotes, postal orders, money orders and foreign currency.

(3) In assessing the value of realisable property held by a person whose estate has been sequestrated, or who has been adjudged bankrupt in England and Wales or Northern Ireland, the court should be required to take into account the extent to which the property is or has been included in his estate for the purposes of the Bankruptcy (Scotland) Act 1985 or Part IX of the Insolvency Act 1986.

(4) Section 5 of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraph 4.14. Draft Bill, clauses 3(4), (5), (6), 39(3); Schedule 3, paragraph 6)

14.

(1) Where the court is not satisfied that the offender's interest in his family home has been acquired by means of the benefit derived from the offence concerned, any right or interest in the family home should be disposed of only in terms of provisions analogous to those of section 40 of the Bankruptcy (Scotland) Act 1985.

(2) Similar provisions should be inserted in Part I of the Criminal Justice (Scotland) Act 1987.

(3) The reference to an exception for the protection of a person or his family in section 23(6) of the 1987 Act should be repealed.

(Paragraphs 4.15-4.19. Draft Bill, clauses 36, 39(3), (9); Schedule 3, paragraph 10; Schedule 5)

15.

A gift made by the offender should be included among the property liable to be realised to satisfy a confiscation order if it has been made either in contemplation of, or after, the commission of the offence; or, where there is more than one offence, in contemplation of any of them or after the commission of the earlier or earliest of them.

(Paragraphs 4.20, 4.21. Draft Bill, clause 4(1))

16.

(1) Where the offender has transferred property to another person for significantly less than its market value, the difference between its market value and the value of the consideration received by the offender should be treated as a gift, and the value of the gift should be adjusted to take account of subsequent changes in the value of money.

(2) Section 6 of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraph 4.22. Draft Bill, clauses 4(3), 39(3); Schedule 3, paragraph 7)

17.

(1) Where a gift was in the form of money and the recipient proves on a balance of probabilities that the money or any of it has not been used to purchase goods or services or to earn interest or any other return, the value of the gift or such part of it as has not been so used should be taken to be the face value of the money or, as the case may be, the unused amount of the money.

(2) In a case other than any of those mentioned in recommendation 16 and in paragraph (1) above, the value of a gift should be taken to be the greater of the following:

(a) its value when received, adjusted to take account of subsequent changes in the value of money; or

(b) both of the following -

(i) the likely market value, on the date on which the confiscation order is to be made, of -

(A) the gift, if retained; or

(B) where the recipient of the gift retains only part of it, the retained part, and any property or part of any property which, directly or indirectly, represents the gift; or

(C) where the recipient of the gift retains no part of it, any property or part of any property which, directly or indirectly, represents the gift; and

(ii) the value of any property and other economic advantage which the recipient of the gift has obtained, directly or indirectly, by reason of the making of the gift, prior to the date on which the confiscation order is to be made, adjusted to take account of subsequent changes in the value of money.

(3) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 4.23-4.25. Draft Bill, clauses 4(2), (4), 39(3); Schedule 3, paragraph 7)

18.

The court should be entitled to disregard the amount (or part of the amount) of a gift caught by the legislation if it considers it improbable that the amount (or part) could be realised.

(Paragraphs 4.26, 4.27. Draft Bill, clause 4(5))

19.

(1) The recipient of a gift should be entitled to apply to the court, before or after a confiscation order is made and before his property is realised, for a declaration that the gift should not be caught.

(2) The court should have a discretion to grant the application if the recipient satisfies the court, on a balance of probabilities, that -

(a) he received the gift not knowing, not suspecting and not having reasonable grounds to suspect that the gift was made in contemplation of, or after, the commission of the offence; and

(b) that he was not associated with the giver in the commission of the offence; and

(c) that he would suffer hardship if the application were not granted.

(3) An appeal should lie to the High Court at the instance of -

(a) the recipient against the refusal;

(b) the prosecutor against the granting,

of the application.

(4) The appeal procedure should be as in an appeal against sentence.

(5) Provisions to the same effect as (1) to (4) above should be inserted in the Criminal Justice (Scotland) Act 1987.

(6) Section 6(4) and (5) of the 1987 Act should be repealed.

(Paragraphs 4.28-4.30. Draft Bill, clauses 4(6)-(8), 39(3), (9); Schedule 3, paragraph 6; Schedule 5)

20.

(1) In the assessment of the amount that might be realised no deduction should be made of any sums payable in pursuance of "obligations having priority".

(2) Section 5 of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 4.31-4.33. Draft Bill, clause 39(9); Schedule 5)

Confiscation and other disposals

21.

(1) A confiscation order should be imposed only in addition to another order or sentence.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraph 5.2. Draft Bill, clauses 1(3); 39(3); Schedule 3, paragraph 2)

22.

Any enactment restricting the power of a court dealing with an offender in a particular way from dealing with him also in any other way should not by reason only of the making of a confiscation order (or the postponement of a decision as regards making such an order) restrict the court from dealing with an offender in any way it considers appropriate in respect of an offence.

(Paragraphs 5.3, 5.4. Draft Bill, clause 5(3))

23.

(1) If the court decides that it ought to make a confiscation order it should determine the amount of the order before and without regard to the making of any decision as to -

(a) imposing a fine on the offender;

(b) making any order involving payment by him; or

(c) making a suspended forfeiture order in terms of recommendations 61-69 below or an order for forfeiture under a particular statute.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 5.5-5.7. Draft Bill, clauses 5(1), 39(3); Schedule 3, paragraph 2)

24.

(1) The court should be directed that where it makes a confiscation order, it should leave the order out of account in determining, in respect of the offence concerned or any other offence of which the offender has been convicted in the same proceedings, -

(a) whether or not to impose a custodial sentence and, if so, the length of the sentence; and

(b) any other sentence which does not involve depriving the offender of money or property.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 5.8-5.11. Draft Bill, clauses 5(2), 39(3), (9); Schedule 3, paragraph 2; Schedule 5)

25.

(1) The court should be directed that where it makes a confiscation order it should take account of the order before dealing with the offender, in respect of the offence concerned or any other offence of which he has been convicted in the same proceedings, by -

(a) fining him;

(b) making any order involving payment by him; or

(c) making a suspended forfeiture order as recommended below or an order for forfeiture under a particular statute.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 5.13-5.16. Draft Bill, clauses 5(2), 39(3); Schedule 3, paragraph 2)

26.

(1) Where the court makes both a confiscation order and a compensation order against the offender in the same proceedings in relation to the same offence and the offence involves the misappropriation of property, the court should be required to direct that the compensation is to be paid out of any sums applied towards the satisfaction of the confiscation order.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 5.17-5.24. Draft Bill, clauses 5(4), 39(3); Schedule 3, paragraph 2)

27.

For the purposes of any appeal or review, a confiscation order should be a sentence.

(Paragraph 5.25. Draft Bill, clause 1(8))

Procedure and evidence before order made

28.

(1) The court should be entitled to make a confiscation order only on the application of the prosecutor.

(2) The application should be made -

(a) in proceedings on indictment, when the prosecutor moves for sentence or, in a remit to the High Court for sentence, before sentence is pronounced;

(b) in summary proceedings, following the conviction of the accused.

(3) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 6.3, 6.4. Draft Bill, clauses 1(1), (6), 39(3); Schedule 3, paragraph 2)

29.

(1) It should be for the prosecutor to prove -

(a) that the offender has benefited from the commission of an offence, and

(b) the amount of his benefit.

(2) The standard of proof required of the prosecutor should be proof beyond reasonable doubt.

(Paragraph 6.5. Draft Bill, clause 1(7)(a), (b))

30.

(1) For the purpose of determining whether a person has benefited from the commission of an offence and, if he has, of assessing the amount of the benefit, the court should be entitled to make the following assumptions, except in so far as he proves either of them to be incorrect on a balance of probabilities:

(a) that any property or other economic advantage which he has obtained since the relevant date (as defined below) has been obtained in connection with the commission of the offence; and

(b) that any expenditure by him since the relevant date was met out of property or other economic advantage obtained in connection with the commission of the offence.

(2) "The relevant date" means -

(a) the date of the offence; or

(b) where the offence is found to have been committed over a period of time, the date occurring at the beginning of that period; or

(c) where the application has been made in respect of two or more offences, the date of the earlier or earliest offence.

(Paragraphs 6.6-6.10. Draft Bill, clause 2(2), (3))

31.

(1) It should be for the prosecutor to prove the amount that might be realised.

(2) Subject to recommendation 41(3) below, the standard of proof required of the prosecutor should be proof beyond reasonable doubt.

(Paragraphs 6.11-6.13. Draft Bill, clause 1(7)(c))

32.

(1) Where the prosecutor has moved for a confiscation order he should be entitled to lodge a statement as to any matters relevant -

(a) to determining whether the offender has benefited from the offence; or

(b) to an assessment of the amount of his benefit from the offence.

(2) Where the offender accepts to any extent any allegation in the statement, the court should be entitled, for the purposes of such determination or assessment, to treat his acceptance as conclusive of the matters to which it relates.

(3) The court should be empowered to require the offender to indicate to what extent he accepts each allegation in the statement and, in so far as he does not accept any such allegation, to indicate the basis of such non-acceptance.

(4) If the offender fails in any respect to comply with such a requirement, he should be liable to be taken as accepting every allegation in the statement apart from any allegation in respect of which he has complied with the requirement.

(Paragraphs 6.14-6.19. Draft Bill, clause 6(1)-(4))

33.

(1) The offender should be entitled to lodge a statement as to any matters relevant to determining the amount that might be realised at the time the confiscation order is made.

(2) Where the prosecutor accepts to any extent any allegation in the statement, the court should be entitled, for the purposes of the determination, to treat that acceptance as conclusive of the matters to which it relates.

(Paragraph 6.20. Draft Bill, clause 6(5))

34.

(1) Where any allegation in the prosecutor's statement is not accepted by the offender, or any allegation in the offender's statement is not accepted by the prosecutor, a hearing should be arranged before the trial judge, or if he is not available to preside at such a hearing within a reasonable time, before another judge, to resolve the matters in dispute.

(2) Where the trial has taken place in the High Court of Justiciary the other judge should be a judge of that Court, and where it has taken place in the sheriff court, he should be another sheriff of the sheriffdom concerned.

(Paragraphs 6.21, 6.22. Draft Bill, clause 6(6), (7))

35.

(1) Section 3(5) of the Criminal Justice (Scotland) Act 1987 should be repealed and replaced by a provision implementing recommendation 34 above.

(2) Rule 67A of the Act of Adjournal (Consolidation) 1988 and rule 201D of the Rules of the Court of Session should be revoked.

(Paragraph 6.21. Draft Bill, clause 39(3) (9); Schedule 3, paragraph 5; Schedule 5)

36.

(1) If the court considers that it requires further information before coming to any decision as regards making a confiscation order it should be able to postpone that decision for up to six months.

(2) If the court postpones that decision, it should also postpone passing any part of the sentence on the offender which might be affected by the making of a confiscation order, but it should be entitled to pass a sentence of imprisonment before making that decision.

(3) The offender's entitlement to appeal against conviction or sentence should not be affected by any postponement, but in the event of an appeal the court should be entitled, on the application of the prosecutor, to extend the period of postponement.

(4) The offender should be entitled to appeal against any confiscation order or other sentence passed after the period of postponement.

(5) Provisions implementing paragraphs (1) to (4) above should be substituted for section 2 of the Criminal Justice (Scotland) Act 1987.

(Paragraphs 6.24-6.27. Draft Bill, clauses 7, 39(3); Schedule 3, paragraph 3)

37.

Where the court makes a confiscation order, it should record its findings relevant to the amount the offender is ordered to pay, including findings as to the amount of the benefit, the elements of the benefit, the amount that might be realised and the nature and value of the realisable property.

(Paragraph 6.28)

Variation of confiscation orders

38.

(1) After a confiscation order has been made, the prosecutor should be entitled to apply to the court which made the order for a new order for payment of a different sum -

(a) where the maximum amount of the order was determined by the benefit, and it is now known

(i) that the benefit the offender had obtained in connection with the commission of the offence at the time the order was made was greater than the benefit taken into account in making the order; or

(ii) that the benefit taken into account in making the order has increased in value since the order was made; or

(iii) that some further benefit has been obtained in connection with the offence since the order was made; or

(b) where the maximum amount of the order was determined by the amount that might be realised, and it is now known that the amount that might be realised is greater than the amount taken into account in making the order in respect that -

(i) at the time when the order was made there was more realisable property than the court at that time took into account, or

(ii) the realisable property taken into account at the time when the order was made has subsequently increased in value, or

(iii) the amount, or part of the amount, of a gift which was disregarded on the ground that it was improbable that it could be realised, could be realised now.

(2) Any such application should be made as soon as is reasonably practicable after the relevant information becomes available to the prosecutor and in any event within six years of the date of the offender's conviction.

(Paragraphs 7.2-7.9. Draft Bill, clause 8(1), (2), (3))

39.

If the court is satisfied that the benefit or amount is greater than that which was taken into account in making the order, and -

(a) that order has been satisfied, the court should be entitled to make a new order for the payment of such sum as appears to the court to be appropriate having regard to what is now shown to be the benefit or the amount realisable;

(b) that order has not been satisfied, the court, if it decides to order payment of a further amount, should be required to recall the order and in making the new order should be entitled to take into account both the sum referred to in (a) above and the amount unpaid (including any interest payable) under the earlier order.

(Paragraph 7.10. Draft Bill, clause 8(4))

40.

(1) The rules of evidence and procedure in an application in terms of recommendation 38 should be similar to those in an application for the making of a confiscation order, except that the court should not be entitled to make the assumptions referred to in recommendation 30 above or in section 3(2) of the Criminal Justice (Scotland) Act 1987.

(2) Section 17 of the Criminal Justice (International Co-operation) Act 1990 should be replaced by provisions in Part I of the Criminal Justice (Scotland) Act 1987 implementing recommendations 38 to 40(1) above.

(Paragraph 7.11. Draft Bill, clauses 8(5), (6), 39(3), (9); Schedule 3, paragraph 8; Schedule 5)

41.

(1) After a confiscation order has been made, both the prosecutor and the offender should be entitled to apply to the court which made the order for a new order requiring a smaller amount to be paid by the offender on the ground that the value of the realisable property is inadequate for the payment of any amount outstanding (including any interest payable).

(2) When considering whether the value of the realisable property is inadequate, -

(a) the court should be required to take into account the extent to which property of a person whose estate has been sequestrated or who has been adjudged bankrupt is or has been included in his estate; and

(b) the court should be entitled to disregard any inadequacy which appears to it to be attributable, wholly or partly, to anything done by the offender for the purpose of protecting the realisable property from realisation.

(3) If the applicant satisfies the court on a balance of probabilities that the realisable property is inadequate, the court should be required to recall the order and make a new order for the payment of such lesser sum as appears to the court to be appropriate having regard to what is now shown to be the value of the realisable property and to any amount already paid under the earlier order.

(4) The rules of evidence and procedure should otherwise be similar to those which apply in an application at the instance of the prosecutor in terms of recommendations 38 to 40(1) above.

(5) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 7.12-7.16. Draft Bill, clauses 9, 39(3); Schedule 3, paragraph 22)

42.

(1) Where the court has imposed a sentence which does not include a confiscation order and the prosecutor learns thereafter that the offender has benefited in connection with the commission of the offence, the prosecutor should be entitled to apply to the court for a confiscation order.

(2) The application should be made as soon as is reasonably practicable after the relevant information becomes available to the prosecutor and in any event within six years of the date of the offender's conviction.

(3) The rules of evidence and procedure in the application should be similar to those in an application for a confiscation order made on a motion or remit for sentence, except that the court should not be entitled to make the assumptions referred to in recommendation 30 above or in section 3(2) of the Criminal Justice (Scotland) Act 1987.

(4) In determining the amount of the confiscation order the court should be required to take into account any order for payment or forfeiture which forms part of the sentence already imposed.

(5) Part I of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 7.17, 7.18. Draft Bill, clauses 10, 39(3); Schedule 3, paragraph 8)

Enforcement of confiscation orders

43.

(1) Section 7(2) of the Criminal Justice (Scotland) Act 1987 should be so amended that -

(a) section 398(1) of the Criminal Procedure (Scotland) Act 1975 applies whether the offender is in prison or not;

(b) the prosecutor is given an opportunity of being heard on the occasion mentioned in section 398(1); and

(c) the reference to the proviso to section 411(3) of the 1975 Act is deleted.

(2) Provisions identical to those of section 7 of the 1987 Act, as so amended, should apply to the enforcement of confiscation orders made in respect of the offences to which our recommendations relate.

(Paragraphs 8.1-8.9. Draft Bill, clauses 11, 39(3), (9); Schedule 3, paragraph 9; Schedule 5)

44.

Provision for the payment of interest on sums unpaid under confiscation orders should be made in terms similar to those of section 15 of the Criminal Justice (International Co-operation) Act 1990.

(Paragraph 8.10. Draft Bill, clause 12)

Preservation and realisation of property

45.

(1) The powers conferred on the civil courts and on administrators in terms of the following recommendations should be exercised -

(a) with a view to -

(i) satisfying a confiscation order;

(ii) realising no more than the value for the time being of a caught gift as assessed under the rules in recommendations 16(1) and 17(1) and (2) above;

(iii) allowing anyone other than the offender or the recipient of such a gift to retain or recover the value of any property held by him;

(b) without taking account of any obligations of the offender or recipient which conflict with the obligation to satisfy the confiscation order.

(2) In the exercise of these powers it should be competent to make an order or to take other action in respect of a debt owed by the Crown.

(3) Section 23 of the Criminal Justice (Scotland) Act 1987 should be amended accordingly.

(Paragraphs 9.1-9.5. Draft Bill, clauses 13, 39(3); Schedule 3, paragraph 20)

46.

(1) The Court of Session or a sheriff exercising his civil jurisdiction should be empowered to make a restraint order.

(2) A restraint order should interdict -

(a) a specified person from dealing with his realisable property, or

(b) that person and the named recipient of a caught gift from dealing with their own, or the other's, realisable property,

whenever that property was acquired and whether it is described in the order or not.

(3) "Dealing with" property should include -

(a) making a payment in reduction of the amount of a debt;

(b) removing the property from the jurisdiction of the court; and

(c) transferring or disposing of the property.

(4) The court in making a restraint order -

(a) should be entitled to specify conditions and exceptions and, in particular, to make such provision as it thinks fit for reasonable living expenses; and

(b) should be required to make provision for reasonable legal expenses payable in relation to the proceedings.

(Paragraphs 9.6-9.13. Draft Bill, clause 21(1)(a), (2), (4))

47.

(1) The court should be entitled to make a restraint order where -

(a) proceedings have been instituted in Scotland against a person for an offence of the kind specified in recommendation 2 above;

(b) the proceedings have not been concluded; and

(c) either -

(i) a confiscation order has been made, or

(ii) it appears to the court that there are reasonable grounds for thinking that a confiscation order may be made in the event of conviction.

(2) Proceedings for an offence should be taken to have been instituted against a person -

(a) on his arrest without warrant;

(b) when he is charged with the offence without being arrested;

(c) when a warrant to arrest him is granted;

(d) when a warrant to cite him is granted;

(e) in summary proceedings, on the first calling of the case; or

(f) when a petition is intimated to him or an indictment or a complaint is served on him,

and where more than one of these applies, at the time of the earlier or earliest of them.

(3) Proceedings should be taken to have been concluded on the occurrence of any of the events listed in section 47(5) of the Criminal Justice (Scotland) Act 1987, as extended to summary proceedings.

(Paragraphs 9.14-9.20. Draft Bill, clauses 22(1), (2), (7); 38(3))

48.

(1) The court should also be entitled to make a restraint order where -

(a) the court is satisfied that the prosecutor proposes within 28 days to institute proceedings against a person for an offence of the kind specified in recommendation 2 above; and

(b) it appears to the court that there are reasonable grounds for thinking that a confiscation order may be made in the event of conviction.

(2) Where the proposed proceedings have not been instituted within 28 days the prosecutor should be obliged to apply to the court immediately upon the expiry of the 28 days for the recall of the restraint order and the court should be required to grant the application.

(Paragraphs 9.21, 9.22. Draft Bill, clause 22(1), (3)(a), (4))

49.

(1) The court should be entitled to make a restraint order where the prosecutor has made an application in terms of either recommendation 38 or recommendation 42 above and it appears to the court that there are reasonable grounds for thinking that the application may be granted.

(2) The court should also be entitled to make a restraint order where -

(a) the court is satisfied that the prosecutor proposes within 28 days to make an application in terms of either recommendation 38 or recommendation 42 above; and

(b) it appears to the court that there are reasonable grounds for thinking that the application may be granted.

(3) Where the proposed application has not been made within 28 days the prosecutor should be obliged to apply to the court immediately upon the expiry of the 28 days for the recall of the restraint order and the court should be required to grant the application.

(4) Part I of the Criminal Justice (Scotland) Act 1987 should be so amended as to give effect to recommendations 46 to 49(3) above.

(Paragraph 9.23, 9.24. Draft Bill, clauses 22(1), (3)(b), (4), 39(3); Schedule 3, paragraphs 11, 32)

50.

(1) A restraint order -

(a) should be made only on an application by the prosecutor;

(b) should be made on an ex parte application which should be heard in chambers; and

(c) should be intimated to persons affected by the order.

(2) Where a restraint order is made in relation to heritable property in Scotland, the prosecutor should forthwith record a certified copy of the order in the General Register of Sasines or, as the case may be, register it in the Land Register of Scotland.

(Paragraph 9.25. Draft Bill, clause 21(1), (3), (5))

51.

(1) The court should be entitled to vary or recall a restraint order at any time on the application of the prosecutor or any person having an interest.

(2) Where a restraint order is in force after a confiscation order has been made, an administrator should not realise the property concerned in the period between the making of an application for the recall of the order and the court's decision on the application.

(3) The court should be entitled to grant an application for recall at the instance of the recipient of a gift if the recipient satisfies the court on a balance of probabilities that the three conditions referred to in recommendation 19(2) above are met.

(4) Where the court has recalled a restraint order at the instance of a person having an interest, it should be entitled to order that property of that person shall cease to be realisable.

(5) Where -

(a) proceedings for the offence, or

(b) proceedings in an application by the prosecutor in terms of recommendation 49(1) above

have been concluded, the prosecutor should be required to apply to the court forthwith for the recall of the restraint order and the court should be required to grant the application.

(6) Proceedings in an application in terms of recommendation 49(1) above should be taken to have been concluded where -

(a) the application is refused, or

(b) the confiscation order made when the application was granted is satisfied either by payment of the amount due or by the offender serving a period of imprisonment in default.

(7) Where the court has recalled a restraint order relating to heritable property in Scotland, the prosecutor should forthwith record a certified copy of the recalling order in the General Register of Sasines or, as the case may be, register it in the Land Register of Scotland.

(Paragraphs 9.26-9.28. Draft Bill, clauses 22(5), (6), (8), 24(1), (2), (3), (4))

52.

(1) It should be competent to reclaim or appeal to the Court of Session without leave against an interlocutor refusing or varying or recalling or refusing to vary or recall a restraint order, within such period as may be prescribed by Act of Sederunt.

(2) Part I of the Criminal Justice (Scotland) Act 1987 should be so amended as to give effect to recommendations 50 to 52(1) above.

(Paragraphs 9.29, 9.30. Draft Bill, clauses 24(5), 39(3); Schedule 3, paragraph 11)

53.

(1) A constable or a person commissioned by the Commissioners of Customs and Excise should be entitled to seize property subject to a restraint order for the purpose of preventing its removal from the jurisdiction of the court.

(2) The property should then be dealt with in accordance with the directions of the court.

(Paragraph 9.31. Draft Bill, clause 21(6), (7))

54.

(1) The court should be entitled to interdict a person not subject to a restraint order from dealing with property affected by the order.

(2) The procedural rules applicable to restraint orders should apply to such an interdict.

(3) Where the restraint order is recalled, the clerk of court should be obliged so to inform forthwith each of the persons interdicted.

(Paragraph 9.32. Draft Bill, clauses 24(6), 25(8)-(10))

55.

(1) The procedures for inhibition and arrestment relative to property affected by a restraint order or by an ancillary interdict should be regulated as described in paragraphs 9.34 to 9.36.

(2) The procedure for inhibition in section 11 of the Criminal Justice (Scotland) Act 1987 and paragraph 16 of Schedule 4 to the Prevention of Terrorism (Temporary Provisions) Act 1989 should be replaced by the procedure described in paragraph 9.34.

(Paragraphs 9.33-9.37. Draft Bill, clauses 25, 39(3), (4); Schedule 3, paragraph 12; Schedule 4, paragraph 12)

56.

(1) The provisions of Part I of the Criminal Justice (Scotland) Act 1987 relative to administrators should be amended to take account of the recommendations in this report.

(2) Corresponding provisions should be inserted in the draft Bill.

(Paragraphs 9.39-9.41. Draft Bill, clauses 26, 39(3); Schedule 1; Schedule 3, paragraphs 14-21)

57.

(1) Sections 33 to 36 of the Criminal Justice (Scotland) Act 1987 should be amended as proposed in paragraphs 9.43 and 9.44.

(2) Provisions corresponding to sections 33 to 37 of the 1987 Act, as so amended, should be inserted in the draft Bill.

(Paragraphs 9.42-9.46. Draft Bill, clauses 35(1), 39(3); Schedule 2; Schedule 3, paragraphs 27-30)

58.

The criminal conduct to which the offences created by sections 93A to 93D of the Criminal Justice Act 1988 refer should include any offence punishable on summary complaint by a fine in excess of level 5 of the standard scale or by imprisonment for more than three months or by both such fine and imprisonment.

(Paragraph 9.51. Draft Bill, clause 39(4); Schedule 4, paragraph 9)

Protection of third parties' rights in confiscation proceedings

59.

(1) Section 26 of the Criminal Justice (Scotland) Act 1987 should be so amended as to correspond with the terms of paragraph 10.7.

(2) Identical provisions should be inserted in the draft Bill.

(3) A person other than the accused or the recipient of a caught gift who is the owner of, or otherwise has an interest in, property which has been realised should be entitled to apply for compensation not later than three years after the conclusion of the proceedings to the Court of Session, where the confiscation order was made in the High Court of Justiciary, or to the sheriff exercising his civil jurisdiction, where the order was made in the sheriff court.

(4) The court should be required to grant the application if the applicant proves on a balance of probabilities that immediately before the realisation of the property he was the owner of, or a person otherwise having an interest in, the property.

(5) The amount of compensation payable to the owner of property which has been realised should be -

(a) where a consideration has been received, an amount equal to the amount of the consideration or its value at the time of the realisation, or

(b) where no consideration has been received, an amount equal to the value of the property as at the date of the realisation.

(6) The amount of compensation payable to a person who has an interest in property which has been realised should be an amount corresponding to the extent of his interest.

(7) The 1987 Act should be amended to make similar provision for the payment of compensation to a person other than the accused or the recipient of an implicative gift.

(Paragraphs 10.4-10.11. Draft Bill, clauses 14, 39(3); Schedule 1, paragraph 10; Schedule 3, paragraph 23)

B. FORFEITURE OF PROPERTY USED IN CRIME

When a suspended forfeiture order should be competent

60.

The power to make a suspended forfeiture order should not be exercisable in the district court.

(Paragraph 12.2. Draft Bill, clause 15(13))

61.

A suspended forfeiture order should be competent in respect of any property, wherever situated, whether heritable or moveable, or whether corporeal or incorporeal.

(Paragraphs 12.3, 12.4. Draft Bill, clauses 15(2), 38(1))

62.

The property in respect of which a suspended forfeiture order may be made should have been in the ownership or possession of the offender or under his control either at the time of the offence or at the time of his apprehension.

(Paragraphs 12.5-12.7. Draft Bill, clause 15(2))

63.

(1) The property in respect of which a suspended forfeiture order may be made should have been either -

(a) used for the purpose of committing, or facilitating the commission of, any offence; or

(b) intended to be used for that purpose.

(2) "Facilitating the commission of an offence" should be defined as including the taking of any steps, after an offence has been committed, for the purpose of disposing of any property to which it relates or of avoiding apprehension or detection.

(Paragraphs 12.8-12.11. Draft Bill, clause 15(2), (5))

64.

Where the use of property is necessary for the commission of an offence, the property should be regarded for the purpose of recommendation 63(1)(a) above as used for the purpose of committing the offence unless, in the case of a statutory offence, the statute creating the offence otherwise provides.

(Paragraphs 12.12, 12.13. Draft Bill, clause 15(6))

65.

It should continue to be competent to order forfeiture of a vehicle used in a road traffic offence which is punishable with imprisonment.

(Paragraph 12.14. Draft Bill, clause 39(4), (9); Schedule 4, paragraph 11; Schedule 5)

66.

The various forfeiture provisions in particular statutes should not be consolidated into a single provision.

(Paragraphs 12.15, 12.16)

67.

Where a person is convicted of a statutory offence, any property falling within the general provisions recommended in recommendations 62 and 63 above should be liable to forfeiture notwithstanding that it is not liable to forfeiture under the statute creating the offence, unless that statute

(a) expressly excludes the general provisions, or

(b) specifies the category of property which is to be liable to forfeiture under that statute, and the specified category does not include property used or intended to be used as mentioned in recommendation 63(1).

(Paragraphs 12.17-12.20. Draft Bill, clause 15(7), (8))

68.

(1) Where a summary complaint includes any statutory charge, the notice of penalty should give notice of liability to forfeiture under the general power recommended in recommendations 60 to 64 above where forfeiture thereunder is competent, as well as notice of any liability to forfeiture under the statute creating the offence.

(2) Form 46 of Schedule 1 to the Act of Adjournal (Consolidation) 1988 should be amended accordingly.

(Paragraphs 12.21, 12.22)

69.

A suspended forfeiture order should be competent where in respect of any offence -

(a) a person is convicted, whether in solemn or summary proceedings; or

(b) in the case of summary proceedings the court, without proceeding to conviction, makes in respect of a person either an order discharging him absolutely or a probation order.

(Paragraphs 12.23-12.26. Draft Bill, clause 15(1))

The making of a suspended forfeiture order

70.

(1) The court should be entitled to make a suspended forfeiture order only on the application of the prosecutor.

(2) The application should be made -

(a) in proceedings on indictment, when the prosecutor moves for sentence or, in a remit to the High Court for sentence, before sentence is pronounced;

(b) in summary proceedings, following the conviction of the accused.

(Paragraph 13.2. Draft Bill, clause 15(2), (3))

71.

In any hearing on the question whether any condition in recommendations 62 and 63 above is satisfied, the burden of proof should lie on the prosecutor, who should be required to establish his case beyond reasonable doubt.

(Paragraphs 13.3-13.5. Draft Bill, clause 15(2))

72.

Any necessary instructions to prosecutors or clerks of court relative to the lodging with the clerk of court of moveable property which has been made the subject of a suspended forfeiture order should be the subject of directions by Crown Office or Scottish Courts Administration.

(Paragraph 13.8)

73.

It is unnecessary to enact a statutory provision as to the presence in court of the moveable property to which a suspended forfeiture order relates.

(Paragraph 13.9)

74.

Where a court has made a suspended forfeiture order in respect of an article of moveable property, it should be entitled, on the application of the prosecutor, to grant a warrant for the search for and seizure of that article if satisfied that there is reasonable cause to believe that it is to be found in any place or premises specified in the application and that admission thereto has been refused or it is reasonably believed that such admission will be refused.

(Paragraph 13.9. Draft Bill, clause 16(2), (3))

75.

It is unnecessary to enact any statutory provision as to the identification or specification in a suspended forfeiture order of the property to which it relates.

(Paragraph 13.10)

76.

(1) If the prosecutor knows or reasonably suspects the identity of a person (other than the offender) as being the owner of, or otherwise having an interest in, the property to which the suspended forfeiture order relates, that person should be named in the order as a person having, or suspected of having, an interest in the property.

(2) Where a person is named in the order in pursuance of paragraph (1) above, the prosecutor should, as soon as may be after the order has been made, notify that person in writing that the order has been made and that he may apply to the court for recall of the order or, in the event of forfeiture, for the return of the property or compensation.

(Paragraph 13.11. Draft Bill, clause 15(4), (10)(a))

77.

The prosecutor should, as soon as may be after a suspended forfeiture order has been made, insert in the Edinburgh Gazette or some other appropriate publication a notice specifying the terms of the order, if directed to do so by the court.

(Paragraph 13.11. Draft Bill, clause 15(10)(c))

78.

Where a suspended forfeiture order relates to heritable property in Scotland, the prosecutor should, as soon as may be after the order has been made, record a certified copy of the order in the General Register of Sasines or register it in the Land Register of Scotland.

(Paragraph 13.12. Draft Bill, clause 15(10)(b))

79.

The court should be entitled to make both a suspended forfeiture order and a compensation order against the same person in the same proceedings, and to order that, in the event of the forfeiture of the property on the expiry of the period mentioned in recommendation 83 below, the property should be sold and the proceeds of sale first directed towards satisfaction of the compensation order.

(Paragraphs 13.13-13.16. Draft Bill, clause 15(9))

80.

For the purposes of any appeal or review a suspended forfeiture order should be a sentence.

(Paragraph 13.17. Draft Bill, clause 15(12))

81.

Where a person appeals against a sentence which consists of or includes a suspended forfeiture order, other than an order relating to moveable property certified in terms of recommendation 84 below, the forfeiture of the property to which the order relates should be suspended until the appeal, if it is proceeded with, is determined in favour of the Crown or until the expiry of the period of delay mentioned in recommendation 83 below, whichever is the later.

(Paragraph 13.17. Draft Bill, clause 17(4))

82.

Where a suspended forfeiture order relating to heritable property in Scotland is recalled on appeal the prosecutor should, as soon as may be after the appeal has been disposed of, record a certified copy of the Court's interlocutor in the General Register of Sasines or register it in the Land Register of Scotland.

(Paragraph 13.17. Draft Bill, clause 20(3))

The effect of a suspended forfeiture order

83.

(1) Heritable property in Scotland should be forfeited to and vest in the Crown six months after the date on which a certified copy of the suspended forfeiture order is recorded or registered as mentioned in recommendation 78.

(2) Heritable property situated outside Scotland should be forfeited to and vest in the Crown six months after the date of the making of the suspended forfeiture order.

(3) Moveable property (other than that which has been forfeited immediately in terms of recommendation 84 below) should be forfeited to and vest in the Crown 60 days after the date of the making of the suspended forfeiture order.

(4) Where an application for the recall or variation of the suspended forfeiture order has been made, the property should be forfeited only if and when the application is finally disposed of in favour of the Crown, or on the expiry of the period mentioned in paragraph (1) or (2) above, whichever is the later.

(5) A certificate by the clerk of court should be conclusive evidence of the fact that the property was forfeited on the date specified in the certificate.

(6) Where the property is heritable property in Scotland, the prosecutor should be obliged to record or register a certified copy of the certificate forthwith in the Register in which the suspended forfeiture order was recorded or registered.

(Paragraphs 14.2-14.5. Draft Bill, clause 17(1), (3), (6))

84.

(1) Moveable property which is of a perishable or dangerous nature or cannot lawfully be sold, supplied or possessed or is of no commercial value should be forfeited immediately after the making of the suspended forfeiture order.

(2) Moveable property should be regarded as falling within any of the categories mentioned in paragraph (1) above if certified as such by the prosecutor in a certificate produced to the clerk of court.

(Paragraphs 14.7, 14.8. Draft Bill, clause 17(2))

85.

Property which is the subject of a suspended forfeiture order should be placed in the possession or under the control of the clerk of court until the order is recalled or the property is disposed of after forfeiture.

(Paragraph 14.9 Draft Bill, clause 15(11))

86.

Property in respect of which a suspended forfeiture order is in force should in due course be forfeited to and vest in the Crown and thereafter dealt with by the Crown in such manner as seems to it to be appropriate.

(Paragraph 14.10. Draft Bill, clause 17(1), (5))

Variation and recall of suspended forfeiture orders

87.

(1) If, after a suspended forfeiture order has been made, the prosecutor comes to believe that it does not correctly identify any person having an interest in the property, he should be entitled to apply to the court for the variation of the order.

(2) The application should be made to the court which made the order, at any time before the property is forfeited.

(3) The court should be required to grant any such application.

(4) Where the order is varied by the insertion of the name of a person believed to have an interest in the property, the prosecutor should notify the person as mentioned in recommendation 76 above.

(5) Where the order to be varied relates to heritable property in Scotland, -

(a) the prosecutor should, as soon as may be after the order for variation has been made, record or register a certified copy of the order for variation in the Register in which the certified copy of the order to be varied was recorded or registered; and

(b) the property should be forfeited six months after the date of recording or registration of that certified copy of the order for variation.

(6) Where the order is varied and relates to moveable property, the property should be forfeited 60 days after the date of the order for variation.

(7) In any case in which an order for variation is made, the court should be entitled to direct the prosecutor to insert a notice specifying its terms in the Edinburgh Gazette or some other appropriate publication.

(Paragraph 15.2. Draft Bill, clause 18(5), (6), (7), (8), (10))

88.

A person other than the offender who is the owner of, or otherwise has an interest in, any property in respect of which a suspended forfeiture order has been made should be entitled to apply to the court which made the order, at any time before the property is forfeited, for the recall of the order in so far as it relates to the property or his interest in it.

(Paragraphs 15.3, 15.4. Draft Bill, clause 18(1), (8), (10))

89.

The court should be required to grant the application if -

(1) the applicant proves on a balance of probabilities that he is the owner of, or otherwise has an interest in, the property; and either

(2) the prosecutor fails to prove beyond reasonable doubt that the applicant -

(a) where he was the owner of, or otherwise had an interest in, the property before the commission of an offence,

(i) knew or ought to have known that the property was intended to be used for the purpose of committing, or facilitating the commission of an offence, and

(ii) did not take all the steps which were reasonable for him to take to prevent such intended use; or

(b) where he became the owner of, or otherwise acquired an interest in, the property after the commission of an offence, that he knew or ought to have known that the property had been intended to be, or had been, so used; or

(Paragraphs 15.5-15.10. Draft Bill, clause 18(1), (2), (3))

90.

The court to which an application for the recall of a suspended forfeiture order is made should not be entitled to review any other element in the sentence imposed, or any probation order or order for absolute discharge made, in respect of the offence to which the order relates.

(Paragraph 15.11. Draft Bill, clause 18(9))

91.

Where the order is recalled and relates to heritable property in Scotland, the prosecutor should, as soon as may be after the order has been recalled, record or register a certified copy of the order for recall in the Register in which the certified copy of the order recalled was recorded or registered.

(Paragraph 15.12. Draft Bill, clause 18(4))

92.

(1) Both the applicant and the prosecutor should be entitled to appeal against a decision on an application for the recall of a suspended forfeiture order.

(2) The appeal procedure should be as in an appeal against sentence.

(3) Where a suspended forfeiture order relating to heritable property in Scotland is recalled on appeal, the prosecutor should proceed as in recommendation 82 above.

(Paragraph 15.13. Draft Bill, clause 20)

Search warrants and restraint orders in forfeiture proceedings

93.

Where -

(a) the sheriff is satisfied, on an application being made to him by the prosecutor,

(i) that proceedings are likely to be instituted or have been instituted against a person in Scotland for an offence, and

(ii) that there is reasonable cause to believe that property specified in the application is to be found in a place or in premises specified in the application, and

(b) it appears to him that there are reasonable grounds for thinking that in the event of the person being convicted of the offence a suspended forfeiture order might be made in relation to the property,

he should be entitled to grant a warrant authorising a person named therein to enter and search the place or premises and seize the property.

(Paragraphs 16.4-16.8. Draft Bill, clause 16(1))

94.

(1) The Court of Session or a sheriff exercising his civil jurisdiction should be empowered to make a restraint order in relation to property which is liable to be forfeited.

(2) A restraint order should interdict a specified person from dealing with property specified in the order.

(3) The court should be entitled to make a restraint order

(a) where proceedings against a person for an offence have been instituted, but not concluded, in Scotland and either -

(i) a suspended forfeiture order is in force, or

(ii) it appears to the court that there are reasonable grounds for thinking that such an order might be made in the event of conviction; or

(b) where it is proposed to institute such proceedings within 28 days and paragraph (ii) above applies.

(Paragraphs 16.9, 16.10. Draft Bill, clauses 21(1)(b), 23(1), (2))

95.

(1) The rules as to applications for restraint orders, their variation and recall, and appeals should be as for restraint orders in relation to realisable property.

(2) The court's powers as to ancillary interdicts, inhibitions and arrestments should be the same as its powers as regards restraint orders in relation to realisable property.

(Paragraph 16.11. Draft Bill, clauses 21(3)-(5), 23(3)-(6), 24(1), (3)-(6), 25)

96.

The provisions mentioned in recommendation 56(2) above as to administrators of realisable property should be extended, subject to necessary modifications, to a case in which a restraint order or a suspended forfeiture order is made relative to forfeitable property.

(Paragraph 16.11. Draft Bill, clause 26; Schedule 1)

97.

(2) The property should then be dealt with in accordance with the directions of the court.

(Paragraph 16.11. Draft Bill, clause 21(6), (7))

98.

The provisions mentioned in recommendation 57(2) above as to the sequestration, etc, of persons holding realisable property should be extended, subject to any necessary modifications, to persons holding forfeitable property.

(Paragraph 16.11. Draft Bill, clause 35; Schedule 2)

Protection of third parties' rights in forfeiture proceedings

99.

(1) The owner of property which has been forfeited, whether under the new legislation or any other enactment, should be entitled to apply to the court which made the suspended forfeiture order for the return of the property or, if that is not reasonably practicable, for compensation.

(2) A person with an interest, otherwise than as owner, in property which has been so forfeited should be entitled to apply for compensation to the court which made the suspended forfeiture order.

(3) The application should be made not later than three years after the date on which the property was forfeited.

(Paragraph 17.5. Draft Bill, clause 19(1), (2), (6), (10))

100.

The court should be required to grant the application if -

(1) the applicant proves on a balance of probabilities that immediately before the forfeiture of the property he was the owner of, or a person otherwise having an interest in, the property; and either

(2) the prosecutor fails to prove beyond reasonable doubt that the applicant -

(a) where he was the owner of the property before the commission of an offence,

(i) knew or ought to have known that the property was intended to be used for the purpose of committing, or facilitating the commission of an offence, and

(ii) did not take all the steps which were reasonable for him to take to prevent such intended use; or

(b) where he became the owner of the property after the commission of an offence, that he knew or ought to have known that the property had been intended to be, or had been, so used; or

(3) the prosecutor proves beyond reasonable doubt either of the matters mentioned in paragraph (2) above but the court nevertheless considers that in all the circumstances of the case forfeiture would be or has been an excessive or inappropriate penalty upon the applicant.

(Paragraph 17.6. Draft Bill, clause 19(1), (3), (4))

101.

(1) The amount of compensation payable to the owner of property which has been disposed of should be -

(a) where a consideration has been received, an amount equal to the amount of the consideration or its value at the time of the disposal, or

(b) where no consideration has been received, an amount equal to the value of the property as at the date of the disposal.

(2) The amount of compensation payable to a person who has an interest in property which has been forfeited should be an amount corresponding to the extent of his interest.

(Paragraph 17.7. Draft Bill, clause 19(1), (2), (5))

102.

The court which considers an application for the return of forfeited property or for compensation should not be entitled to review any other element in the sentence imposed, or any probation order or order for absolute discharge made, in respect of the offence to which the suspended forfeiture order related.

(Paragraph 17.8. Draft Bill, clause 19(9))

103.

If, after property has been forfeited under the new legislation, the prosecutor comes to believe that the preceding suspended forfeiture order did not correctly identify any person having an interest in the property, the prosecutor should forthwith -

(a) advise the court of the error, whether or not he knows the identity of any person truly having an interest in the property; and

(b) where he knows or reasonably suspects the identity of any such person, notify that person in writing that he may be entitled to apply for the return of the property or for compensation.

(Paragraph 17.9. Draft Bill, clause 19(7), (8))

104.

(1) Both the applicant and the prosecutor should be entitled to appeal against a decision on an application for the recovery of forfeited property or for compensation.

(2) The appeal procedure should be as in an appeal against sentence.

(Paragraph 17.10. Draft Bill, clause 20)

105.

Where a person's family home has been forfeited under the new legislation, any right or interest in it should be disposed of only in terms of the provisions referred to in recommendation 14.

(Paragraph 17.11. Draft Bill, clause 36(1)(b))

C. INTERNATIONAL CO-OPERATION

Reciprocal arrangements for the enforcement of orders

Confiscation

106.

Provision should be made for the recognition and enforcement in England and Wales of orders and functions relative to Scottish confiscation proceedings in terms similar to section 24A of the Drug Trafficking Offences Act 1986.

(Paragraph 18.3. Draft Bill, clause 33)

107.

Section 11(6) of the Criminal Justice (Scotland) Act 1987 should be repealed and restated in a new section of that Act.

(Paragraph 18.4. Draft Bill, clause 39(3), (9); Schedule 3, paragraph 24; Schedule 5)

108.

Sections 90 to 93 of the Criminal Justice Act 1988 should be repealed and restated, with modifications, in the draft Bill.

(Paragraph 18.4. Draft Bill, clauses 27, 28, 29, 39(9); Schedule 5)

109.

Section 95 of the Criminal Justice Act 1988 should be repealed and restated in the draft Bill.

(Paragraph 18.5. Draft Bill, clauses 30, 39(9); Schedule 5)

110.

Provision should be made by statutory instrument for the enforcement in Northern Ireland of orders made in confiscation proceedings in Scotland under the new legislation.

(Paragraph 18.6).

111.

Section 30(1)(b)(i) and (c) of the 1987 Act should be repealed.

(Paragraph 18.9. Draft Bill, clause 39(9); Schedule 5)

112.

In section 30(2) of the 1987 Act the definition of "external confiscation order" should be extended to include orders made for the purpose of recovering specific items of property representing proceeds.

(Paragraph 18.8. Draft Bill, clause 39(3); Schedule 3, paragraph 25)

113.

Provision should be made for the registration and enforcement of confiscation and ancillary orders made outside the United Kingdom relative to offences similar to the offences to which Part I of the draft Bill applies, in terms similar to sections 30 (amended as recommended above) and 30A of the Criminal Justice (Scotland) Act 1987.

(Paragraph 18.8. Draft Bill, clauses 31, 32)

114.

Section 32(2) of the Criminal Justice (Scotland) Act 1987 should be amended as indicated in paragraph 18.12.

(Paragraph 18.12. Draft Bill, clause 39(3); Schedule 3, paragraph 26)

115.

Provision should be made for the enforcement outside the United Kingdom of confiscation and ancillary orders made in Scotland in terms similar to section 32 of the 1987 Act, as so amended.

(Paragraph 18.12. Draft Bill, clause 34)

Forfeiture

116.

The provisions referred to in recommendation 106 above should be extended to include Scottish restraint orders relative to forfeitable property and suspended forfeiture orders made under the new Act and forfeiture orders made under any enactment other than the Prevention of Terrorism (Temporary Provisions) Act 1989.

(Paragraph 18.14. Draft Bill, clause 33(1)(c), (2)-(6))

117.

Provision should be made by statutory instrument for the enforcement in Northern Ireland of Scottish restraint orders relative to forfeitable property and suspended forfeiture orders made under the new Act and forfeiture orders made under any enactment other than the Prevention of Terrorism (Temporary Provisions) Act 1989.

(Paragraph 18.16)

118.

The application of section 9 of the Criminal Justice (International Co-operation) Act 1990 should be extended to any offence which corresponds to or is similar to an offence to which Part I or Part II of the draft Bill applies.

(Paragraphs 18.17, 18.18. Draft Bill, clause 39(4); Schedule 4, paragraph 13)

119.

Provision should be made, in terms similar to section 32 of the Criminal Justice (Scotland) Act 1987, amended as proposed in paragraph 18.12, for the enforcement outside the United Kingdom of restraint orders and suspended forfeiture orders made under the new Act and forfeiture orders made under any other enactment.

(Paragraph 18.19. Draft Bill, clause 34)

D. MISCELLANEOUS MATTERS

Forfeiture of property where the accused has died

120.

It should be competent for the Crown to recover by means of a court order the proceeds of an offence to which Part I of the draft Bill applies where proceedings have been instituted against a person for the offence and he dies before being sentenced or otherwise dealt with in these proceedings.

(Paragraphs 19.1-19.8. Draft Bill, clause 37(1), (2), (8))

121.

(1) The Court of Session should be entitled, on an application being made to it by the Lord Advocate, to grant an order for the forfeiture of the proceeds of the offence.

(2) The application should be intimated to any person appearing to the Court to be likely to be affected by the making of the order, and any such person should be entitled to appear before the Court, lead evidence and make representations, all in such manner as may be prescribed by Act of Sederunt.

(3) The Court's power to allow the amendment of pleadings should extend to any amendment of the application which does not change the character of the offence with which the accused had been charged in the proceedings.

(4) It should be for the Lord Advocate to satisfy the Court beyond reasonable doubt

(a) that the accused committed the offence concerned, and

(b) that the property to which the application relates either -

(i) was obtained directly or indirectly by the accused in connection with the commission of the offence, or

(ii) is a gift as defined in recommendations 15 and 16 above.

(5) The application should be a civil proceeding to which the Law Reform (Miscellaneous Provisions) (Scotland) Act 1968, section 10, and the Civil Evidence (Scotland) Act 1988 apply.

(6) Where the Court is satisfied as to (4)(a) and (b)(ii) above it should nevertheless have a discretion to refuse the application if the recipient of the gift satisfies the Court, on a balance of probabilities, that -

(a) he received the gift not knowing, not suspecting and not having reasonable grounds to suspect that the gift was made in contemplation of, or after, the commission of the offence; and

(b) that he was not associated with the giver in the commission of the offence; and

(c) that he would suffer hardship if the application were granted.

(7) Forfeited property should be dealt with by the Crown in such manner as seems to it to be appropriate.

(Paragraphs 19.9-19.17. Draft Bill, clause 37(2), (3), (5), (9), (11))

122.

The application should be made as soon as is reasonably practicable after the relevant information becomes available to the Lord Advocate but in any event within six years of the date of death.

(Paragraph 19.18. Draft Bill, clause 37(4))

123.

Where a restraint order is not in force in respect of the accused at the date of his death the Court of Session should be entitled, on the application of the Lord Advocate, to make an order for inhibition relative to any heritable property in Scotland and to grant a warrant for the arrestment of any moveable property in regard to which an order for forfeiture is to be sought.

(Paragraphs 19.19, 19.20. Draft Bill, clause 37(10))

124.

(1) The owner of property which has been forfeited, other than the recipient of a gift, should be entitled to apply to the Court of Session for the return of the property or, if the property has been disposed of, for compensation.

(2) A person with an interest, otherwise than as owner, in property which has been forfeited should be entitled to apply to the Court for compensation.

(3) The Court should be required to grant the application if the applicant proves on a balance of probabilities that immediately before the forfeiture he was the owner of, or a person otherwise having an interest in, the property.

(4) The amount of compensation payable should be calculated as provided in recommendation 101 above.

(Paragraph 19.21. Draft Bill, clause 37(6)-(8))

125.

Recommendations 120 to 124 above should apply to an offence to which section 1 of the Criminal Justice (Scotland) Act 1987 relates.

(Paragraph 19.22. Draft Bill, clause 39(3); Schedule 3, paragraph 31)

The legislation required

126.

(1) None of the powers conferred by the new Act should be exercisable in proceedings against a person for an offence committed before the Act comes into force.

(2) After the Act comes into force it should be competent for a court to exercise the powers conferred by section 223 or section 436 of the Criminal Procedure (Scotland) Act 1975, but not the powers conferred by Part II of the new Act, where a person is convicted of an offence committed before the coming into force of Part II of the new Act.

(Paragraph 20.8. Draft Bill, clause 39(1), (2))

Note 1    DP No 82 (hereafter referred to as "the discussion paper" in the text and "DP" in the footnotes).    [Back]

Note 2    See paras 2.8-2.10 below.    [Back]

Note 3    See Parts IX, XVI below.    [Back]

Note 4    See Parts X, XVII below.    [Back]

Note 5    See Part XVIII below.    [Back]

Note 6    See para 2.9 below.    [Back]

Note 7    DP, paras 5.1-5.6.    [Back]

Note 8    See para 2.3 below.    [Back]

Note 9    See Parts IX, XVI below.    [Back]

Note 10   See Parts X, XVII below.    [Back]

Note 11   See paras 20.5, 20.6 below.    [Back]

Note 12   For the terms of our reference see para 1.1 above, and for an explanation of the terminology used in this report see para 1.2 above.    [Back]

Note 13   In civil law the relevant maxim appears to be Nemo ex suo delicto meliorem suam conditionem facere potest (No one can improve his condition by his delict): J Trayner, Latin Maxims and Phrases (4th ed, 1894) p 378.    [Back]

Note 14   See DP, para 4.3.    [Back]

Note 15   Some of these are noted in DP, paras 4.1-4.6. See also para 2.7 below.    [Back]

Note 16   Our reference also mentions "proposed measures". Various reforms have been enacted very recently in the Criminal Justice Act 1993, to which we refer below. "Proposed measures" for further reforms in the United Kingdom are recommended in the Reports of the Home Office Working Group on Confiscation: on the Drug Trafficking Offences Act 1986 (1991) and on Part VI of the Criminal Justice Act 1988 (1992). We refer later to such of these recommendations as appear to us to be relevant.    [Back]

Note 17   Criminal Justice (Scotland) Act 1980, c 62, s 58(1).    [Back]

Note 18   "The phrase 'money laundering' covers all procedures that aim to change the true identity of illegally obtained money so that it appears to have originated from a legitimate source." (K D Magliveras, "The regulation of money laundering in the United Kingdom" 1991 Journal of Business Law 525).    [Back]

Note 19   A Freiberg, "Criminal confiscation, profit and liberty" (1992) 25 Australian and New Zealand Journal of Criminology 44 at pp 45-46, cit W C Gilmore, "Money laundering: the international aspect" in Money Laundering ed H L MacQueen (1993) 1 at p 3. The last point is more appropriate to measures for forfeiture.    [Back]

Note 20   1986, c 32, as amended: hereafter referred to as "the 1986 Act" or "DTOA".    [Back]

Note 21   1987, c 41, as amended: hereafter referred to as "the 1987 Act" or "CJ(S)A".    [Back]

Note 22   1988, c 33, as amended: hereafter referred to as "the 1988 Act" or "CJA".    [Back]

Note 23   1993, c 36: hereafter referred to as "the 1993 Act". See P Vallance, "UK and US national perspectives: money laundering and asset forfeiture - an update" (1993) 19 Commonwealth Law Bulletin 1852; D A Thomas, "The Criminal Justice Act 1993: (1) Confiscation orders and drug trafficking" [1994] Crim L R 93.    [Back]

Note 24   1990, c 5, hereafter referred to as "the 1990 Act".    [Back]

Note 25   Ibid, s 26.    [Back]

Note 26   1989, c 4: hereafter referred to as "the 1989 Act" or "PT(TP)A".    [Back]

Note 27   Ibid, s 13.    [Back]

Note 28   1991, c 24: hereafter referred to as "the 1991 Act" or "NI(EP)A".    [Back]

Note 29   The Profits of Crime and their Recovery (1984), the Report of a Committee set up by the Howard League for Penal Reform after R v Cuthbertson [1981] AC 470 and chaired by Sir Derek Hodgson (hereafter referred to as "Hodgson").    [Back]

Note 30   Fifth Report 1984-85, "Misuse of Hard Drugs - Interim Report" (HC 399). See also First Report 1985-86 "Misuse of Hard Drugs" (HC 66).    [Back]

Note 31   DTOA, s 1; CJ(S)A, s 1.    [Back]

Note 32   DTOA, s 8; CJ(S)A, s 9.    [Back]

Note 33   DTOA, s 2(2), (3); CJ(S)A, s 3(2). On the coming into effect of the amendment of DTOA, s 2(2) by the Criminal Justice Act 1993, s 9(2)(a) the courts in England and Wales will be obliged to make these assumptions.    [Back]

Note 34   DTOA, ss 8, 13; CJ(S)A, ss 13-22.    [Back]

Note 35   DTOA, s 24; CJ(S)A, s 43.    [Back]

Note 36   DTOA, s 31; CJ(S)A, s 42.    [Back]

Note 37   1993 Act, ss 16-19.    [Back]

Note 38   CJA, s 71.    [Back]

Note 39   Ibid, s 77.    [Back]

Note 40   Ibid, ss 77(8), 80(2).    [Back]

Note 41   Ibid, s 71(2)(a).    [Back]

Note 42   Ibid, s 71(3)(a). The offences are listed in Sched 4, Pt I as substituted by the Criminal Justice Act 1988 (Confiscation Orders) Order 1990 (SI 1990/1570), art 3.    [Back]

Note 43   Ibid, s 71(7).    [Back]

Note 44   The DTOA and Part I of the CJ(S)A were considered in the Seventh Report of the Home Affairs Committee 1988-89, "Drug Trafficking and Related Serious Crime" (HC 370). The Home Office Working Group on Confiscation has published reports on the DTOA (1991) and Part VI of the CJA (1992). Recommendations in these reports are implemented by provisions in Parts II and III of the Criminal Justice Act 1993, some of which are not yet in force at the time of writing (1 May 1994).    [Back]

Note 45   On 14 April 1993 it was said to have "risen to about £50 million" (Mr Michael Jack, Minister of State, Home Office, Hansard, HC Deb vol 222, col 922).    [Back]

Note 46   Cf P Vallance, "UK and US national perspectives: money laundering and asset forfeiture - an update" (1993) 19 Commonwealth Law Bulletin 1852 at pp 1857-1858: "The most recent figures show that only about a quarter of all the money ordered to be confiscated to date has been realised. Of the remaining three quarters, some will be accessible to realisation, but a proportion will have to be written off because, for example, an offender has served a term of imprisonment in default." D A Thomas, "The Criminal Justice Act 1993: (1) Confiscation orders and drug trafficking" [1994] Crim L R 93 at p 93: "As a means of stripping drug traffickers of their profits, the Act [sc DTOA] has had limited success".    [Back]

Note 47   When the amendment of s 1 by s 7(1) of the Criminal Justice Act 1993 comes into force, an order will be made only on the motion of the prosecutor or if the court decides to do so.    [Back]

Note 48   For recent surveys of confiscation procedures overseas see D McClean, International Judicial Assistance (1992), chap 9 (UK and Commonwealth); Report on the Confiscation of the Proceeds of Crime (LRC 35, Law Reform Commission, Dublin, 1991), pp 34-39 (various European jurisdictions).    [Back]

Note 49   D B Smith, Prosecution and Defense of Forfeiture Cases (1988), p 1, cit M Zander, Confiscation and Forfeiture Law: English and American Comparisons (1989), p 25.    [Back]

Note 50   eg D J Fried, "Rationalizing criminal forfeiture" (1988) 79 J Crim Law and Criminology 328.    [Back]

Note 51   M Zander, supra, p 2.    [Back]

Note 52   P Wilkitzki (Federal Ministry of Justice, Bonn), cit International Efforts to Combat Money Laundering ed W C Gilmore (Cambridge International Documents Series, vol 4, 1992), p ix.    [Back]

Note 53   See F Keyser-Ringnalda, "European integration with regard to the confiscation of the proceeds of crime" (1992) 17 European Law Review 499.    [Back]

Note 54   For the text of the Convention and a commentary, see the Explanatory Report on the Convention (Council of Europe, Strasbourg, 1991). The text and Report are also printed in International Efforts to Combat Money Laundering ed W C Gilmore (Cambridge International Documents Series, vol 4, 1992), pp 177, 192, and discussed in the Introduction, pp xiv-xvi.    [Back]

Note 55   No 91/308/EEC: OJ 1991, L 166/77. See K D Magliveras, "Defeating the money launderer - the international and European framework" 1992 Journal of Business Law 161; Money Laundering ed H L MacQueen (1993), esp P J Cullen, "Money laundering: the European Community Directive" p 34.    [Back]

Note 56   Criminal offences related to money laundering are created by the 1987 Act, ss 42A, 43A, 43B and the 1988 Act, ss 93A-93E, all inserted by the 1993 Act, ss 17, 19, 29-33, which are now in force.    [Back]

Note 57   SI 1993, No 1933. See A N Brown, "Money laundering in Scotland: the law" in Money Laundering (above), p 50, and "Money laundering and Scottish solicitors" (1994) 39 JLSS 132.    [Back]

Note 58   See para 2.3 above.    [Back]

Note 59   See para 2.5 above.    [Back]

Note 60   "Instrumentalities", ie items of property used in crime, are considered in Parts XI to XVII of this report.    [Back]

Note 61   Convention, art 1.    [Back]

Note 62   See paras 2.3-2.5 above.    [Back]

Note 63   Convention, arts 3, 11. See para 9.1 below.    [Back]

Note 64   Ibid, art 5. See para 10.1 below.    [Back]

Note 65   Ibid, art 7.2. See para 18.1 below.    [Back]

Note 66   DP, paras 5.1-5.16, prop 15.    [Back]

Note 67   See para 2.2 above.    [Back]

Note 68   On conviction on indictment a fine or a compensation order of any amount may be imposed: Criminal Procedure (Scotland) Act 1975 (hereafter "the 1975 Act") s 193A; Criminal Justice (Scotland) Act 1980, s 59(2).    [Back]

Note 69   The English legislation as at 1 June 1992 (before amendment by the Criminal Justice Act 1993) is discussed in A R Mitchell, M G Hinton and S M E Taylor, Confiscation (1992) (hereafter "Mitchell"). See also D Feldman, Criminal Confiscation Orders - The New Law (1988) (hereafter "Feldman") and the reports cited in para 2.6 above, first footnote.    [Back]

Note 70   See para 2.3 above.    [Back]

Note 71   The special features are: the rules for the assessment of the proceeds of drug trafficking (CJ(S)A, s 3: see paras 6.7-6.8 below); the concept of the "implicative gift" (CJ(S)A, s 6: see para 4.21 below); and rules as to investigations and the disclosure of information (CJ(S)A, ss 38-40, 41: see paras 9.47-9.49 below).    [Back]

Note 72   The necessary amendments are set out in Schedule 3 to the draft Bill, and the effect of the amendments is shown in the version of Part I of the 1987 Act which is printed in Appendix B to this report. See paras 20.4, 20.5 below.    [Back]

Note 73   This is the approach in CJ(S)A, s 1 and CJA, s 71.    [Back]

Note 74   In DP, paras 5.19-5.20, prop 16, it was suggested that a confiscation order might be either an order for payment or "such other order as the court considers appropriate in the circumstances". We share the view of experienced consultees that anything other than an order for payment would be unnecessarily complex.    [Back]

Note 75   Hansard, HL Deb vol 539, cols 1350, 1383, vol 540, col 750 per Earl Ferrers, Minister of State, Home Office.    [Back]

Note 76   Ibid, vol 540, cols 742 per Baroness Mallalieu, 1470, 1471, 1474 per Lord Williams of Mostyn.    [Back]

Note 77   On standards of proof, see Part VI; on the relationship between the confiscation order and other orders, see Part V.    [Back]

Note 78   A Ashworth, Sentencing and Penal Policy (1983), p 294, cit M Wasik "The Hodgson Committee Report on the Profits of Crime and Their Recovery" [1984] Crim L R 708 at p 711. See also A Ashworth, Sentencing and Criminal Justice (1992), pp 72-73, 293-295.    [Back]

Note 79   Mitchell, p xi.    [Back]

Note 80   Feldman, p 95: see also p 113.    [Back]

Note 81   Mitchell, p xii.    [Back]

Note 82   Re Thomas (disclosure order) [1992] 4 All ER 814 at p 819 per Leggatt LJ. Cf the dictum of Sir Thomas Bingham MR in In re Barretto cit para 2.17 below.    [Back]

Note 83   Hansard, HL Deb vol 540, col 749 per Lord Ackner.    [Back]

Note 84   A compensation order, on the other hand, is usually (although not necessarily) a means of satisfying a claim which could otherwise be vindicated by civil litigation: Criminal Justice (Scotland) Act 1980, s 58; Reparation by the Offender to the Victim in Scotland (1977) Cmnd 6802, paras 7.10-7.17. Cf R v Inwood (1974) 60 Cr App R 70 at p 73, R v Daly [1974] 1 WLR 133 at p 134; R v Chappell (1984) 6 Cr App R (S) 214.    [Back]

Note 85   See para 2.2 above.    [Back]

Note 86   Law Reform (Miscellaneous Provisions) (Scotland) Act 1940, s 1, which is concerned with the enforcement of decreesad factum praestandum, ie for the performance of an act other than the payment of money.    [Back]

Note 87   From 1987 to 1992 the total number of civil prisoners received into custody in any year did not exceed 34 and the average daily number in custody was 1 (Prison Statistics Scotland 1992 (Scottish Office, 1993), Tables 1, 6). Even those prisoners were not necessarily debtors: a civil court may imprison for other reasons eg contempt of court, breach of interdict or breach of poinding (Debtors (Scotland) Act 1987, s 29(1)).    [Back]

Note 88   Civil Imprisonment (Scotland) Act 1882, ss 3, 4. Gray v Gray 1993 SCLR 580 is a very rare modern reported example.    [Back]

Note 89   Report on Diligence and Debtor Protection (1985) Scot Law Com No 95, vol 1, paras 7.70-7.80; Debtors (Scotland) Act 1880, s 4, as amended by the Debtors (Scotland) Act 1987, Sched 6, para 8 and Sched 8, and by the Court of Session Act 1988, s 52(5); Debtors (Scotland) Act 1987, s 74(3).    [Back]

Note 90   The resources of the parties are relevant in determining the amount of an award of aliment or of a financial order on divorce (Family Law (Scotland) Act 1985, ss 4(1), 8(2)(b)).    [Back]

Note 91   See paras 3.7-3.11 below.    [Back]

Note 92   Criminal Procedure (Scotland) Act 1975, ss 194, 395(1).    [Back]

Note 93   Criminal Justice (Scotland) Act 1980, s 59(1).    [Back]

Note 94   Ms portfolio 98 f4 cit Hodgson, p 6.    [Back]

Note 95   In re Barretto, [1994] 2 WLR 149 per Sir Thomas Bingham MR at p 155.    [Back]

Note 96   In Welch v UK (12 February 1993, unreported) the European Commission of Human Rights admitted a complaint notwithstanding the respondent's submission that a confiscation order under the DTOA was not a penalty for the purposes of art 7 of the European Convention on Human Rights. In its report of 15 October 1993 the Commission expressed the opinion that there had been no violation of art 7 (seven votes to seven with the casting vote of the acting President). The Commission has referred the case to the European Court of Human Rights: (1994) 5 Human Rights Case Digest 44. See para 20.8 below.    [Back]

Note 97   See Part III below.    [Back]

Note 98   See Part IV below.    [Back]

Note 99   See Part V below.    [Back]

Note 100   See Part VI below.    [Back]

Note 101   See Part VII below.    [Back]

Note 102   See Part VIII below.    [Back]

Note 103   See Part IX below.    [Back]

Note 104   See Part X below.    [Back]

Note 105   See Part XVIII below.    [Back]

Note 106   See Part XIX below.    [Back]

Note 107   See paras 3.2-3.6 below.    [Back]

Note 108   See paras 3.7-3.11 below.    [Back]

Note 109   See paras 4.2-4.7 below.    [Back]

Note 110   See paras 6.6-6.10 below.    [Back]

Note 111   See para 4.9 below.    [Back]

Note 112   See paras 4.31-4.33 below.    [Back]

Note 113   See paras 4.23-4.25 below.    [Back]

Note 114   See para 4.30 below.    [Back]

Note 115   See paras 4.28-4.30 below.    [Back]

Note 116   See paras 4.15-4.19 below.    [Back]

Note 117   See para 5.2 below.    [Back]

Note 118   See paras 5.8-5.24 below.    [Back]

Note 119   See paras 6.3, 6.4 below.    [Back]

Note 120   See paras 6.5, 6.11-6.13 below.    [Back]

Note 121   See paras 6.21, 6.22 below.    [Back]

Note 122   See para 6.28 below.    [Back]

Note 123   See paras 7.2-7.11 below.    [Back]

Note 124   See paras 7.12-7.16 below.    [Back]

Note 125   See paras 7.17, 7.18.    [Back]

Note 126   See paras 8.2-8.5 below.    [Back]

Note 127   See paras 8.6, 8.7 below.    [Back]

Note 128   See paras 9.11-9.13 below.    [Back]

Note 129   See paras 9.21, 9.22.    [Back]

Note 130   See paras 9.23, 9.24 below.    [Back]

Note 131   See paras 9.25, 9.26 below.    [Back]

Note 132   See para 9.34 below.    [Back]

Note 133   See paras 9.29, 9.30 below.    [Back]

Note 134   See para 9.44 below.    [Back]

Note 135   See para 9.38 below.    [Back]

Note 136   See paras 9.47-9.50 below.    [Back]

Note 137   See paras 10.4-10.7 below.    [Back]

Note 138   See para 10.8 below.    [Back]

Note 139   See para 18.4 below.    [Back]

Note 140   See para 18.8 below.    [Back]

Note 141   See paras 19.1-19.8 below.    [Back]

Note 142   See paras 19.9-19.15 below.    [Back]

Note 143   See paras 3.2-3.4 below.    [Back]

Note 144   See paras 3.5, 3.6 below.    [Back]

Note 145   See paras 3.7-3.11 below.    [Back]

Note 146   International Efforts to Combat Money Laundering ed W C Gilmore (Cambridge International Documents Series, vol 4, 1992), p xv.    [Back]

Note 147   DP, para 5.35, prop 24(b).    [Back]

Note 148   Confiscation legislation in Australia and Canada is also broad in scope: D McClean, "Seizing the proceeds of crime: the state of the art" (1989) 38 International and Comparative Law Quarterly 334 at p 342. See also para 19.4 below.    [Back]

Note 149   DP, para 5.34.    [Back]

Note 150   CJA, s 71(3)(a) and Sched 4, Pt I as substituted by the Criminal Justice Act 1988 (Confiscation Orders) Order 1990 (SI 1990/1570), art 3.    [Back]

Note 151   Offences to which the following provisions, all substituted by the Entertainments (Increased Penalties) Act 1990, c 20, s 1, apply: London Government Act 1963, c 33, Sched 12, para 10(3A); Private Places of Entertainment (Licensing) Act 1967, c 19, s 4(3A)(b); Local Government (Miscellaneous Provisions) Act 1982, c 30, Sched 1, para 12(2B).    [Back]

Note 152   Local Government (Miscellaneous Provisions) Act 1982, Sched 3, paras 20, 21.    [Back]

Note 153   Video Recordings Act 1984, c 39, ss 9, 10, 15(1).    [Back]

Note 154   Cinemas Act 1985, c 13, ss 10(1)(a), 11(1)(a).    [Back]

Note 155   CJA, Sched 4, Pt II.    [Back]

Note 156   Criminal Justice Act 1982, s 37(2), substituted by the Criminal Justice Act 1991, s 17(1).    [Back]

Note 157   eg Civic Government (Scotland) Act 1982, s 7(1), (2), as amended by the Entertainments (Increased Penalties) Act 1990, s 2 (£20,000 or six months); 1982 Act, Sched 2, para 19(3) (£10,000); Video Recordings Act 1984, ss 9, 10, 15(1) (£20,000); Cinemas Act 1985, ss 10(1)(a), 11(1)(a) (£20,000).    [Back]

Note 158   Criminal Procedure (Scotland) Act 1975, s 289G(2), inserted by the Criminal Justice Act 1982, s 54, and substituted by the Criminal Justice Act 1991, s 17(1).    [Back]

Note 159   eg most of the offences under the Misuse of Drugs Act 1971; Civic Government (Scotland) Act 1982, s 7(1), (2), noted above.    [Back]

Note 160   1975 Act, s 289(d).    [Back]

Note 161   See paras 6.1, 6.5 below.    [Back]

Note 162   Criminal Procedure (Scotland) Act 1975, ss 182, 183(1), 383, 384(1).    [Back]

Note 163   For the sake of convenience, any reference in this report to a conviction of an offence includes, unless otherwise indicated, a reference to a finding that the offence has been committed. The draft Bill contains provisions to the like effect: cll 38(4), 39(3); Sched 3, para 32.    [Back]

Note 164   In Scotland the power to make a forfeiture order under PT(TP)A, s 13 is not restricted to the High Court.    [Back]

Note 165   The offences under the Misuse of Drugs Act 1971 listed in CJ(S)A, s 1(2)(a) are punishable on summary conviction by 12 months' imprisonment (in the case of ss 4(2), 4(3) and 5(3), where a Class A or Class B drug is involved). The offences under the Customs and Excise Management Act 1979 listed in CJ(S)A, s 1(2)(b) may be punishable on summary conviction by a penalty in excess of level 5 or six months' imprisonment or both. The offences under ss 42A and 43 of CJ(S)A listed in CJ(S)A, s 1(2)(bb) and (c) are punishable on summary conviction by six months' imprisonment. The offences under the Criminal Justice (International Co-operation) Act 1990 listed in CJ(S)A, s 1(2)(cc), added by para 5(2)(a) of Sched 4 to the former Act, are punishable on summary conviction by six months' imprisonment (in the case of s 19, where a Class A or Class B drug is involved).    [Back]

Note 166   DP, para 5.35, prop 24(a).    [Back]

Note 167   CJA, s 71(7).    [Back]

Note 168   On the prosecutor's discretion to move for an order, see paras 6.3-6.4 below.    [Back]

Note 169   On the determination of the amount that might be recoverable, see paras 4.8-4.33 below.    [Back]

Note 170   Report (cit para 2.6 above, first footnote), para 2.26.    [Back]

Note 171   CJA, s 71(6).    [Back]

Note 172   Ibid, s 74(3).    [Back]

Note 173   DTOA, s 2(2), (3) (amended by the Criminal Justice Act 1993, s 9, not yet in force); CJ(S)A, s 3.    [Back]

Note 174   DP, paras 5.15-5.16, prop 13(a).    [Back]

Note 175   DTOA, s 4(3); CJ(S)A, s 1(1); CJA, s 71(6); NI(EP)A, s 47(7).    [Back]

Note 176   DP, paras 5.36-5.37, prop 25.    [Back]

Note 177   DTOA, s 4(3) and CJA, s 71(6) use the formula "the amount appearing to the court to be" the amount that might be realised.    [Back]

Note 178   See recommendation 5, para 3.11 above.    [Back]

Note 179   Arts 2.1, 1a. See para 2.9 above.    [Back]

Note 180   Draft Bill, cll 2(4), 38(1).    [Back]

Note 181   See G H Gordon, The Criminal Law of Scotland (2nd edn, 1978) paras 18-14, 18-23, 18-24.    [Back]

Note 182   Cf R v Osei [1988] Crim L R 775 (money paid before importation of drug).    [Back]

Note 183   The expression "in connection with" is used in DTOA, ss 1(3), 2(1)(a) and in CJ(S)A, s 3(1)(a), (2)(a), (b). CJA, s 71(4), has "as a result of or in connection with". The words "as a result of" appear to us to be superfluous.    [Back]

Note 184   Companies Act 1985, c 6, s 342.    [Back]

Note 185   1985, c 8, ss 1, 2, 4, 5, 8, as amended.    [Back]

Note 186   1976, c 67. See G H Gordon, The Criminal Law of Scotland (2nd edn, 1978, Supp, 1992) paras 36-43, 36-46 to 36-48.    [Back]

Note 187   The Independent, 26 March 1991 (earlier proceedingssub nom R v Central Criminal Court, Ex p Randle [1991] 1 WLR 1087). The accused had allegedly helped a convicted spy to escape from prison. They were acquitted and proceedings under the 1988 Act were discontinued. See A Freiberg, "Confiscating the Literary Proceeds of Crime" [1992] Crim L R 96.    [Back]

Note 188   It would also be possible, under further provisions of the Bill to be discussed later, to confiscate the proceeds of a book about the crime or sentence written by the offender after conviction: see paras 7.2-7.11, 7.17-7.18 below.    [Back]

Note 189   Hodgson, pp 74-75.    [Back]

Note 190   DTOA, s 2(1); CJA, s 71(4).    [Back]

Note 191   R v Smith [1989] 1 WLR 765 (DTOA, s 2(1)); Re K [1991] Crown Office Digest 18 (CJA, s 71(4)).    [Back]

Note 192   DTOA, s 2(1); CJ(S)A, s 3(1).    [Back]

Note 193   Proceeds of Crime Act 1987 (Commonwealth of Australia), s 27(8); Proceeds of Crime Act 1991 (New Zealand), s 27(3). Other Australian legislation to the same effect is cited in D McClean, International Judicial Assistance (1992), pp 229-230.    [Back]

Note 194   1944 JC 21.    [Back]

Note 195   Ibid at pp 25-26.    [Back]

Note 196   Cf R v Comiskey (1991) 93 Cr App R 227 at p 233: "... the court cannot close its eyes to the obvious and cannot ignore the fact that some expenses must have been incurred. There can be no question of carrying out an accountancy exercise, but it does seem to us that some acknowledgment ought to be made of the realities of the situation."    [Back]

Note 197   See recommendation 5, para 3.11 above.    [Back]

Note 198   DTOA, s 5(3); CJ(S)A, s 5(4); CJA, s 74(3); NI(EP)A, s 50(3). Accordingly "realisable property" and "the amount that might be realised" are not synonymous: where the latter is the lesser of the two amounts referred to in para 4.8 above, the maximum amount of the confiscation order will be that amount, not the value of the realisable property.    [Back]

Note 199   See paras 4.10-4.14 below.    [Back]

Note 200   See paras 4.15-4.19 below.    [Back]

Note 201   See paras 4.20-4.30 below.    [Back]

Note 202   See paras 4.31-4.33 below.    [Back]

Note 203   See paras 9.6 ff below.    [Back]

Note 204   See paras 9.21-9.23 below.    [Back]

Note 205   See para 2.1 above.    [Back]

Note 206   Such an application may be strictly unnecessary: the fact that the restraint order interdicts a named person from dealing with the property would not seem to prevent the police from seizing it in the execution of their duties.    [Back]

Note 207   See paras 9.26-9.29 below.    [Back]

Note 208   See paras 4.23-4.25, 9.4(ii) below. A restraint order initially granted in wider terms should be restricted as soon as possible.    [Back]

Note 209   See paras 9.26-9.29 below.    [Back]

Note 210   See paras 10.4 ff below.    [Back]

Note 211   Draft Bill, Sched 1, para 10.    [Back]

Note 212   The circumstances in which proceedings are instituted are defined in the draft Bill, cl 38(3): see paras 9.16, 9.20, recommendation 47(2) below.    [Back]

Note 213   See paras 9.21-9.23 below.    [Back]

Note 214   CJ(S)A, s 5(1)(b) is to this effect.    [Back]

Note 215   The definitions in DTOA, s 5(1)(b), CJ(S)A, s 5(1)(b), CJA, s 74(1)(b) and NI(EP)A, s 50(1)(b) also include the whole estate of the recipient. Since, however, the object is to realise no more than the value of the gift, it would normally be unnecessary to exercise the powers conferred by the legislation in relation to his whole estate. See para 4.10 above, third footnote.    [Back]

Note 216   See Part XVIII below.    [Back]

Note 217   Draft Bill, cll 2(4), 38(1): see para 4.3 above.    [Back]

Note 218   See para 4.9 above.    [Back]

Note 219   CJ(S)A, s 5(2) as amended by the Criminal Justice (International Co-operation) Act 1990, Sched 4, para 5(4), Sched 5.    [Back]

Note 220   W W McBryde, Bankruptcy (1989), p 123.    [Back]

Note 221   Draft Bill, Sched 1, para 2(1)(a)(i), (3), derived from CJ(S)A, s 14(1)(a)(i), (3).    [Back]

Note 222   Ibid, para 2(1), derived from CJ(S)A, s 14(1).    [Back]

Note 223   Trust property is similarly excluded from vesting in a trustee in bankruptcy: Bankruptcy (Scotland) Act 1985, s 33(1)(b).    [Back]

Note 224   There are provisions to that effect in DTOA, s 5(2), CJA, s 74(2), all as amended, and NI(EP)A, s 50(2).    [Back]

Note 225   On the valuation of gifts, see paras 4.23-4.25 below.    [Back]

Note 226   Draft Bill, cl 1(1); see para 2.13 above.    [Back]

Note 227   CJ(S)A, s 23(6).    [Back]

Note 228   CJ(S)A, ss 9(1), 13(2)(a).    [Back]

Note 229   In England and Wales there is authority to the effect that a court should not make a compensation order which can be satisfied only by the sale of the family home, unless the offender will be able to buy a less expensive house after satisfying the order: R v Holah (1989) 11 Cr App R (S) 282, R v McGuire (1992) 13 Cr App R (S) 332. There does not appear to be any similar rule as to confiscation orders: R v Preston [1990] Crim L R 528. In R v Judge and Woodridge (1992) 13 Cr App R (S) 685 and R v Crutchley and Tonks [1994] Crim L R 309 the value of the family home was taken into account in determining the amount that might be realised.    [Back]

Note 230   1985, c 66. Cf Insolvency Act 1986, c 45, s 336.    [Back]

Note 231   Report of the Review Committee on Insolvency Law and Practice (1982) Cmnd 8558, para 1118.    [Back]

Note 232   "Relevant consent" means the consent of the debtor's spouse or former spouse or, where the debtor and the child occupy the house, the consent of the debtor: s 40(4)(c). The debtor, accordingly, may obstruct the sale temporarily by withholding consent.    [Back]

Note 233   "Family home" means any property in which the debtor had (whether alone or in common with any other person) a right or interest, being property occupied as a residence by the debtor and his spouse or by the debtor's spouse or former spouse (in any case with or without a child of the family) or by the debtor with a child of the family: s 40(4)(a). This definition could apply to more than one house: for example, to a house occupied by the debtor and his spouse and to a house occupied by the debtor's former spouse: W W McBryde, Bankruptcy (1989), p 134.    [Back]

Note 234   "Child of the family" includes any child or grandchild of either the debtor or his spouse or former spouse, and any person who has been brought up or accepted by either the debtor or his spouse or former spouse as if he or she were a child of the debtor, spouse or former spouse whatever the age of such a child, grandchild or person may be: s 40(4)(b).    [Back]

Note 235   s 40(2). See Stewart v Salmon 1988 SCLR 647; Gourlay's Tr v Gourlay 1994 GWD 14-866.    [Back]

Note 236   See para 4.16 above, footnote.    [Back]

Note 237   Bankruptcy (Scotland) Act 1985, s 40(2).    [Back]

Note 238   Cf Insolvency Act 1986, s 336(4)(e): "all the circumstances of the case other than the needs of the bankrupt".    [Back]

Note 239   See para 6.5 below.    [Back]

Note 240   See para 6.28 below.    [Back]

Note 241   See para 4.7 above.    [Back]

Note 242   Paras 4.9-4.11, 4.13 and recommendation 7 above.    [Back]

Note 243   See paras 4.23-4.25, 9.4(ii) below. The value of the gift is part of "the amount that might be realised" even if the third party no longer owns it and it is thus no longer "realisable property": R v Dickens [1990] 2 QB 102.    [Back]

Note 244   See para 4.21 below.    [Back]

Note 245   See para 4.22 below.    [Back]

Note 246   See paras 4.23-4.25 below.    [Back]

Note 247   See paras 4.26-4.30 below.    [Back]

Note 248   Paras 4.11, 4.13 and recommendation 7 above.    [Back]

Note 249   This assumption is implicit in CJA, s 74(10)(a). It may be unsound where there has been a substantial lapse of time between the date of the offence and the date of the gift.    [Back]

Note 250   DTOA, s 5(9) and CJ(S)A, s 6(1), however, catch gifts made up to six years before the institution of the proceedings. In CJ(S)A such gifts, and others, fall within the complex definition of "implicative gift" in s 6.    [Back]

Note 251   See paras 6.11-6.13 below.    [Back]

Note 252   eg "services worth money":Re B, 13 May 1991, unreported, cit Mitchell, paras 5.96-5.97.    [Back]

Note 253   DTOA, s 5(10); CJ(S)A, s 6(2); CJA, s 74(12); NI(EP)A, s 50(9).    [Back]

Note 254   DTOA, s 5(5)(a); CJ(S)A, s 5(5)(b)(i); CJA, s 74(7)(a); NI(EP)A, s 50(6)(a). In Australia the Proceeds of Crime Act 1987, s 27(3), provides that the court, in quantifying the value of a benefit, "may treat as the value of the benefit the value that the benefit would have had if derived at the time when the valuation is being made and, without limiting the generality of this, may have regard to any decline in the purchasing power of money between the time when the benefit was derived and the time when the valuation is being made".    [Back]

Note 255   The inflation table in Kemp & Kemp, The Quantum of Damages (revised ed, 1991), para 0-101, also printed in McEwan & Paton, Damages in Scotland (2nd ed, 1989), p xxxvii, is often referred to in actions of damages in respect of death or personal injury: eg Bowers v Strathclyde RC 1981 SLT 122 per Lord Cameron at p 125; Gammell v Wilson [1982] AC 27 per Megaw LJ at p 42. On judicial reference to the retail prices index see Wright v British Railways Board [1983] 2 AC 773 per Lord Diplock at p 782.     [Back]

Note 256   Defined as in para 4.14, recommendation 13(2) above.    [Back]

Note 257   See para 4.14 above.    [Back]

Note 258   DTOA, s 5(5) and (6); CJA, s 74(7) and (8); NI(EP)A, s 50(6) and (7).    [Back]

Note 259    To be strictly correct, each £2,500 should be adjusted for inflation.    [Back]

Note 260    Again, each £1,000 should be adjusted for inflation.    [Back]

Note 261   See paras 4.10, 4.13, recommendation 12 above.    [Back]

Note 262   See paras 4.15-4.19, recommendation 14 above.    [Back]

Note 263   CJA, s 74(10)(b).    [Back]

Note 264   CJ(S)A, s 5(7). See para 4.27 below.    [Back]

Note 265   CJ(S)A, s 8(2)(b). See para 4.28 below.    [Back]

Note 266   In HMA v McLean 1993 SCCR 917 the alleged recipient of an implicative gift was allowed to be represented as a minuter at a hearing on an application for a confiscation order under CJ(S)A, s 1. While that was plainly just, it is not clear that she was entitled to appear in terms of the 1987 Act. In any event she would not have been entitled to make any application under the 1987 Act after the confiscation order had been made. Under our proposals a recipient's entitlement to apply to the court and the grounds of application would be specified. There is, however, a difficulty as to entitlement to legal aid: see para 10.8 below.    [Back]

Note 267   1987 Act, s 47(1).    [Back]

Note 268   1975 Act, ss 230-280A (solemn procedure), 453B, 453C (summary procedure).    [Back]

Note 269   They seem to have been derived from the Bankruptcy (Scotland) Act 1985, s 34(4)(c)(ii), (5), and the Insolvency Act 1986, s 242(4)(c)(ii), (5).    [Back]

Note 270   CJ(S)A, s 5(4); DTOA, s 5(3); CJA, s 74(3); NI(EP)A, s 50(3).    [Back]

Note 271   CJ(S)A, s 5(8).    [Back]

Note 272   DP, paras 5.10-5.12, 5.16, prop 14(c).    [Back]

Note 273   D J Fried, "Rationalizing criminal forfeiture" (1988) 79 J Crim Law and Criminology 328 at pp 424-430.    [Back]

Note 274   See paras 2.14-2.17 above.    [Back]

Note 275   CJA, s 71(1), is to this effect.    [Back]

Note 276   See paras 5.8-5.11 below.    [Back]

Note 277   See paras 5.12-5.24 below.    [Back]

Note 278   1978 Act, s 1(1), (7); Criminal Justice (Scotland) Act 1980, s 58(1).    [Back]

Note 279   DTOA, s 1(6); CJ(S)A, s 1(5); CJA, s 72(6); NI(EP)A, s 48(6).    [Back]

Note 280   DTOA, s 1(4); CJA, s 72(4). As amended by the 1993 Act, these Acts make provision for postponed determinations: 1993 Act, ss 8, 28 (not yet in force, 1 May 1994).    [Back]

Note 281   On the postponement of confiscation orders, see Part VI below.    [Back]

Note 282   A forfeiture order may be either a suspended forfeiture order, as we recommend in Part XII below, or an order for forfeiture under a particular statute: see para 5.15 below.    [Back]

Note 283   The relationship between a confiscation order and such sentences is further considered in paras 5.8-5.11 below.    [Back]

Note 284   In this part we include in the term "imprisonment" custodial sentences on young offenders.    [Back]

Note 285   DTOA, s 1(5); CJA, s 72(5); NI(EP)A, s 48(5).    [Back]

Note 286   CJA, s 72(5) and NI(EP)A, s 48(5) make an exception for compensation orders. We consider later the relationship between confiscation orders and compensation orders: see paras 5.17-5.24 below.    [Back]

Note 287   R v Saunders (1991) 92 Cr App R 6 at p 10.    [Back]

Note 288   R v Inwood (1974) 60 Cr App R 70 at p 73; R v Copley (1979) 1 Cr App R (S) 55.    [Back]

Note 289   Milligan v Jessop 1988 SCCR 137.    [Back]

Note 290   McLean v MacDougall 1989 SCCR 625, commentary at p 627; C G B Nicholson, Sentencing (2nd ed, 1992), p 219.    [Back]

Note 291   This was proposed by Hodgson, pp 137-138 (see also Sir Derek Hodgson, foreword to Mitchell, pp vii-viii) and supported by M Wasik, "The Hodgson Committee Report on the Profits of Crime and Their Recovery" [1984] Crim L R 708 at p 712 on the ground that the sentence discount would be akin to the incentive provided by the discount allowed by the English (but not yet the Scottish) courts for pleading guilty. Sentence discounting is discussed in Improving the Delivery of Justice in Scotland: 1993 Review of Criminal Evidence and Criminal Procedure (Scottish Office, 1993), chap 11.    [Back]

Note 292   See paras 5.17-5.24 below.    [Back]

Note 293   1975 Act, ss 194, 395(1).    [Back]

Note 294   DTOA, s 1(5)(b)(i); CJ(S)A, s 1(3); CJA, s 72(5)(a); NI(EP)A, s 48(5)(a).    [Back]

Note 295   CJ(S)A, s 44 (replacing s 193B of the 1975 Act, referred to in HMA v McLean 1993 SCCR 917 which was repealed by CJ(S)A, Sched 2). For an example of a decision that a fine would not be justified in terms of s 44 see HMA, Petr 1994 SCCR 136 at p 139, note.    [Back]

Note 296   DTOA, s 1(5)(b)(ii); CJA, s 72(5)(b); NI(EP)A, s 48(5)(b).    [Back]

Note 297   See paras 5.17-5.24 below.    [Back]

Note 298   See Part XII below.    [Back]

Note 299   See para 12.16 below.    [Back]

Note 300   Law Reform (Miscellaneous Provisions) (Scotland) Act 1968, s 10, as amended.    [Back]

Note 301   Watson, Laidlaw, & Co Ltd v Pott, Cassels, & Williamson 1914 SC (HL) 18 per Lord Shaw of Dunfermline at pp 29-30.    [Back]

Note 302   DP, para 5.16, prop 14(a), (b).    [Back]

Note 303   See para 5.10 above.    [Back]

Note 304   DP, para 5.42, prop 28. NI(EP)A, s 48(7), is in the same terms as CJA, s 72(7).    [Back]

Note 305   See para 4.31 above.    [Back]

Note 306   CJ(S)A, s 5(4), (8)(a)(ii).    [Back]

Note 307   See para 4.33 above.    [Back]

Note 308   See paras 9.40-9.41 below.    [Back]

Note 309   On restraint orders see Part IX below.    [Back]

Note 310   See para 5.7 above.    [Back]

Note 311   Scottish Current Law Statutes, annotation to s 1(4) by C Gane.    [Back]

Note 312   See paras 2.12, 2.13, recommendation 1(2) above.    [Back]

Note 313   DTOA, s 1(1) as amended by the Criminal Justice Act 1993, s 7(1) (not yet in force at the time of writing), allows the court to make an order on its own initiative and requires it to do so on the prosecutor's request. CJA, s 72(2) requires the court to consider a confiscation order where the prosecutor gives notice that there are likely to be sufficient assets to meet it: the Home Office Working Group's recommendation that the court should be obliged to make an order on such notice (Report on Part VI of CJA (1992), paras 2.24-2.25) was not implemented by the 1993 Act.    [Back]

Note 314   DP, paras 5.21-5.22, prop 17.    [Back]

Note 315   That is the position under DTOA, s 1(1), which will be amended on the coming into effect of s 7(1) of the Criminal Justice Act 1993: see commentary to R v Bragason [1988] Crim L R 778.    [Back]

Note 316   Para 3.8 above.    [Back]

Note 317   CJ(S)A, s 1(1).    [Back]

Note 318   Noon v HMA 1960 JC 52.    [Back]

Note 319   R W Renton and H H Brown, Criminal Procedure according to the Law of Scotland (5th edn, 1983 ed G H Gordon, updated by supplements) (hereafter "Renton and Brown"), para 15-03.    [Back]

Note 320   DP, para 5.7, prop 13(c); paras 5.30-5.33, prop 23.    [Back]

Note 321   [1990] 2 QB 102.    [Back]

Note 322   DTOA, s 1(7A), CJA, s 71(7A), inserted respectively by the 1993 Act, ss 7(2), 27(2) (not yet in force, 1 May 1994), reversing R v Dickenssupra.    [Back]

Note 323   Re Thomas (disclosure order) [1992] 4 All ER 814 at p 819 per Leggatt LJ; A Mitchell and M Hinton, "Confiscation inquiries - what the Dickens?" (1994) 58 Journal of Criminal Law 201.    [Back]

Note 324   See paras 2.14-2.17 above.    [Back]

Note 325   Paras 6.11-6.13 below.    [Back]

Note 326   CJ(S)A, s 3(2)(a); DTOA, s 2(3)(a). The latter provision is to be amended: see para 6.8, last footnote. For comparable approaches in Commonwealth legislation see D McClean, "Seizing the proceeds of crime: the state of the art" (1989) 38 International and Comparative Law Quarterly 334 at pp 343-349.    [Back]

Note 327   NI(EP)A, s 51(1).    [Back]

Note 328   PT(TP)A, s 13(5).    [Back]

Note 329   DP, para 5.7.    [Back]

Note 330   DP, para 5.16, prop 13(b).    [Back]

Note 331   See para 4.7 above.    [Back]

Note 332   They are thus to be distinguished from "rebuttable presumptions of law" which must be made unless overcome by contrary evidence: W G Dickson, The Law of Evidence in Scotland (3rd ed, 1887), para 112; W J Lewis, Manual of the Law of Evidence in Scotland (1925), p 20. CJ(S)A, s 3(2) likewise permits the making of assumptions. The similar discretionary assumptions in DTOA, s 2 will be rendered obligatory on the coming into effect of the amendments made by the Criminal Justice Act 1993, s 9. CJA 1988 has neither assumptions nor presumptions.    [Back]

Note 333   Robertson v Watson 1949 JC 73 per LJ-G Cooper at p 88. He need not adduce corroborated evidence: King v Lees 1993 SCCR 28.    [Back]

Note 334   1993 SCCR 917.    [Back]

Note 335   Para 6.5, recommendation 29 above.    [Back]

Note 336   Paras 6.6-6.10, recommendation 30 above.    [Back]

Note 337   R v Ilsemann (1990) 12 Cr App R (S) 398; R v Comiskey (1991) 93 Cr App R 227 at p 232.    [Back]

Note 338   D A Thomas, commentary to R v Comiskey [1991] Crim L R 484 at p 485.    [Back]

Note 339   In an exceptional case, discussed later, we recommend that the civil standard should apply: see paras 7.15, 7.16, recommendation 41(3) below.    [Back]

Note 340   See paras 3.9-3.11, recommendation 5 above.    [Back]

Note 341   CJ(S)A, s 4(1)-(3). The scheme is modelled on DTOA, s 3. S 3 is amended and a new s 3A inserted by s 10 of the Criminal Justice Act 1993 (not yet in force, 1 May 1994) to the effect that the prosecutor is obliged to provide a statement if asking the court to proceed under the Act, and may be required by the court to do so if the court proceeds on its own motion. We do not consider that the CJ(S)A scheme requires any similar alteration: see paras 6.3 above and 6.15-6.19 below.    [Back]

Note 342   Under the corresponding English provision, DTOA s 3(1), the figures accepted as conclusive for the purposes of the crown court are conclusive also in the Court of Appeal: R v Crutchley and Tonks [1994] Crim L R 309; R v Tredwen [1994] Crim L R 388, The Times 3 January 1994.    [Back]

Note 343   CJ(S)A, s 4(2). "The best way of doing what that subsection provides is to require the person to lodge answers to the statement with sufficient specification to meet the particular points which are at issue" (HMA, Petr, 1994 SCCR 136 at p 138).    [Back]

Note 344   CJ(S)A, s 4(3);HMA, Petr, above.    [Back]

Note 345   CJ(S)A, s 4(4).    [Back]

Note 346   CJ(S)A, s 2. See para 6.24 below.    [Back]

Note 347   HMA v McLean 1993 SCCR 917. The accused lodged answers to the Crown's statement, which was adjusted in the light of the answers; and the hearing proceeded on the basis of the adjusted statement and answers.    [Back]

Note 348   DP, para 5.33, props 18-19.    [Back]

Note 349   1975 Act, s 101(2)(b), as substituted by the Criminal Justice (Scotland) Act 1980, s 14(1).    [Back]

Note 350   Ibid, s 101(2)(a).    [Back]

Note 351   CJ(S)A, s 4(2). CJA, s 73(2), has "any matters he proposes to rely on", which we understand in practice produces responses which are much less specific than the written answers elicited by the Scottish provision.    [Back]

Note 352   CJ(S)A, s 4(3).    [Back]

Note 353   Forbes v HMA 1963 JC 68.    [Back]

Note 354   Para 3.11, recommendation 5 above.    [Back]

Note 355   CJ(S)A, s 4(4). DTOA, s 3(4), CJA, s 73(4) and NI(EP)A, s 52(4) are in similar terms.    [Back]

Note 356   DP, paras 5.26-5.28, 5.33, props 20, 21.    [Back]

Note 357   Procedural rules are provided by the Act of Adjournal (Consolidation) 1988, r 67A and r 201D of the Rules of the Court of Session.    [Back]

Note 358   HMA v McLean 1993 SCCR 917.    [Back]

Note 359   None of our consultees suggested that it might be objectionable for the trial judge to preside at the hearing on the ground that he might be required to assess the credibility and reliability of the accused's evidence at the hearing after his evidence at the trial had been rejected by the jury (or by the judge himself, in a summary trial).    [Back]

Note 360   InHMA v McLean, supra, Lord Sutherland preferred evidence given at the trial to certain evidence given at the hearing.    [Back]

Note 361   R v Dickens [1990] 2 QB 102 at p 106.    [Back]

Note 362   R v Jenkins [1991] Crim L R 481.    [Back]

Note 363   A N Brown, "Money laundering in Scotland: the law" in Money Laundering ed H L MacQueen (1993) 51 at p 58.    [Back]

Note 364   DP, para 5.33, prop 22.    [Back]

Note 365   The decision may be as to whether to make an order, or as to the amount to be payable. This is made explicit in the draft Bill, cl 7(1), but not in CJ(S)A, s 2(1).    [Back]

Note 366   See paras 5.8-5.11 above.    [Back]

Note 367   CJ(S)A, s 2(1). The question whether the six-month period might be extended in the exercise of the nobile officium was raised but not decided inHMA, Petr, 1994 SCCR 136.    [Back]

Note 368   CJ(S)A, s 2(2), (3), (4)(a).    [Back]

Note 369   [1991] 2 QB 249 at p 260.    [Back]

Note 370   We would expect the opinion of Lord Sutherland in HMA v McLean 1993 SCCR 917 to be taken as a model for subsequent decisions under CJ(S)A and any new Scottish legislation.    [Back]

Note 371   See Part VII.    [Back]

Note 372   See paras 7.2-7.11 below.    [Back]

Note 373   See paras 7.12-7.16 below.    [Back]

Note 374   See paras 7.17-7.18 below.    [Back]

Note 375   By making the assumption permitted by CJ(S)A, s 3(2)(a): see para 6.7 above.    [Back]

Note 376   The new scheme, however, like that in ss 16 and 17 of the 1990 Act (see In re Barretto [1994] 2 WLR 149), would not have retroactive effect: see para 20.5 below.    [Back]

Note 377   See paras 7.10-7.18 below. For convenience we do not make any further reference to new orders.    [Back]

Note 378   See paras 4.26-4.27 above.    [Back]

Note 379   Queen's Bench Division, 30 November 1992, not fully reported on this point inThe Times, 31 December 1992. The decision, although not the observation discussed in the text, was affirmed sub nom In re Barretto [1994] 2 WLR 149.    [Back]

Note 380   P Taylor, "The variation of confiscation orders" (1993) 143 NLJ 686, argues that s 16 does not extend to case (iii). In the Lexis version of the judgment Schiemann J states that after delivering the judgment he read Taylor's article in draft and was persuaded that there was force in his arguments.    [Back]

Note 381   We have no difficulty in accepting that when the original order is made there need be no connection between the benefit and the property to be realised: see para 4.15 above.    [Back]

Note 382   Bankruptcy (Scotland) Act 1985, s 31(1).    [Back]

Note 383   Ibid, s 32(6), (10).    [Back]

Note 384   Ibid, s 31(5).    [Back]

Note 385   Ibid, s 32(3) as amended by the Child Support Act 1991, Sched 5, para 6(2).    [Back]

Note 386   Inserted by the Criminal Justice Act 1993, s 12 (not yet in force, 1 May 1994). See ss 5A(10), 5B(8), 5C(15).    [Back]

Note 387   CJ(S)A, s 3(2)(a)(ii) is to the same effect.    [Back]

Note 388   Finance Act 1985, s 23, Sched 7, para 2, amending the Value Added Tax Act 1983, Sched 7, para 7(2).    [Back]

Note 389   Hansard, HL Deb vol 540, col 748 per Earl Ferrers, Minister of State, Home Office.    [Back]

Note 390   There is, however, an ordinary time-limit of six years on the making of assessments to tax: Taxes Management Act 1970, s 34(1) as amended by the Development Land Tax Act 1976, Sched 8, para 6.    [Back]

Note 391   Including any interest: see para 8.10, recommendation 44, below.    [Back]

Note 392   The enforcement of confiscation orders by imprisonment is discussed in Part VIII.    [Back]

Note 393   See para 5.25 above; draft Bill, cl 1(8).    [Back]

Note 394   Draft Bill, cl 11 (see para 8.9 below) and Part IV (see Part XVIII below).    [Back]

Note 395   cl 12; see para 8.10 below.    [Back]

Note 396   See paras 6.6-6.10 above.    [Back]

Note 397   DTOA, s 5C(10). Ss 5A(9) and 5B(6) are in similar terms.    [Back]

Note 398   See paras 4.28-4.30, recommendation 19 above.    [Back]

Note 399   DTOA, s 14 and CJA, s 83 are in terms similar to CJ(S)A, s 25. DTOA, s 14 is amended by the 1993 Act, s 11 (not yet in force, 1 May 1994).    [Back]

Note 400   Mitchell, para 6.16, suggests that both should be entitled to apply for a downwards variation of the order.    [Back]

Note 401   Including any interest: see para 8.10, recommendation 44, below.    [Back]

Note 402   If the sequestration or bankruptcy occurred after the making of a restraint order, the property concerned will not form part of his estate for distribution among creditors: see para 9.43 below.    [Back]

Note 403   See para 4.14 above.    [Back]

Note 404   See para 7.10, recommendation 39(1)(a) above.    [Back]

Note 405   See para 7.10 above.    [Back]

Note 406   See para 7.8 above.    [Back]

Note 407   DTOA, s 5A(6), inserted by the Criminal Justice Act 1993, s 12 (not yet in force, 1 May 1994), requires the court to take into account the amount of any fine imposed.    [Back]

Note 408   See para 7.10 above.    [Back]

Note 409   See paras 8.2-8.9 below.    [Back]

Note 410   See para 8.10 below.    [Back]

Note 411   DTOA, s 6 and CJA, s 75 likewise adopt fine enforcement procedures in England and Wales. See, however, the amendment to DTOA, s 6 discussed in para 8.4 below.    [Back]

Note 412   For the second see para 8.6 below.    [Back]

Note 413   Report on DTOA (1991), para 3.11.    [Back]

Note 414   Ss 13 and 41 are not yet in force at the time of writing (1 May 1994).    [Back]

Note 415   Hansard, HL Deb vol 540, cols 749-750 per Lord Ackner and Earl Ferrers, Minister of State, Home Office. Reference was also made to community charge debts which were not extinguished by imprisonment.    [Back]

Note 416   See paras 2.14-2.17 above.    [Back]

Note 417   The Debtors (Scotland) Act 1880, s 4, para 1, which preserved civil imprisonment for such debts, was repealed by the Debtors (Scotland) Act 1987, Sched 6, para 8. S 74(3) of the latter Act provides that no one may be imprisoned "for failure to pay rates or any tax".    [Back]

Note 418   See para 2.16 above.    [Back]

Note 419   For the current maxima see the 1975 Act, s 407(1A) as amended.    [Back]

Note 420   By the Criminal Justice (Scotland) Act 1980, Sched 7, para 61.    [Back]

Note 421   There are various statutory constraints on the imposition of imprisonment in default of payment: 1975 Act, s 396(1), (2), (3), (4).    [Back]

Note 422   It must also require a report from any administrator who has been appointed in relation to the confiscation order: 1975 Act, s 407 as applied by CJ(S)A, s 7(2).    [Back]

Note 423   So called because under earlier legislation the inquiry was into the offender's means: Criminal Justice (Scotland) Act 1963, s 25; 1975 Act, s 398(1) before amendment.    [Back]

Note 424   The prosecutor must have such an opportunity in an application for further time to pay a fine: 1975 Act, s 396(7), a curious provision which is regularly ignored in practice (C G B Nicholson, Sentencing (2nd ed, 1992), para 1-80).    [Back]

Note 425   R v Harrow JJ, ex p DPP (1991) 93 Cr App R 388 at p 391, [1991] 1 WLR 395 at p 398.    [Back]

Note 426   Including a period of imprisonment on default of payment of a fine where the default occurred before the issue of the warrant for imprisonment for the default in relation to the order: CJ(S)A, s 7(4).    [Back]

Note 427   DTOA, s 6(2) and CJA, s 75(3) are to the same effect.    [Back]

Note 428   The current rate is 8 per cent per annum: Rules of the Court of Session 1965 (SI 1965 No 321), r 66 as amended by Act of Sederunt (Rules of the Court of Session Amendment) (Interest in Decrees and Extracts) 1993 (SI 1993 No 770).    [Back]

Note 429   On this Convention see paras 2.8, 11.1 above.    [Back]

Note 430   For a review of the relevant provisions in United Kingdom and Commonwealth legislation see D McClean, "Seizing the proceeds of crime: the state of the art" (1989) 38 International and Comparative Law Quarterly 334 at pp 352-356; D McClean, International Judicial Assistance (1992), pp 207-214.    [Back]

Note 431   DP, paras 5.38-5.41, props 26, 27.    [Back]

Note 432   In re O (Restraint Order: Disclosure of Assets) [1991] 2 QB 520 per Lord Donaldson of Lymington MR at pp 527-528.    [Back]

Note 433   In this and the following paragraphs "the court" means the Court of Session or the sheriff exercising his civil jurisdiction.    [Back]

Note 434   See paras 4.20-4.22 above.    [Back]

Note 435   See paras 9.7-9.13 below.    [Back]

Note 436   See paras 9.14-9.23 below.    [Back]

Note 437   See paras 9.26-9.28 below.    [Back]

Note 438   See paras 7.9, 7.18 above.    [Back]

Note 439   See paras 9.29-9.30 below.    [Back]

Note 440   See paras 9.31-9.37 below.    [Back]

Note 441   See paras 9.39-9.41 below.    [Back]

Note 442   See paras 9.42-9.46 below.    [Back]

Note 443   See paras 9.47-9.50 below.    [Back]

Note 444   See para 9.51 below.    [Back]

Note 445   DTOA, s 13; CJA, s 82; NI(EP)A, Sched 4, para 13.    [Back]

Note 446   Draft Bill, cl 13(2).    [Back]

Note 447   Draft Bill, cl 13(3).    [Back]

Note 448   See paras 4.22-4.25 above. CJ(S)A, s 23(3) has "the value for the time being" of the gift.    [Back]

Note 449   Ibid, cl 13(4). See In re Peters [1988] QB 871 per Lord Donaldson of Lymington MR at p 879 on DTOA, s 13(4).    [Back]

Note 450   Ibid, cl 13(5).    [Back]

Note 451   Crown Proceedings Act 1947, s 46, proviso, as amended.    [Back]

Note 452   See para 9.6 below.    [Back]

Note 453   In re W (Buckley J) 12 September 1990, not fully reported on this point inThe Times, 15 November 1990: see Mitchell, para 3.20.    [Back]

Note 454   See paras 9.42-9.46 below.    [Back]

Note 455   See paras 4.15-4.19 above.    [Back]

Note 456   See paras 9.11-9.12 below.    [Back]

Note 457   eg In re Peters [1988] QB 871 at pp 879-881. They do not appear to correspond exactly: In re R (Restraint Order) [1990] 2 QB 307; Mitchell, paras 1.12, 3.01, 3.02.    [Back]

Note 458   The injunction is named after one of the two cases in which it was first established, Mareva Compania Naviera SA v International Bulkcarriers SA, The Mareva (1975) [1980] 1 All ER 213. The power to grant such an injunction is now regulated by statute (Supreme Court Act 1981, s 37; Civil Jurisdiction and Judgments Act 1982, s 25) and many decisions: see Halsbury's Laws of England (4th ed) vol 24 (re-issue, 1991), sv "Injunctions" paras 866-871.    [Back]

Note 459   Arrestment and inhibition on the dependence are explained in paras 9.33-9.35 below.    [Back]

Note 460   The court has wide powers to secure the effectiveness of an anti-avoidance order in an application under s 18 of the Family Law (Scotland) Act 1985: see s 18(2) and (4).    [Back]

Note 461   See the discussion in Diligence on the Dependence and Admiralty Arrestments (1989) Scot Law Com DP No 84, paras 2.45-2.50, 4.1-4.3, 4.7, 4.8, 4.13-4.16.    [Back]

Note 462   In re M (Restraint Order) [1992] 1 QB 377 at pp 382-383. The order does not restrain diligence, but the appointment of an administrator does so: see para 9.40 below.    [Back]

Note 463   "The policy of the [1986] Act is to catch a large category of property pending detailed investigation as to exactly what may properly be subject to confiscation." (D McClean, International Judicial Assistance (1992), p 209.)    [Back]

Note 464   In re W (Buckley J) 12 September 1990, not fully reported on this point inThe Times, 15 November 1990: see Mitchell, para 3.20.    [Back]

Note 465   eg "The Lord Ordinary ... interdicts [AB and CD] from dealing with their own or each other's realisable property and in particular and without prejudice to that generality with [specified heritable property and sums of money in specified accounts]."    [Back]

Note 466   See para 9.4(ii), (iii) above.    [Back]

Note 467   See para 4.10 above.    [Back]

Note 468   See paras 9.26-9.28 below.    [Back]

Note 469   See para 9.25 below.    [Back]

Note 470   See paras 4.10, 4.13, recommendation 7 above.    [Back]

Note 471   See Part XVIII below.    [Back]

Note 472   See draft Bill, cl 21(4).    [Back]

Note 473   CJA, s 77(1), (2); NI(EP)A, Sched 4, para 5(1), (2). A restraint order under the DTOA, s 8, may be made subject to exceptions relating to the defendant's living expenses and legal expenses: RSC Ord 115, r 4(1);In re P, In re W, The Times, 11 April 1990. In In re Watson Hutchison J observed that the purpose of a restraint order under the DTOA was to prevent the dissipation of assets, not to put the defendant in shackles, and suggested, obiter, that expenditure necessary to preserve and protect a legitimate business from collapse could probably be allowed (13 February 1990, unreported: cit D McClean, International Judicial Assistance (1992), p 209).    [Back]

Note 474   On Mareva injunctions see para 9.6 above.    [Back]

Note 475   In re Peters [1988] QB 871 at pp 879-881, referring to DTOA, ss 8(1), 13(2).    [Back]

Note 476   Customs and Excise Commissioners v Norris [1991] 2 QB 293.    [Back]

Note 477    See paras 3.2-3.4, recommendation 2 above.    [Back]

Note 478   1975 Act, ss 101, 331A, respectively substituted and inserted by the Criminal Justice (Scotland) Act 1980, s 14.    [Back]

Note 479   PT(TP)A, Sched 4, para 13(2)(c) is in similar terms. DTOA, s 7(1)(c)(ii) and NI(EP)A, Sched 4, para 4(2)(b)(ii), substituted by the Criminal Justice Act 1993, ss 13(3), 41(3) (not yet in force, 1 May 1994), prescribe a condition that it should appear to the court that there is reasonable cause to believe that the defender has benefited from drug trafficking or terrorist-related activities.    [Back]

Note 480   In re K (McCullough J), The Times, 30 September 1990.    [Back]

Note 481   See paras 3.7, 3.8, recommendation 4 above.    [Back]

Note 482   See Evidence: Report on Documentary Evidence and Proof of Undisputed Facts in Criminal Proceedings (1992) Scot Law Com No 137, paras 2.63, 4.19.    [Back]

Note 483   See para 9.18 above, first footnote.    [Back]

Note 484   See para 9.8 above.    [Back]

Note 485   In practice a copy of the petition specifying the charge is produced with and held as repeated in an Outer House petition for a restraint order in terms of CJ(S)A, s 8.    [Back]

Note 486   See paras 5.20-5.24 above.    [Back]

Note 487   DTOA, s 7(2), (4), NI(EP)A, Sched 4, para 4(2), (4) as substituted by the Criminal Justice Act 1993, ss 13(4), 41(3); CJA, s 76(2)(a), (4); PT(TP)A, Sched 4, para 13(3), (4).    [Back]

Note 488   See para 9.25 below.    [Back]

Note 489   See paras 7.2-7.9, recommendation 38 above.    [Back]

Note 490   See paras 7.17-7.18, recommendation 42 above.    [Back]

Note 491   The Rules of the Court of Session make provision for applications in relation to restraint orders under the CJ(S)A (rr 201E-201G) and the PT(TP)A (rr 201T-201V).    [Back]

Note 492   In practice, where the restraint order would affect heritage he might apply at the same time for an order for inhibition (see para 9.34 below) and for the appointment of an administrator (see paras 9.39-9.40 below).    [Back]

Note 493   Harris 1993 SCCR 881.    [Back]

Note 494   CJ(S)A, ss 8(1), 9(2); DTOA, s 8(4); CJA, s 77(5); PT(TP)A, Sched 4, para 14(1); NI(EP)A, Sched 4, para 5(5).    [Back]

Note 495   In re R (Restraint Order) [1990] 2 QB 307 at p 313.    [Back]

Note 496   Henderson v Maclellan (1874) 1 R 920; Anderson v Moncrieff 1966 SLT (Sh Ct) 28. The order may be effective notwithstanding the absence of formal intimation: Robertson v McDonald (1829) 7 S 272; Clark v Stirling (1839) 1 D 955; Matheson v Fraser 1911, 2 SLT 493; Neville v Neville 1924 SLT (Sh Ct) 43.    [Back]

Note 497   Gribben v Gribben 1976 SLT 266 at p 269. Contravention of a restraint order made under the NI(EP)A is a criminal offence: Sched 4, para 9.    [Back]

Note 498   CJ(S)A, s 8(2), (5)(b); DTOA, s 8(5) substituted by the Criminal Justice Act 1993, s 13(6), and s 8(5A) inserted by CJA, Sched 5, para 3(1); CJA, s 77(6), (7); PT(TP)A, Sched 4, para 14(2), (3); NI(EP)A, Sched 4, para 5(6) substituted by the Criminal Justice Act 1993, s 41(5), and para 5(7). (Ss 13 and 41 of the 1993 Act are not yet in force at the time of writing, 1 May 1994).    [Back]

Note 499   See paras 9.22, 9.23, recommendation 48(2) above; para 9.24, recommendation 49(3) above.    [Back]

Note 500   See para 9.25 above.    [Back]

Note 501   See paras 9.39-9.41 below.    [Back]

Note 502   CJ(S)A, s 8(4).    [Back]

Note 503   See para 9.8 above.    [Back]

Note 504   See para 9.12 above.    [Back]

Note 505   Customs and Excise Commissioners v Norris [1991] 2 QB 293.    [Back]

Note 506   See paras 4.28 -4.30, recommendation 19 above.    [Back]

Note 507   CJ(S)A, s 8(3).    [Back]

Note 508   RC 201E(1), 201G(1), inserted by SI 1990 No 705.    [Back]

Note 509   RC 264(b), as amended.    [Back]

Note 510   A party aggrieved by the granting of a restraint order should not reclaim but should in the first instance apply for the recall or variation of the order.    [Back]

Note 511   Sheriff Courts (Scotland) Act 1907, ss 27(a), 28(1)(d), as amended.    [Back]

Note 512   Act of Sederunt (Sheriff Court Ordinary Cause Rules) 1993, Sched 1, rules 31.1, 31.2(1), (2), which came into force on 1 January 1994.    [Back]

Note 513   CJ(S)A, s 10. The corresponding provisions are DTOA, s 8(8) (as amended by CJ(S)A, s 45(7)(b)), s 38(1); CJA, ss 77(10), 102(1); PT(TP)A, Sched 4, para 15; NI(EP)A, Sched 4, para 5(10), (11).    [Back]

Note 514   The draft Bill, Sched 4, para 1, so provides by amending s 44(3) of the Conveyancing (Scotland) Act 1924.    [Back]

Note 515   In practice, where a valuable moveable asset is to be the subject of a restraint order, the Crown may also obtain a warrant for arrestment: A N Brown, "Money laundering in Scotland: the law" in Money Laundering ed H L MacQueen (1993) 50 at p 56.    [Back]

Note 516   eg In re T (Restraint Order: Disclosure of Assets) [1992] 1 WLR 949.    [Back]

Note 517   In re O (Restraint Order: Disclosure of Assets) [1991] 2 QB 520 at p 526.    [Back]

Note 518   Ibid at pp 528, 530-531.    [Back]

Note 519   Istel Ltd v Tully [1993] AC 45. The practice is noted inThe Privilege Against Self-Incrimination in Civil Proceedings, a consultation paper issued by the Lord Chancellor's Department in July 1992, para 10.    [Back]

Note 520   See paras 16.11, 16.12, recommendation 96 below.    [Back]

Note 521   CJ(S)A, s 13(1); draft Bill, Sched 1, para 1. Where a restraint order is in force he cannot realise the property in the period between an application for the recall of the order and the court's decision on the application: CJ(S)A, s 8(4) (s 9(3) in Appendix B); draft Bill, cl 24(3). See paras 9.26, 9.28, recommendation 51(2) above.    [Back]

Note 522   CJ(S)A, s 23; draft Bill, cl 13. See paras 9.4, 9.5, recommendation 45 above.    [Back]

Note 523   CJ(S)A, s 14; draft Bill, Sched 1, para 2.    [Back]

Note 524   CJ(S)A, s 14(1)(a); draft Bill, Sched 1, para 2(1)(a).    [Back]

Note 525   CJ(S)A, s 24; draft Bill, Sched 1, para 12.    [Back]

Note 526   CJ(S)A, ss 15, 16; draft Bill, Sched 1, paras 3, 4.    [Back]

Note 527   CJ(S)A, ss 18, 20, 21; draft Bill, Sched 1, paras 6, 8, 9.    [Back]

Note 528   CJ(S)A, s 17(1); draft Bill, Sched 1, para 5(1).    [Back]

Note 529   CJ(S)A, s 17(2); draft Bill, Sched 1, para 5(2).    [Back]

Note 530   CJ(S)A, s 22; draft Bill, Sched 1, para 11. See RC 201L-201R. See also RC 201H-201K and, for administrators under the PT(TP)A, RC 201W-201Y.    [Back]

Note 531   "Diligence" in the sense used here means legal procedures for the enforcement of obligations due under court decrees or for obtaining security before judgment for sums claimed in court actions.    [Back]

Note 532   CJ(S)A, s 19; draft Bill, Sched 1, para 7.    [Back]

Note 533   CJ(S)A, s 14(1)(a), (j); draft Bill, Sched 1, para 2(1)(c), (j).    [Back]

Note 534   By the Housing Act 1988, Sched 17, para 81 (amending s 33(2)(b)).    [Back]

Note 535   We propose to add a requirement that where the property subject to the restraint order is heritable property in Scotland, the order must have been recorded in the General Register of Sasines or registered in the Land Register of Scotland before the date of sequestration.    [Back]

Note 536   By the Housing Act 1988, Sched 17, para 82 (amending s 34(2)(b)) and CJA, Sched 5, para 22 (amending s 34(6)(d)).    [Back]

Note 537   DTOA, ss 15-17, CJA, ss 84-86, all as amended.    [Back]

Note 538   CJ(S)A, s 33(5).    [Back]

Note 539   CJ(S)A, s 34(5); DTOA, s 15(6) as amended by the Criminal Justice Act 1993, s 13(9) (not yet in force, 1 May 1994); CJA, s 84(6).    [Back]

Note 540   Feldman, para 9.17.    [Back]

Note 541   Insolvency Act 1986, ss 238, 239.    [Back]

Note 542   Short's Tr v Chung 1991 SCLR 629.    [Back]

Note 543   Cf DTOA, s 17A (inserted by CJA, Sched 5, para 10); CJA, s 87; PT(TP)A, Sched 4, para 33; NI(EP)A, Sched 4, para 18.    [Back]

Note 544   The first two matters were noted in DP, para 5.41. For English and Commonwealth legislation on these subjects see D McClean, "Seizing the proceeds of crime: the state of the art" (1989) 38 International and Comparative Law Quarterly 334 at pp 356-358; D McClean, International Judicial Assistance (1992), pp 192-198.    [Back]

Note 545   By CJA, Sched 5, para 23 (amending s 38(5)).    [Back]

Note 546   CJ(S)A, ss 38(2), (5). The procedure is regulated by the AA (Consolidation) 1988, rr 154, 155 as amended by SI 1990 No 718.    [Back]

Note 547   For the procedure see AA (Consolidation) 1988, r 156 as amended by SI 1990 No 718.    [Back]

Note 548   ie authorised for the purposes of the Crown Proceedings Act 1947: CJ(S)A, s 47(1).    [Back]

Note 549   DTOA, ss 27-30 as amended. DTOA, s 29 and CJ(S)A, s 40 contain supplementary provisions and definitions. Special provision in relation to investigations and search warrants is made by NI(EP)A, Sched 5.    [Back]

Note 550   Report (1992), para 3.4.    [Back]

Note 551   DTOA, s 3A, inserted by the Criminal Justice Act 1993, s 10(5) (not yet in force, 1 May 1994) and apparently derived from the Report of the Home Office Working Group on the DTOA (1991), para 2.9.    [Back]

Note 552   D A Thomas, "The Criminal Justice Act 1993: (1) Confiscation orders and drug trafficking" [1994] Crim L R 93 at p 95.    [Back]

Note 553   Report (1992), para 3.8.    [Back]

Note 554   CJ(S)A, ss 42A, 43A, 43B inserted by the 1993 Act, ss 17, 19 (CJ(S)A, s 43 is amended by the 1993 Act, s 19(2), (3)); DTOA, ss 23A, 26B, 26C, inserted by the 1993 Act, ss 16, 18 (DTOA, s 24 is amended by the 1993 Act, s 18(2), (3)); CJA, ss 93A-93D inserted by the 1993 Act, ss 29-32. Ss 16-19 and 29-32 of the 1993 Act are now in force. See para 2.8 above.    [Back]

Note 555   s 93D(7).    [Back]

Note 556   s 93E, inserted by the 1993 Act, s 33 (now in force).    [Back]

Note 557   See paras 3.2-3.4, recommendation 2 above and draft Bill, cl 1(2).    [Back]

Note 558   For a review of Commonwealth legislation see D McClean, "Seizing the proceeds of crime: the state of the art" (1989) 38 International and Comparative Law Quarterly 334 at pp 349-352.    [Back]

Note 559   On the relevance of the Convention to the reform of Scots law, see Evidence: Report on Documentary Evidence and Proof of Undisputed Facts in Criminal Proceedings (1992) Scot Law Com No 137, para 4.17.    [Back]

Note 560   In Raimondo v Italy 22 February 1994 (not yet reported) the European Court of Human Rights held that the seizure and confiscation of property apparently not lawfully acquired, pending an irrevocable decision, was in the general interest and did not violate art 1 of the First Protocol.    [Back]

Note 561   Explanatory Report (Strasbourg, 1991), pp 19-20.    [Back]

Note 562   cl 13(3), (4): see para 9.4 above.    [Back]

Note 563   cll 4(6)-(8), 24(2), (5). See paras 4.28-4.30, 9.27-9.30 above.    [Back]

Note 564   cl 36. See paras 4.15-4.19 above.    [Back]

Note 565   cl 5(4). See paras 5.20-5.24 above.    [Back]

Note 566   See para 10.1 above.    [Back]

Note 567   cll 21(2), (3), 24. See paras 9.11-9.13, 9.25, 9.26-9.30 above. The ordinary rules of law apply to the recall, variation etc of any inhibitions, arrestments or ancillary interdicts which may follow on the making of a restraint order: see paras 9.32-9.37 above.    [Back]

Note 568   Sched 1, para 12(2). See paras 9.40-9.41 above.    [Back]

Note 569   Sched 1, para 1(4)(a). See paras 9.40-9.41 above.    [Back]

Note 570   Ibid, para 4(2). See paras 9.40-9.41 above.    [Back]

Note 571   Hodgson, pp 109, 154 (recommendation 31).    [Back]

Note 572   A Nicol, "Confiscation of the profits of crime" (1988) 52 JCL 75 at pp 81-82 on DTOA, s 19.    [Back]

Note 573   C Graham and C Walker, "The continued assault on the vaults bank accounts and criminal investigations" [1989] Crim L R 185 at p 195 on DTOA, s 19 and CJA, s 89.    [Back]

Note 574   C Gane, Scottish Current Law Statutes, general note to CJ(S)A, s 26.    [Back]

Note 575   Ibid, general note to Part I of CJ(S)A, para (h).    [Back]

Note 576    Criminal Procedure in Scotland (Second Report) (1975, Cmnd 6218), para 61.11.    [Back]

Note 577   cf the views of the Thomson Committee on a power to award expenses to acquitted persons: Criminal Procedure in Scotland (Second Report) above, para 61.13.    [Back]

Note 578   Court of Session Act 1988, s 28; RC 262; Sheriff Courts (Scotland) Act 1907, ss 27, 28 as amended.    [Back]

Note 579   See para 10.1 above.    [Back]

Note 580   See paras 17.5-17.7 below.    [Back]

Note 581   DTOA, s 19, as amended by CJ(S)A, s 45, CJA, Sched 5, para 12, and the Criminal Justice Act 1993, s 24(2); CJA, s 89; PT(TP)A, Sched 4, paras 7, 17, 27; NI(EP)A, Sched 4, para 20. Our amended version of CJ(S)A, s 26 follows most closely PT(TP)A, Sched 4, para 17.    [Back]

Note 582   cl 14.    [Back]

Note 583   The "conclusion of proceedings" is as defined in cl 22(7). See paras 9.16-9.17 above.    [Back]

Note 584   There is no time-limit in the compensation provisions in the other United Kingdom confiscation legislation. In view of the need to prove serious default, a three-year time-limit seems appropriate: cf the Prescription and Limitation (Scotland) Act 1973, ss 17, 18.    [Back]

Note 585   The "institution of proceedings" is defined in cl 38(3). See paras 9.16, 9.20 above.    [Back]

Note 586   See paras 9.21-9.23 above.    [Back]

Note 587   See para 17.7 below.    [Back]

Note 588   See paras 7.2-7.16 above.    [Back]

Note 589   See para 10.1 above.    [Back]

Note 590   I D Macphail, Sheriff Court Practice (1988), paras 26-25 (hearings; evidence); 1-32 (legal representation); 19-03, 26-45 (expenses).    [Back]

Note 591   See paras 4.28-4.30 above.    [Back]

Note 592   We understand that the recipient of an implicative gift who was allowed to appear in HMA v McLean 1993 SCCR 917 (see first footnote to para 4.29 above) could not be granted legal aid.    [Back]

Note 593   For the full terms of our reference see para 1.1 above. The words omitted from the quotation above, "... and of proceeds of criminal activity in general", are considered in Parts II-X.    [Back]

Note 594   See para 2.8 above.    [Back]

Note 595   Convention, article 1c.    [Back]

Note 596   Ibid, article 1d.    [Back]

Note 597   Explanatory Report on the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (Strasbourg, 1991), p 16. See para 11.3 below.    [Back]

Note 598   See para 11.3 below.    [Back]

Note 599   See para 11.4 below.    [Back]

Note 600   See para 11.5 below.    [Back]

Note 601   See para 11.6 below.    [Back]

Note 602   See para 11.7 below.    [Back]

Note 603   See paras 11.8-11.11 below.    [Back]

Note 604   See Parts XII-XVII below.    [Back]

Note 605   Throughout this report (see para 3.4 above) "convicted", "conviction" and similar expressions include, unless otherwise indicated, cases in which a summary criminal court is satisfied that the accused has committed the offence charged but grants him an absolute discharge or places him on probation and does not proceed to conviction.    [Back]

Note 606   Customs and Excise Management Act 1979, ss 139-144, as amended. In proceedings for an offence under s 107 of the Copyright, Designs and Patents Act 1988 the court may order the delivery up of infringing copies whether the accused is convicted or not: s 108(3).    [Back]

Note 607   We examined these rules and made recommendations for reform in our Report on Succession (1990) Scot Law Com No 124, paras 7.2-7.27.    [Back]

Note 608   In R v Highbury Corner Stipendiary Magistrates' Court, ex p Di Matteo (1991) 92 Cr App R 263, [1991] 1 WLR 1374 at pp 268, 1379 the court observed that the Powers of Criminal Courts Act 1973, s 43 (as substituted by the Criminal Justice Act 1988, s 69) could serve a dual purpose: the removal of the article from circulation, and part of the punishment of the offender.    [Back]

Note 609   Where the primary object of forfeiture is crime prevention, the value of the property to the offender may be irrelevant: see para 12.4 below.    [Back]

Note 610   It may be, however, that an offender's "working capital", used or intended to be used for the purpose of committing an offence, could be forfeited: Donnelly v HMA 1984 SCCR 93; R v O'Farrell (1988) 10 Cr App R (S) 74, [1988] Crim L R 387. See para 12.17 below.    [Back]

Note 611   See para 10.1 above.    [Back]

Note 612   James v UK (1986) 8 EHRR 123 at p 142. See also Raimondo v Italy noted in para 10.1, third footnote.    [Back]

Note 613    Convention, art 5. See para 10.1 above.    [Back]

Note 614   The history of forfeiture in Scots law is outlined in D Kelly, "Forfeiture" (1991) 59 Scot Law Gaz 7. For examples of specific statutory powers, see para 12.16 below.    [Back]

Note 615   See para 12.16 below.    [Back]

Note 616   Derived from the Criminal Justice Act 1972, s 23(1), (5) and (6).    [Back]

Note 617   Substituted by the Criminal Justice (Scotland) Act 1980, Sched 7, para 71. The original s 436 was derived from the Summary Jurisdiction (Scotland) Act 1954, s 54, which replaced the Summary Jurisdiction (Scotland) Act 1908, s 44.    [Back]

Note 618   New subsections (1A) and (1B) were added by s 37 of the Road Traffic Act 1991: see para 12.14 below.    [Back]

Note 619   Neither section applies where a person is convicted of an offence under the Wireless Telegraphy Act 1949: Telecommunications Act 1984, Sched 3, para 3(b).    [Back]

Note 620   See Part XII below.    [Back]

Note 621   See Part XIV below.    [Back]

Note 622   See Part XV below.    [Back]

Note 623    This recommendation extends to cases where property has been forfeited under a specific power conferred by any other enactment. See Part XVII below.    [Back]

Note 624    See Part XVI below.    [Back]

Note 625    See Part XIII below.    [Back]

Note 626    See Part XII below.    [Back]

Note 627   See para 12.2 below.    [Back]

Note 628   See paras 12.3-12.4 below.    [Back]

Note 629   See paras 12.5-12.20 below.    [Back]

Note 630   See paras 12.21-12.22 below.    [Back]

Note 631   See paras 12.23-12.26 below.    [Back]

Note 632   DP, paras 3.25-3.35, prop 3(c).    [Back]

Note 633   See subs (1), quoted in para 11.6 above.    [Back]

Note 634   R v Cuthbertson [1981] AC 470; R v Khan (1983) 76 Cr App R 29, [1982] 1 WLR 1405, [1982] 3 All ER 969.    [Back]

Note 635   R v Troth (1979) 71 Cr App R 1.    [Back]

Note 636   DP, paras 3.25-3.35, Prop 3(a), (b).    [Back]

Note 637   Under the PT(TP)A a Scottish court may forfeit property wherever situated, including heritable or incorporeal property: ss 13(2)-(4), (7), (8), 20(1) (definition of "property"), Sched 4, para 11(1)(b).    [Back]

Note 638   See para 13.12 and Parts XVI and XVIII below.    [Back]

Note 639   Cf R v Highbury Corner Stipendiary Magistrates' Court ex p Di Matteo (1991) 92 Cr App R 263 at pp 265-266. Where, however, the purpose of the forfeiture is preventative rather than penal, the value of the property to the accused may be irrelevant: see para 11.4 above. The decision in McKenzie v McLeod 1988 GWD 20-864 may be based on this view.    [Back]

Note 640   Criminal Procedure (Scotland) Act 1975, ss 228, 254(3)(b), 442, 453C(1)(b); Renton and Brown, paras 11-47, 16-46, 16-47.    [Back]

Note 641   Inserted by the Criminal Justice Act 1988, s 69(1).    [Back]

Note 642    D A Thomas, "The Criminal Justice Act 1988: the sentencing provisions" [1989] Crim L R 43 at p 51. Hodgson recommended that a court should have power to make a forfeiture order if the value of the property did not exceed the maximum fine for the offence. If the defendant was also fined or ordered to pay compensation, the total of the financial penalties (including the value of any forfeited property) should not exceed the maximum fine for the offence. (Hodgson, pp 101, 154.)    [Back]

Note 643   Convention, art 1c. See para 11.1 above.    [Back]

Note 644   R v Hinde [1977] 64 Cr App R 213.    [Back]

Note 645   R v McFarlane (1982) 4 Cr App R (S) 264.    [Back]

Note 646   Reid v Houston 1992 SCCR 442.    [Back]

Note 647   DP, paras 3.44-3.46.    [Back]

Note 648    DP, para 2.8.    [Back]

Note 649    DP, para 3.47, prop 5.    [Back]

Note 650    See Donnelly v HMA 1984 SCCR 93.    [Back]

Note 651   See para 2.13 above.    [Back]

Note 652   It is derived from the Criminal Justice Act 1972, s 23(1), (5) and (6).    [Back]

Note 653   (1990) 12 Cr App R (S) 238, [1990] 1 WLR 958.    [Back]

Note 654   See Part XVII below.    [Back]

Note 655   s 43(2) of the Powers of Criminal Courts Act 1973 is in similar terms.    [Back]

Note 656   Carruthers v MacKinnon 1986 SCCR 643; Walsh v Taylor-Wilson 1987 GWD 6-182; McDuff v Carmichael 1987 GWD 26-996; McQueeney v Carmichael 1991 SCCR 221; Wallace v MacDougall 1991 SCCR 962; Devine v Carmichael 1991 GWD 40-2465; Hughes v O'Brien 1992 GWD 12-664; Hazley v McLeod 1993 GWD 17-1103; Wilde v Crowe 1993 GWD 27-1697. Cf Simpson v Fraser 1948 JC 1, 1948 SLT 124.    [Back]

Note 657   Mitchell v Scott 1990 GWD 27-1550 (Deer (Scotland) Act 1959, s 25(1)); McLachlan v Buchanan 7 July 1993 (unreported: Crown Office Circular A26/93) (Salmon and Freshwater Fisheries Protection (Scotland) Act 1951, s 7(1), (3)).    [Back]

Note 658   "Any property used or intended to be used, in any manner, wholly or in part, to commit a criminal offence or criminal offences": Convention, art 1c. See para 12.6 above.    [Back]

Note 659   1991 SCCR 321. On the day after Findlay was decided the Divisional Court, considering the equivalent English provision, reached the opposite conclusion in R v Highbury Corner Stipendiary Magistrates' Court, ex p Di Matteo (1991) 92 Cr App R 263, [1991] 1 WLR 1374.    [Back]

Note 660   1993 SCCR 106, 1994 SLT 197.     [Back]

Note 661   DP, paras 3.66-3.68, prop 11.    [Back]

Note 662   HMSO, 1988 ("The North Report").    [Back]

Note 663   1989, Cm 576.    [Back]

Note 664   DP, prop 11(a).    [Back]

Note 665   For the terms of these sections before this amendment see para 11.6 above.    [Back]

Note 666   1975 Act, ss 223(1B), 436(1B).    [Back]

Note 667   The relevant offences, in addition to culpable homicide and the other offences mentioned in the text above, are those under ss 1, 2, 3A, 4(1), 4(2), 5(1)(a), 5(1)(b), 22A, 94A, 103(1)(b) and 178.    [Back]

Note 668   In the course of an investigation into whether he had committed an offence while driving, attempting to drive or being in charge of a vehicle: 1988 Act, s 7.    [Back]

Note 669   1988 Act, s 170(2), (3), (4).    [Back]

Note 670   DP, prop 11(b).    [Back]

Note 671   These are examples of preventative forfeiture: see para 11.4 above.    [Back]

Note 672   eg the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951, s 19 (as amended); the Prevention of Crime Act 1953, s 1(2); the Betting, Gaming and Lotteries Act 1963, s 52(4); the Sea Fish (Conservation) Act 1967, s 11(2), as substituted by the Fisheries Act 1981, s 24(1); the Misuse of Drugs Act 1971, s 27; the Immigration Act 1971, s 25(6); the Contempt of Court Act 1981, s 9(3); the Prevention of Terrorism (Temporary Provisions) Act 1989, s 13.    [Back]

Note 673   See Part XVII below.    [Back]

Note 674   eg Sea Fish (Conservation) Act 1967, s 11(2)(a), (b), (d), (e) as substituted by the Fisheries Act 1981, s 24(1).    [Back]

Note 675   eg s 27(1) of the Misuse of Drugs Act 1971 is wider in that it permits forfeiture of "anything shown to the satisfaction of the court to relate to [not "to have been used or intended to be used for the purpose of committing or facilitating the commission of"] the offence", but narrower in that the forfeiture of anything related to some other offence or intended offence is forbidden.    [Back]

Note 676   DP, paras 3.36-3.40, 3.43, prop 4(a).    [Back]

Note 677   1984 SCCR 93.    [Back]

Note 678   A similar view was expressed in R v O'Farrell (1988) 10 Cr App R (S) 74, [1988] Crim L R 387. While section 27(1) permits only the forfeiture of anything shown to relate to the offence of which the accused was convicted, s 223(1)(b) permits the forfeiture of any property intended by the convicted person to be used for the purpose of committing any offence.    [Back]

Note 679   1989 SCCR 368.    [Back]

Note 680   As substituted by the Telecommunications Act 1984, s 82.    [Back]

Note 681   Renton and Brown, para 17-44.    [Back]

Note 682   DP, paras 3.41-3.43, prop 4(b).    [Back]

Note 683   C G B Nicholson, Sentencing (2nd ed, 1992), para 6-04.    [Back]

Note 684   In England and Wales the court may make a deprivation order under s 43 of the Powers of Criminal Courts Act 1973 without regard to any restrictions on forfeiture in an enactment passed before the Criminal Justice Act 1988 (1973 Act, s43(1) as substituted by the 1988 Act, s 69(1)).    [Back]

Note 685   See paras 14.7-14.8 below.    [Back]

Note 686   See Part XVII below.    [Back]

Note 687   Criminal Procedure (Scotland) Act 1975, s 311(5); Act of Adjournal (Consolidation) 1988, r 87(2), Sched 1, Form 46.    [Back]

Note 688   Duffy v Lakie 1962 SLT 30, applying Coogans v MacDonald 1954 JC 98, 1954 SLT 279.    [Back]

Note 689   1991 SCCR 321.    [Back]

Note 690   DP, paras 3.55-3.62, prop 8.    [Back]

Note 691   Coogans v MacDonald 1954 JC 98, L J-G Cooper at pp 103-104.    [Back]

Note 692   Some forfeitures may be preventative rather than punitive (see paras 11.4 above, 12.24 below); and the forfeiture of property belonging to a third party does not penalise the accused.    [Back]

Note 693   The exercise of the general power would be excluded in certain cases: see para 12.13, recommendation 64, and para 12.20, recommendation 67 above.    [Back]

Note 694   1991 SCCR 321. See para 12.21 above.    [Back]

Note 695   See para 11.6 above.    [Back]

Note 696   The Firearms Act 1968, s 52(1)(c) confers a specific power to forfeit on making a probation order. The Civic Government (Scotland) Act 1982, s 58(3), confers a specific power to forfeit on granting an absolute discharge or making a probation order in relation to a person in respect of a contravention of s 58(1) of that Act. In Wilson v Houston 1988 GWD 13-566 the forfeiture order seems to have been approvedper incuriam.    [Back]

Note 697   1975 Act, ss 383 (absolute discharge), 384(1) (probation).    [Back]

Note 698   1975 Act, ss 182 (absolute discharge), 183(1) (probation).    [Back]

Note 699   See para 11.6 above, fourth footnote.    [Back]

Note 700   DP, paras 2.7, 3.52-3.54, prop 7. A forfeiture order may be combined with a deferred sentence: Devine v Carmichael 1991 GWD 40-2465.    [Back]

Note 701   1975 Act, ss 182, 383.    [Back]

Note 702   R v Hunt [1978] Crim L R 697; R v Savage (1983) 5 Cr App R (S) 216.    [Back]

Note 703   See para 11.4 above.    [Back]

Note 704   eg police officers see A committing a technical offence and find that he has in his possession equipment lent to him by B after B had used it to break into a house.    [Back]

Note 705   In England and Wales s 43(1) of the Powers of Criminal Courts Act 1973, as originally enacted, limited the power to cases in which the offender was convicted of an offence punishable on indictment by at least two years' imprisonment. The current s 43(1), substituted by s 69(1) of the Criminal Justice Act 1988, contains no restriction on the type of offence to which it may apply.    [Back]

Note 706   See para 13.6 below.    [Back]

Note 707   See para 13.2 below.    [Back]

Note 708   See paras 13.3-13.5 below.    [Back]

Note 709   See paras 13.7-13.9 below    [Back]

Note 710   See para 13.10 below.    [Back]

Note 711   See para 13.11 below.    [Back]

Note 712   See para 13.12 below.    [Back]

Note 713   See paras 13.13-13.16 below.    [Back]

Note 714   See para 13.17 below.    [Back]

Note 715   See para 6.4 above.    [Back]

Note 716   On the need for precision when framing an application or order, see para 13.10 below.    [Back]

Note 717   eg where the accused is unrepresented.    [Back]

Note 718   In England and Wales the prosecution have this duty in relation to deprivation orders: R v Pemberton (1982) 4 Cr App R (S) 328, [1983] Crim L R 121.    [Back]

Note 719   See paras 6.3-6.5 above.    [Back]

Note 720   See paras 6.5, 6.13, 7.17 above.    [Back]

Note 721   See para 12.4 above.    [Back]

Note 722   DP, para 3.48; 17 Stair Memorial Encyclopaedia para 807.    [Back]

Note 723   eg the Betting, Gaming and Lotteries Act 1963, s 52(4). In Shandon Supply Co Ltd v MacLeod 21 October 1965 (unreported: Crown Office Circular A6/65) an order for the forfeiture and destruction of a gaming machine was suspended on the ground that it had not been produced to the court in terms of s 52(4).    [Back]

Note 724   Where such a production is forfeited, the label lodged in lieu of it is handed to the clerk of court.    [Back]

Note 725   Hereafter we use the expression "the clerk of court" to mean the Clerk of Justiciary or the sheriff clerk.    [Back]

Note 726   DP, para 3.51, prop 6.    [Back]

Note 727   We discuss warrants and restraint orders in Part XVI.    [Back]

Note 728   He could, alternatively, apply for a restraint order: see Part XVI.    [Back]

Note 729   See para 13.9, recommendation 74 below. Ss 224 and 437 of the 1975 Act provide that where a court has made an order for the forfeiture of an article, the court or any justice may issue a search warrant if satisfied by information on oath that there is reasonable cause to believe that the article is to be found in any place or premises and that admission thereto has been refused or a refusal of admission is apprehended.    [Back]

Note 730   DP, para 3.51, prop 6(b).    [Back]

Note 731   See para 13.7 above.    [Back]

Note 732   (1901) 3 Adam 483.    [Back]

Note 733   DP, para 3.63, prop 9.    [Back]

Note 734   As substituted by the Fisheries Act 1981, s 24(1).    [Back]

Note 735   See para 13.2 above.    [Back]

Note 736   Moveable property either will have been produced to the sheriff clerk or will be the subject of a warrant for search and seizure.    [Back]

Note 737   The test of "reasonable suspicion" is not intended to be rigorous. "Suspicion in its ordinary meaning is a state of conjecture or surmise where proof is lacking: 'I suspect but I cannot prove'." (Hussien v Chong Fook Kam [1970] AC 942 per Lord Devlin at p 948.)    [Back]

Note 738   If, of course, the prosecutor is satisfied that the property has an innocent owner he will not have applied for a suspended forfeiture order and the property will be released under the normal arrangements for productions.    [Back]

Note 739   The Commissioners of Customs and Excise are required to give notice of the seizure of any thing as liable to forfeiture and of the grounds thereof to any person who to their knowledge was at the time of the seizure the owner or one of the owners thereof: Customs and Excise Management Act 1979, Sched 3, paras 1, 2, as amended by the Isle of Man Act 1979, Sched 1, para 23.    [Back]

Note 740   See Part XV below.    [Back]

Note 741   See Part XVII below.    [Back]

Note 742   See paras 13.12, 16.9-16.12 below.    [Back]

Note 743   See paras 15.2, 15.12 below.    [Back]

Note 744   See para 13.17, recommendation 82 below.    [Back]

Note 745   A compensation order may be made in respect of any personal injury, loss or damage caused directly or indirectly by the acts which constituted the offence: Criminal Justice (Scotland) Act 1980, s 58. See Renton and Brown, paras 17-38 to 17-43.    [Back]

Note 746   DP, paras 2.12-2.14, 3.19-3.24, prop 2(a).    [Back]

Note 747   For the complete text see para 11.6 above.    [Back]

Note 748   R v Kingston-upon-Hull Justices, ex p Hartung (1981) 72 Cr App R 26; R v Thibeault (1983) 76 Cr App R 201.    [Back]

Note 749   By s 107 of the Criminal Justice Act 1988.    [Back]

Note 750   Compensation for Victims of Crime (1988), recommendation 11, cit DP, para 3.19.    [Back]

Note 751   D A Thomas, "The Criminal Justice Act 1988: the sentencing provisions" [1989] Crim L R 43 at p 52.    [Back]

Note 752   See para 11.4 above.    [Back]

Note 753   See para 2.16 above, first footnote.    [Back]

Note 754   While it would be competent to combine a suspended forfeiture order with a probation order or an absolute discharge in terms of our recommendation 70 above, it remains incompetent to combine a compensation order with an absolute discharge, a deferred sentence or a probation order: see the Criminal Justice (Scotland) Act 1980, s 58(1). A compensationrequirement, however, may be included in a probation order: Criminal Procedure (Scotland) Act 1975, ss 183(5B), 384(5B) as inserted by the Criminal Justice (Scotland) Act 1987, s 65.    [Back]

Note 755   Convention, art 5. See paras 10.1 above, 17.1 below.    [Back]

Note 756   See Part XVII below.    [Back]

Note 757   See Part XIV below.    [Back]

Note 758   See Part XV below.    [Back]

Note 759    Criminal Procedure (Scotland) Act 1975, s 442(1)(b)(ii).    [Back]

Note 760    S 42 amends the Criminal Procedure (Scotland) Act 1975 by adding a new s 228A and inserting further provisions in s 442. Ss 228A and 442 have since been amended by s 68 of the Criminal Justice Act 1993. Under s 228A as amended the Lord Advocate may appeal against a sentence or other disposal in solemn procedure on the ground of undue leniency or on a point of law. Under s 442 as amended the prosecutor may appeal in summary procedure on the ground of undue leniency in any class of case specified by order by the Secretary of State. No such orders have been made.    [Back]

Note 761    See para 14.7 below.    [Back]

Note 762   See paras 14.2-14.6 below.    [Back]

Note 763   See paras 14.7-14.8 below.    [Back]

Note 764   See para 14.9 below.    [Back]

Note 765   See para 14.10 below.    [Back]

Note 766   DP, paras 3.10, 3.18, prop 1(b).    [Back]

Note 767   See para 13.11 and recommendations 75 and 77 above.    [Back]

Note 768   For the purposes of enforcement outside Scotland the statutory period could be varied by Order in Council: see draft Bill, clauses 33(4), 34(3).    [Back]

Note 769   See Part XV below.    [Back]

Note 770   See para 13.17, recommendation 81 above.    [Back]

Note 771   The forfeiture of such articles may be regarded as preventative rather than penal: see para 11.4 above.    [Back]

Note 772   It would be for the clerk of court to select the means of disposal of the articles in these categories, as of any other forfeited property (see para 14.10 below).     [Back]

Note 773   Stark and Smith v HMA 1938 JC 170, L J-G Normand at p 173.    [Back]

Note 774   See paras 13.8, 13.9, recommendation 73 above.    [Back]

Note 775   See Part XV below.    [Back]

Note 776   See para 14.10 below.    [Back]

Note 777    For the terms of these provisions, see para 11.6 above.    [Back]

Note 778   See paras 13.13-13.16, recommendation 79 above.    [Back]

Note 779   See para 14.4 above.    [Back]

Note 780   See para 13.11, recommendation 75 above.    [Back]

Note 781   See para 13.11, recommendation 76 above.    [Back]

Note 782   See para 13.12, recommendation 78 above.    [Back]

Note 783   See para 13.11, recommendation 77 above.    [Back]

Note 784    For the sake of brevity, "owner" in the following paragraphs includes a person with an interest in the property.    [Back]

Note 785   See para 14.5, recommendation 83(3) above.    [Back]

Note 786   See para 10.1 above.    [Back]

Note 787   Powers of Criminal Courts Act 1973, s 43(4)(b).    [Back]

Note 788   Hodgson, p 124.    [Back]

Note 789   Ibid, p 124.    [Back]

Note 790   It would of course be possible for the accused to sell lawfully to an optimistic purchaser an item of property which the latter knew was in the hands of the police.    [Back]

Note 791   See para 13.4 above.    [Back]

Note 792   Unless the third party was a co-accused who had been acquitted. Even so, however, the issues at the trial and the hearing might not be the same.    [Back]

Note 793   See para 15.6 above.    [Back]

Note 794   See para 12.4 above.    [Back]

Note 795   See para 11.4 above.    [Back]

Note 796   DP para 3.16, prop 1(c).     [Back]

Note 797   See para 10.1 above.    [Back]

Note 798   ie ss 230-280A.    [Back]

Note 799   The relevant provisions would be ss 453B and 453C.    [Back]

Note 800   See para 13.17, recommendation 82 above.    [Back]

Note 801   On this Convention see paras 2.8, 11.1 above.    [Back]

Note 802   Art 2.1, so far as relevant to forfeiture, is quoted in para 11.1 above.    [Back]

Note 803   For the Convention's definition of "confiscation", which includes the forfeiture of property in the sense in which that expression is used in our reference, see paras 11.1, 11.3 above.    [Back]

Note 804   See para 16.4 below.    [Back]

Note 805    See paras 16.5-16.8 below.    [Back]

Note 806   See paras 16.9-16.12 below.    [Back]

Note 807   Both sections are derived from the Criminal Justice (Scotland) Act 1963, s 34.    [Back]

Note 808   See paras 13.8, 13.9, recommendation 74 above.    [Back]

Note 809   (1878) 4 Coup 20.    [Back]

Note 810   T Trotter, Summary Criminal Jurisdiction According to the Law of Scotland (1936), p 263; C G B Nicholson, Sentencing (2nd ed, 1992), p 97, para 6-05.    [Back]

Note 811   DP, para 3.64. Cf Malone v Metropolitan Police Commissioner [1980] QB 49.    [Back]

Note 812   DP, para 3.65, prop 10.    [Back]

Note 813   1987 Act, s 10. See para 9.31 above.    [Back]

Note 814   For "the institution of proceedings" see para 9.16 above.    [Back]

Note 815   PT(TP)A, Sched 4, paras 13-16. A new para 16 is substituted by the draft Bill, Sched 4, para 12.    [Back]

Note 816   See para 9.10 above.    [Back]

Note 817   For the definition of "the institution of proceedings" see para 9.16 above. The circumstances in which proceedings are taken to have been concluded are the same as in para 9.17,mutatis mutandis: see draft Bill, cl 23(6).    [Back]

Note 818   See the discussion in paras 9.21-9.22 above.    [Back]

Note 819   See para 9.25 above.    [Back]

Note 820   See para 9.26 above.    [Back]

Note 821   See para 9.29 above.    [Back]

Note 822   See para 9.31 above.    [Back]

Note 823   See paras 9.32-9.37 above.    [Back]

Note 824   See paras 9.42-9.46 above.    [Back]

Note 825   See para 10.1 above.    [Back]

Note 826   Semple and Sons v MacDonald 1963 JC 90, 1963 SLT 295 (on the Wireless Telegraphy Act 1949, s 14(3)).    [Back]

Note 827   Misuse of Drugs Act 1971, s 27(2); Immigration Act 1971, s 25(8); Forgery and Counterfeiting Act 1981, s 24(4); Contempt of Court Act 1981, s 9(3); Prevention of Terrorism (Temporary Provisions) Act 1989, s 13(6). None of these Acts gives the third party a right to notice of an application for forfeiture.     [Back]

Note 828   See para 11.6 above.    [Back]

Note 829   1974 JC 24 at p 27, commenting on the Criminal Justice Act 1972, s 23(5).    [Back]

Note 830   DP, para 3.11.    [Back]

Note 831   As in Loch Lomond Sailings Ltd v Hawthorn 1962 JC 8.    [Back]

Note 832   Loch Lomond Sailings Ltd,supra;Semple and Sons,supra.    [Back]

Note 833   Lloyds and Scottish Finance Ltd,supra.    [Back]

Note 834   See paras 14.1-14.8, recommendations 84, 85 above.    [Back]

Note 835   See para 13.11, recommendations 76-78 above.    [Back]

Note 836   See para 15.2, recommendation 88 above.    [Back]

Note 837   See paras 16.10, 16.12, recommendation 96 above.    [Back]

Note 838   See paras 15.3-15.10, 15.13, 16.10, 16.12 above.    [Back]

Note 839   See second footnote to para 10.3 above.    [Back]

Note 840   See paras 17.5-17.10 below.    [Back]

Note 841   See paras 4.15-4.19 above.    [Back]

Note 842   See para 17.2 above.    [Back]

Note 843   Cf Companies Act 1985, s 655: where a company is revived after dissolution it is entitled to compensation from the Crown where the Crown has disposed of property vested in it asbona vacantia.    [Back]

Note 844   We have recommended a three-year time-limit for applications for compensation relative to confiscation proceedings: see para 10.7(ii) above.    [Back]

Note 845   See paras 15.3-15.10 above.    [Back]

Note 846   Not the net proceeds of sale, as in Lloyds and Scottish Finance Ltd v HMA 1974 JC 24, 1974 SLT 3, and in s 72(3) and (4) of the Civic Government (Scotland) Act 1982 (compensation payable to owner of lost property which has been disposed of for value by the chief constable under s 68). Since the property has been sold through no fault of the applicant, he should not have to bear the expenses of the sale.    [Back]

Note 847   See footnote to para 17.5 above.    [Back]

Note 848   See para 15.11, recommendation 91 above.    [Back]

Note 849   See paras 15.2, 16.10.    [Back]

Note 850   On "reasonable suspicion" see second footnote to para 13.11 above.    [Back]

Note 851   See para 15.13, recommendation 92 above.    [Back]

Note 852   See paras 4.15-4.19 above.    [Back]

Note 853   Ie Chapter III of the Convention, entitled "International Co-operation".    [Back]

Note 854   Ie "any property used or intended to be used, in any manner, wholly or in part, to commit a criminal offence or criminal offences": Convention, art 1.c.    [Back]

Note 855   Inserted by CJ(S)A, s 31; a new s 24A(6) was substituted by the Criminal Justice Act 1993, s 21(2) (now in force).    [Back]

Note 856   The Drug Trafficking Offences (Enforcement in England and Wales) Order 1988 (SI 1988 No 593) was made under the powers conferred by s 24A.    [Back]

Note 857   In particular, the restatement of s 92 (inhibition and arrestment of property in Scotland) should take account of the recommendations in paras 9.33-9.37 of this Report.    [Back]

Note 858   The Criminal Justice Act 1993 inserted a new s 29(3A) (by s 22(2)) and substituted a new s 29(4) (by s 21(3)(c)). Ss 21 and 22 of the 1993 Act came into force on 1 December 1993 (SI 1993/2734).    [Back]

Note 859   NI(EP)A, Sched 4, para 19 as amended by the Criminal Justice Act 1993, s 46.    [Back]

Note 860   The Criminal Justice Act 1993 inserted a new s 95(2A) (by s 34(2)) and substituted a new s 95(3) (by s 21(3)(f)). S 34 of the 1993 Act also came into force on 1 December 1993 (SI 1993/2734).    [Back]

Note 861   See para 18.4, recommendation 108 above.    [Back]

Note 862   SI 1990 No 2588 (NI 17), art 26.    [Back]

Note 863   Substituted by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, s 63. A new s 30(5) was substituted by the Criminal Justice Act 1993, s 21(3)(d).    [Back]

Note 864   CJ(S)A, s 30(2) as substituted.    [Back]

Note 865   Substituted by the CJA, s 103(1), Sched 5, para 15. A new s 26(5) was substituted by the Criminal Justice Act 1993, s 21(3)(b).    [Back]

Note 866   A new s 96(5) was substituted by the Criminal Justice Act 1993, s 21(3)(g).    [Back]

Note 867   See the Confiscation of the Proceeds of Drug Trafficking (Designated Countries and Territories (Scotland)) Order 1991 (SI 1991 No 1467, amended by SI 1992 No 1733, SI 1993 No 1806 and SI 1993 No 3156); the Drug Trafficking Offences Act 1986 (Designated Countries and Territories) Order 1990 (SI 1990 No 1199, amended by SI 1991 No 1465); the Criminal Justice Act 1988 (Designated Countries and Territories) Order 1991 (SI 1991 No 2873, amended by SI 1993 No 1790). In In re JL (The Times, 4 May 1994) Judge J held that DTOA, s 38(11) as modified by SI 1990 No 1199, which corresponds to CJ(S)A, s 47(5) as modified by SI 1991 No 1467, conferred on the High Court jurisdiction to make a restraint order restraining access to funds held in London notwithstanding that the proceedings in the designated foreign country were civil proceedingsin rem. On procedure in England under SI 1990 No 1199 and SI 1991 No 2873 see A Bolt, "Practical problems in mutual assistance in criminal matters" (1993) 19 Commonwealth Law Bulletin 1911 at pp 1915-1916.    [Back]

Note 868   See para 18.1 above.    [Back]

Note 869   See para 18.7 above.    [Back]

Note 870   Interpretation Act 1978, s 17(2)(a).    [Back]

Note 871   See para 18.3, recommendation 106 above.    [Back]

Note 872   PT(TP)A, Sched 4, Pt III, paras 28, 29.    [Back]

Note 873   See para 18.6, recommendation 110 above.    [Back]

Note 874   PT(TP)A, Sched 4, para 20.    [Back]

Note 875   1990 Act, s 9 as amended by the Criminal Justice Act 1993, s 21(1), (3)(h) (now in force).    [Back]

Note 876   SI 1991 No 1468, amended by SI 1992 No 1734, SI 1993 No 1807 and SI 1993 No 3155.    [Back]

Note 877   See para 18.10, recommendation 113 above.    [Back]

Note 878   See paras 18.11-18.13, recommendations 114, 115 above.    [Back]

Note 879   If the offender dies, absconds or becomes mentally or physically incapable after a confiscation order is made the order is nevertheless enforceable, at least in theory.    [Back]

Note 880   See para 19.4 below.    [Back]

Note 881   For the meaning of "the institution of proceedings" see para 9.16 above and the draft Bill, cl 38(3).    [Back]

Note 882   Proceeds of Crime Act 1987 (No 87 of 1987), ss 5(1)(d), 6, 14(1), 17.    [Back]

Note 883   Proceeds of Crime Act 1991 (1991, No 120), ss 2(1), 3(1)(c), 4, 13.    [Back]

Note 884   A large category of offences including corruption of public officers, fraud, counterfeiting and possession of the proceeds of drug trafficking.    [Back]

Note 885   Criminal Code, ss 462.3, 462.38, inserted by the Act to amend the Criminal Code, the Food and Drugs Act and the Narcotic Control Act 1988, c 51 (Revised Statutes of Canada 1985, c 42 (4th Supp)), s 2.    [Back]

Note 886   Report on the DTOA (1991), paras 5.3-5.9.    [Back]

Note 887   DTOA, s 4A inserted by s 14(1) of the 1993 Act (not yet in force, 1 May 1994). Ss 42 and 43 of the 1993 Act (also not yet in force) insert similar provisions in the NI(EP)A.    [Back]

Note 888   If he has absconded and has not been known to be alive for seven years he may be presumed dead: Presumption of Death (Scotland) Act 1977, s 1(1).    [Back]

Note 889   See paras 10.4-10.9 above.    [Back]

Note 890   Cf DTOA, ss 4A, 4B, 19A-19C, inserted by the Criminal Justice Act 1993, ss 14, 15 (not yet in force, 1 May 1994).    [Back]

Note 891   See para 14.10, recommendation 86, above.    [Back]

Note 892   The Court should be entitled to permit any amendment of the application which does not change the character of the offence with which the deceased had been charged in the proceedings: cf Criminal Procedure (Scotland) Act 1975, ss 123(3), 335(2).    [Back]

Note 893   See paras 6.5, 6.13 above.    [Back]

Note 894   First Protocol, art 1, cit para 10.1 above.    [Back]

Note 895   This proposal follows the general rule as to convictions as evidence in civil proceedings (Law Reform (Miscellaneous Provisions) (Scotland) Act 1968, s 10) rather than the rule in defamation actions that a conviction is conclusive evidence of the commission of an offence (same Act, s 12).    [Back]

Note 896   King v Patterson 1971 SLT (Notes) 40; Hunter v Chief Constable of the West Midlands Police [1982] AC 529 per Lord Diplock at p 544.    [Back]

Note 897   Hunter,supra. See also Cross on Evidence (7th edn, 1990 ed C Tapper), p 103.    [Back]

Note 898   Civil Evidence (Scotland) Act 1988, ss 1-4, 9.    [Back]

Note 899   Proceeds of Crime Act 1987, s 17.    [Back]

Note 900   10 Stair Memorial Encyclopaedia para 711.    [Back]

Note 901   See paras 4.2-4.7 above.    [Back]

Note 902   See paras 6.6-6.10 above.    [Back]

Note 903   In an application under the DTOA, s 4A (see para 19.4 above) the required assumptions may not be made (s 4A(6)(a)). In Canada, however, the court may infer that property was obtained as a result of the commission of the offence where the accused's income cannot reasonably account for an increase in the value of his property thereafter: Criminal Code (cit para 19.4 above), s 462.39    [Back]

Note 904   See paras 4.29, 4.30, recommendation 19(2); paras 9.27, 9.28, recommendation 51(2).    [Back]

Note 905   See paras 7.8, 7.9, recommendation 37(2); paras 7.17, 7.18, recommendation 42(2).    [Back]

Note 906   See para 9.17 above.    [Back]

Note 907   Draft Bill, cl 25(7); paras 9.34-9.36 above.    [Back]

Note 908   Draft Bill, cl 26; para 9.32 above.    [Back]

Note 909   Draft Bill, cl 25; paras 9.34-9.36 above.    [Back]

Note 910   See Parts X, XVII above.    [Back]

Note 911   See paras 19.10, 19.17, recommendation 121(2) above.    [Back]

Note 912   See paras 17.5-17.7 above; draft Bill, cl 19.    [Back]

Note 913   See para 19.5 above.    [Back]

Note 914   Australia, No 87 of 1987; New Zealand, 1991, No 120.    [Back]

Note 915   See para 2.12 above.    [Back]

Note 916   See para 2.12, footnote.    [Back]

Note 917   For a discussion of Keeling Schedules see F A R Bennion, Statute Law (3rd ed, 1990), pp 51-52; The Preparation of Legislation (1975 Cmnd 6053), paras 13.21, 13.22.    [Back]

Note 918   See 1982 Act, ss 16(2)(b) and 20(4)(a). Schedules 4 and 8 are not Keeling Schedules.    [Back]

Note 919   The Preparation of Legislation (above), para 13.22.    [Back]

Note 920   Draft Bill, cl 38(2); CJ(S)A, s 47(2).    [Back]

Note 921   Draft Bill, cll 38(4), 39(3); Sched 3, para 32 (amending CJ(S)A, s 47).    [Back]

Note 922   See para 3.4 above.    [Back]

Note 923   Welch v UK 12 February 1993, 15 October 1993. The Commission has referred the case to the European Court of Human Rights: (1994) 5 Human Rights Case Digest 44.    [Back]

Note 924   See paras 2.14-2.17 above.    [Back]

Note 925   eg applications under cll 4(5), 8(1), 9(1), 10(1), 16(1), 18(1), (5), (6), 19(1), 36(3).    [Back]

Note 926   Criminal Procedure (Scotland) Act 1975, ss 282, 457.    [Back]

Note 927   Court of Session Act 1988, s 5; Sheriff Courts (Scotland) Act 1971, s 32. Cf Rules of Court 1965, chap IV, s 2A, rules 201C-201R (causes under the CJ(S)A); s 8D, rules 249S-249Y (reciprocal enforcement of orders in relation to confiscation of proceeds of crime).    [Back]

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You are here: BAILII >> Databases >> Scottish Law Commission >> Scottish Law Commission (Reports) >> Confiscation and Forfeiture [1994] SLC 147 (Report) (June 1994) URL: http://www.bailii.org/scot/other/SLC/Report/1994/147.html Cite as: [1994] SLC 147 (Report)