Clause 245 - General purpose of this Part

Proceeds of Crime Bill – in a Public Bill Committee am 4:30 pm ar 11 Rhagfyr 2001.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs) 4:30, 11 Rhagfyr 2001

I beg to move amendment No. 365, in page 145, line 8, after 'property', insert

'to the value at least £10,000'.

We now come to a completely new part of the Bill, which contains some of its most important and novel provisions—those for civil recovery of the proceeds of unlawful conduct. We shall have to consider many issues on part 5. The Opposition support the Government in introducing the principle of civil recovery, which will allow the enforcement agency to bring proceedings to recover the proceeds of unlawful conduct. In many ways, ironically enough, I am more comfortable with some of the concepts underlying civil recovery than with, for example, the assumptions that underlie some of the confiscatory regime.

Civil recovery allows for a procedure that is fairly well tried and tested. I hope that the courts, with their long experience of civil litigation, will not have too much trouble in applying rules that do justice in cases of this kind. That said, as we consider this part, we shall express concerns about the extent to which the rules are being changed to create something more novel than the ordinary civil recovery system.

The clause spells out the general purposes of part 5. Subsection 1(a) says that it enables

''the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct''.

That brings us to the amendment, which is important and allows us to consider whether we should introduce a de minimis rule about the quantity of assets that should be aimed at in civil recovery proceedings. It would limit that quantity to sums of more than £10,000.

The Government, in introducing the Bill, have shown that they are keen to attack criminals of all classes and kinds. That includes not just drug barons living in palatial mansions in the home counties, but the smaller-scale criminal who lives off the proceeds of crime but has far fewer assets. Nevertheless, the Committee should carefully consider whether there is any desire to pursue people whose suspected benefits from unlawful conduct may be very small. Substantial costs will be associated with bringing those proceedings. In many cases, I suspect that the costs will not necessarily be recoverable from the person against whom proceedings were brought, by the time they have been cleaned out, although it is possible that the assets recovered will at least equal the costs. Costs of £10,000 are run up quickly in civil litigation, as I am sure that the Under-Secretary is only too aware in connection with the costs of litigation conducted through the Treasury solicitor when people bring actions for assaults in prison, and with other burdens for which Home Office Ministers have to cater. In that context, £10,000 is peanuts.

I stress to the Minister that £10,000 is a de minimis figure. Although it may sound like a lot of money, it is very little in comparison with litigation costs. I wonder whether introducing such a figure might have two merits. First, it would protect the Assets Recovery Agency, which would not have to worry about recovering small amounts of money under civil proceedings. The agency would know at the outset, notwithstanding possible public pressure, that the amount that would eventually be recovered would not be outweighed by the costs of doing so.

Photo of Tom Harris Tom Harris Llafur, Glasgow Cathcart

Does the hon. Gentleman not accept that given the existing wording, subsection (1)(a) enables rather than compels the authority to proceed with civil recovery? Surely that should be left to the discretion of the authority. The authority would not be obliged to pursue sums of less than £10,000.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

The hon. Gentleman is right. There will be a discretionary remedy for the authority, and, as we shall argue later, we hope that the authority will exercise its discretion. The authority is being given a fairly novel and potentially draconian power to bring civil proceedings against people who may never have been convicted of an offence. Clearly, one would not expect it to waste time and money trying to recover assets that would be insufficient to meet the costs of the recovery process. However, if the hon. Gentleman will bear with me, I shall go on to explain there are two issues to consider.

First, if the authority comes under pressure, a de minimis provision will allow it more easily to say that whatever the circumstances, the assets available will be totally insufficient. Secondly—this is an important question: should individuals whose assets allegedly obtained through unlawful conduct are less than £10,000 in value be pursued at all, even if the agency is minded to pursue them? Given the novel nature of the power, and the civil remedy or civil litigation procedure whereby there is not an aggrieved party but

the state seeks to recover certain types of assets, there is a good argument that a £10,000 cut-off point would be appropriate. I am open to suggestions. Even in civil litigation nowadays, there is a de minimis cut-off point. One cannot go to the county court and issue proceedings for the £10 that one is owed. I am not sure of the position in Scotland, but one certainly cannot do that in England or Wales.

It is therefore accepted that there is a point at which the court should not be seized of or bothered with very small sums of money. I accept that hon. Members may argue that there might be circumstances in which somebody who is identified as having less than £10,000 of assets through unlawful conduct should be pursued. However, it is worth bearing in mind that we are dealing with a civil procedure, so the likelihood is that we will not be dealing with convicted criminals. We may well be dealing with people with unblemished reputations.

The Committee should also bear in mind the extent to which civil proceedings of that type could be exceptionally damaging to the reputation of the accused individual, even if they were to win the case. Proceedings are brought against someone by a very powerful authority, which effectively brands them as a criminal, because they are living off assets obtained through unlawful conduct. The proceedings will be public, and will probably attract a great deal of publicity. There may be occasions when individuals who are dragged through this process, and who have never had a criminal conviction, find that not a single asset is seized, and they are exonerated. However, in the meantime, enormous damage might have been done to their reputation.

If the high point of the agency's case is that it believes that less than £10,000 of an individual's assets has been obtained by unlawful conduct, is it reasonable that that person—who, as I have said, will probably never have been convicted of a criminal offence—should be put through such a process? That issue must be addressed now, and it will also arise in subsequent examinations of this part of the Bill. I have anxieties about the extent to which individuals might be badly damaged, although they were subsequently exonerated, and the fact that they might never recover from that damage.

Photo of Tom Harris Tom Harris Llafur, Glasgow Cathcart

The hon. Gentleman seems to be making a case for never taking to court anyone who might be found not guilty. Everyone who is taken to court, even in a criminal case, has the right to prove themselves innocent, although they will have to go through the inevitable questioning.

The hon. Gentleman described the £10,000 limit as peanuts. However, if the recovery agency takes 50 or 100 per cent. of the ill-gotten gains, that is what is important, rather than the actual figure on paper. Similarly, when £1 million is taken from a big criminal, if that represents only 20 per cent. of his ill-gotten gains, it might be less of a blow to him than taking £8,000 would be to a smaller criminal.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I take on board the hon. Gentleman's point, but it does not alter my argument, which is that this is an unusual remedy—because it is not a remedy at all, because nobody has done anything against the party that is bringing the action. That party is bringing the action in the name of public policy, on the basis that it is wrong that an individual should have assets that have been obtained through unlawful conduct.

There will be a civil test, so there will be civil proceedings. During the course of them, it is likely that an individual's finances and personal life will be trawled through. There is the capacity for a great deal of damage to be done. If the individual concerned is found to have substantial assets as a result of unlawful conduct, that is his problem, and few people are likely to have any sympathy for him. However, I wonder how public perceptions might change if it were felt that an individual was being hounded, because they were being put through a process that was extremely difficult for them, when it was clear throughout the unfolding of the proceedings that the maximum value of the assets being targeted for recovery was rather small. There is a danger that at that point, allegations of unfairness might be made. I am sure that the Minister wants to avoid that, because for the procedure to command acceptance and be approved, people want to see it working and taking money away from those who are manifestly criminal, or who at least behaved unlawfully and benefited from that conduct.

Photo of Mark Lazarowicz Mark Lazarowicz Labour/Co-operative, Edinburgh North and Leith 4:45, 11 Rhagfyr 2001

I understand why the hon. Gentleman has problems with the existing wording and wants a de minimis provision. However, there is a difficulty in including such a provision rather than leaving things to the enforcement authority. One can easily envisage a situation in which a drug dealer—that is the category that we have considered—comes here from another country and boasts that he or she has gained assets from illicit activities. Would it be an affront to the public if there were no way of proceeding against that person for sums that might be less than £10,000 but could be substantial—£8,000 or £9,000, say? How would the hon. Gentleman explain to people in this country that somebody who flaunted those ill-gotten gains from another country could not be proceeded against, as would be the case if the de minimis provision that he suggests were included?

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I take the hon. Gentleman's point. The matter could be dealt with not by an amendment but by an assurance from the Minister that consideration will be given to a de minimis provision, and that rules and guidelines will be published accordingly—but as the hon. Gentleman knows, I am always slightly reluctant to give discretion to the Executive if Parliament can identify something better.

I have no idea how many people in the United Kingdom have obtained £10,000 by unlawful conduct—that is a broad term—during their lives. I hope that there are not too many. I have a horrible feeling that if we include certain categories of potential offence, the number may be rather large. I do not

believe in criminality or approving of criminality, so I agree with the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) that there may be public policy reasons why there should be no bottom limit. However, £10,000 does not go very far. If a person is running around the streets flaunting £10,000 of assets as ill-gotten gains, people down the pub may not think much of him. I do not see such an individual as a criminal leader in his community.

Photo of Tom Harris Tom Harris Llafur, Glasgow Cathcart

I assure the hon. Gentleman that any person who flaunted £10,000 in my constituency—or almost any other Glasgow constituency—would not be seen as having peanuts. I suspect that very few people in Pollok, Anniesland or Cathcart have that amount in their bank account.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I note the hon. Gentleman's comments, and I accept that £10,000 may appear to be a greater or lesser sum depending on where a person lives. However, even from the descriptions given by the hon. Member for Glasgow, Pollok (Mr. Davidson) of the criminal on the block in his community, I got the distinct impression that if such individuals had made only £10,000, they would not have been very successful. I am sorry to say that the hon. Gentleman is not here at the moment, but his description of the criminal lifestyle of a person in his constituency did not strike me as referring to a person who had made £10,000 by unlawful conduct, but to one who had made considerably more.

If the Under-Secretary does not like the figure of £10,000, I am open—as I am sure are other members of the Committee—to discussing another de minimis provision. I proposed the sum of £10,000 because I thought it might be a reasonable benchmark, and I started with the assumption about the actual litigation costs. A balance has to be struck, but the Under-Secretary may say that it can be struck by administrative means. I will listen carefully to what he says about that.

In a free society, individuals are entitled not to be bothered about trivia. It is desirable to tackle crime but, as I said earlier, the process through which an individual is being put has to be balanced against the amount that it is being alleged that he gained from his unlawful conduct. If we write a blank cheque and specify nothing for the Assets Recovery Agency, I am not sure whether we are doing our job properly. There are a number of hon. Members—

Ian Lucas (Wrexham) rose—

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. Before the hon. Gentleman gives way, I must inform the Committee that the amendment is narrow, and says that the amount has to be £10,000 or more.

Photo of Ian Lucas Ian Lucas Llafur, Wrecsam

Thank you, Mr. McWilliam.

Is it not important that there be no reference to an amount in the clause? Would not a limit of any sort undermine the important deterrent effect of the Bill? I know that that would be the case with two more provisions concerning the amounts of money that we seek to recover, and I suspect that in due course that

will apply to the Assets Recovery Agency, too. The disadvantage of having a figure in the clause is that it might fundamentally weaken the deterrent effect. The arguments that have been put forward do not dislodge the strong emphasis on that.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I slightly question the real deterrent effect of the provisions. They will have a deterrent effect on individuals who derive substantial income from unlawful conduct if they discover that fellow criminals in that category are being stripped of millions of pounds. That will send a powerful deterrent message: they will know that the state has the resources necessary to pursue the Mr. Bigs who have not been convicted of crime. The upshot will be that most of those criminals will remove their assets from the United Kingdom, or at least seek to do so if they have not already been tackled by the agency. That would have a desirable effect on general criminality, by reducing the pool of money available that is often recycled into further criminal activity.

It is unlikely that the provision would deter, for example, a drug addict. Such a person may have a chaotic lifestyle, and although he has not been convicted of any offence, he may be suspected of dealing—indeed, there may be evidence on the balance of probabilities that he has dealt—in drugs on a small scale to feed his habit. I doubt that he will wake up in the night sweating at the thought of the Assets Recovery Agency knocking at his door. If the agency does pursue him, he may feel that he has been victimised. That will be especially true if he believes that he has a defence and that he has been dragged through the procedure, which may be ruinous for him and further disrupt his life. That is why we have to be careful about the point at which that balance is struck. If I felt that introducing a £10,000 provision would remove the deterrent effect, I would be swayed by the arguments of the hon. Member for Wrexham (Ian Lucas). However, I am not persuaded. I believe that in all likelihood the provision will be applied only to substantial criminals, partly because those who are not successful tend to have acquired criminal records and will be dealt with through the confiscatory mechanism. The provision is well targeted against crime barons who have escaped prosecution—and some of those may be foreigners with a bad track record and a bad reputation abroad, who have moved to this country with their assets. I find the idea that the power will be used on such a small scale as has been suggested improbable. If that is indeed how the Assets Recovery Agency will exercise its powers, I am not sure whether I want to give it such powers. Quite apart from the fact that a lot of taxpayers' money will be required for rather a small return, I am worried about unfairness.

I have gone on for rather a long time, and I hope that no hon. Member wanted to intervene. Now it would be better for the Committee to have a general discussion on the subject.

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster

This is a sensible, practical and pragmatic amendment. I appreciate that for many hon. Members the prospect of allowing a blind eye to

be turned to someone who has stolen £8,000, £9,000 or £10,000 sticks in their gullet. To return to the point made by the hon. Member for Wrexham, one of the great practical anxieties is that if we do not introduce a de minimis provision we run the risk that the Bill will be ignored. For all practical purposes, the great expense that the agency will incur for each investigation will mean that informally, if not formally and on the record, it will have to have some sort of de minimis provision.

Nothing would be worse than bringing the law into disrepute. One need only consider the law on illegal drugs and how a blind eye is being turned, leading to a rapid unwinding, especially among the young, as they see the rule of law being so obviously ignored.

A figure of £10,000 seems sensible. It might be argued that the de minimis provision should be set at a rather higher level, because of the enormous expense involved in each recovery mechanism. The worry is that, as we are trying to get the Mr. Bigs and the next level down—the Mr. Not-quite-so-bigs—the agency must not be effectively paralysed by an enormous number of fairly trivial claims, which would be the practical reality in the absence of a de minimis provision.

I might understand if the Minister were to say that he would rather not say on the record but that some guidance will be given to the agency. I appreciate that it may be difficult to state that blatantly on the record. As I said a moment ago in response to the earlier comments of the hon. Member for Wrexham, it would be worrying if a blind eye were to be turned to serious, albeit in a numerical and financial sense rather trivial, aspects relating to the proceeds of crime. I hope that we shall have a sensible discussion on the matter.

I was a junior solicitor at the time of the insolvency of the Bank of Credit and Commerce International, on which I worked exclusively for eight or nine weeks. I accept that it was a high-profile case, but dozens of staff were working full-time, poring over an enormous number of documents. If we do not give guidance to the agency at this juncture, it is easy to see, in relatively trivial cases, that enormous costs could be ratcheted up. The practical reality is that the agency will tend to use a small number of forensic accountants and lawyers. Those people and other professionals will have a high level of expertise and, dare I say it, their hourly costs will run into many hundreds of pounds.

Photo of Tom Harris Tom Harris Llafur, Glasgow Cathcart

The hon. Gentleman said that the amendment would give guidance to the director of the Assets Recovery Agency. However, the amendment refers not to guidance but to a mandatory legally enforceable limit under which the agency would not be able to act. He suggested that if the Bill remains unamended the Assets Recovery Agency will descend into chaos. Does that suggest a lack of faith in a future director of the agency? Will he explain that lack of faith?

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster 5:00, 11 Rhagfyr 2001

It is not that I lack faith in the director. I do not think that the agency will fall into chaos, but there is a real risk that, if a de minimis provision, whether formal or informal, is not put in place, there will be an enormous number of claims and the agency will not see the wood for the trees. I am interested to hear what the Under-Secretary has to say.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

I am suffering from something similar to you, Mr. McWilliam. I am looking for suspects rather than blame. I hope that you do not cast your eye in my direction.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Had the Under-Secretary had been listening to earlier exchanges, he would understand that the Minister of State, Scotland Office had put a curse on my grandson, who passed it on to me.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

You now understand, Mr. McWilliam, why I have tried hard not to offend my hon. Friend in any way.

I thank the hon. Member for Beaconsfield (Mr. Grieve) for his general welcome for the measures under part 5. He rightly said that we are now about to move on to new provisions and a new branch of the law. I accept his argument, and I genuinely look forward to his proposals. I look forward to what he can bring to the Bill and we shall listen carefully to his points, especially if they are made in the spirit of his opening comments.

The amendment would mean that civil recovery proceedings could be taken only in respect of recoverable property if it were valued at £10,000 or more. The Government agree that civil recovery proceedings should be applied only when substantial amounts are involved. Many of the points made by the hon. Gentleman are absolutely right and we agree in principle that there should be a financial threshold. Some of the main issues have been covered in the interventions by my hon. Friends. My hon. Friend the Member for Glasgow, Cathcart (Mr. Harris) rightly said that, under subsection (1)(a), we will have to rely on the discretion of the director of the agency about where he points the resources and how he uses those that are available to be effective in the recovery of the proceeds of crime. If we were to find that the agency was using the powers of civil recovery to chase drug addicts with a chaotic lifestyle, we would be most disappointed.

My hon. Friend the Member for Edinburgh, North and Leith said that perhaps the matter should be handled in another way and guidance should be given. My hon. Friend the Member for Wrexham said that he did not necessarily want the issue enshrined in the Bill.

Those are the main points that I want to make, other than to bring to the attention of the hon. Member for Beaconsfield the provisions contained in clause 286. From the substance of his remarks, I hope that those provisions will satisfy him. When I saw the amendment, I thought that we would have the classic argument about what should be contained in primary legislation and what should be contained in secondary

legislation. It seems that his intention was to point the agency in the direction in which it should be travelling, which was to use the power when substantial amounts of funds justify civil recovery. I point him to the provisions in clause 286(1) and (2), and to subsections (3) and (4), for the manner in which those provisions should be applied.

Clause 286 provides for the setting of a financial threshold in secondary legislation. It would not be helpful to set that threshold in primary legislation. The Secretary of State has the power to set a financial threshold below which proceedings for a recovery order cannot be initiated. When such an order has effect, the enforcement authority will not be able to start proceedings for a recovery order unless it reasonably believes that the aggregate value of the recoverable property is not less than the amount specified.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I am grateful to the Minister. He has correctly highlighted the provision of that power. Even if it had not been specifically spelt out, it would have been implicit in the Bill. Can he tell us how the Home Office views this, and what sort of minimum figure is floating around in its mind?

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

I intend to deal with that. I do not think that the hon. Gentleman and I will differ in our thoughts on the matter, or on the amount. I assure the Committee that we intend to make the order provided for under clause 286. It will be made by the Secretary of State after consultation with Scottish Ministers. It will be better to establish the financial threshold in that way, because if the threshold needed to be adjusted—if, for example, potential targets for civil recovery were dividing their property so that it fell short of the threshold—that could be done more easily than if it was specified in primary legislation.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

I wanted to follow up the discussion between the Under-Secretary and my hon. Friend the Member for Beaconsfield. Although the Under-Secretary may say that the figure that he has in mind might need to be adjusted later, and therefore he wants to specify the threshold in secondary legislation, would it not be better for the primary legislation at least to indicate the sort of figure under consideration? Surely a de minimis provision is not likely to change a great deal. The Law Society of England and Wales has argued that a de minimis provision should be clearly set out, for all the reasons given by my hon. Friend. If the Government have already made up their mind on what sort of figure they will specify, now is the time to specify it, not later. It is bad drafting practice for the Government to say that they know what they want to do, but they will not do it until later.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

What a shame it is that the hon. Gentleman should ruin the serious conversation that we were having. He is playing the usual parliamentary game of what should be in secondary legislation and what should be in primary legislation. He has trodden that route in many Committees. A serious point was being made by the hon. Member for Beaconsfield, and

I shall continue to address it. I do not know whether the hon. Gentleman is suggesting that we include parameters in the primary legislation, but that would not be appropriate. If we tell the Committee our broad intentions, and we subsequently take the powers to specify by order, having consulted the appropriate people, we will have the flexibility to adjust the figure should that need arise, subject to parliamentary scrutiny. We hope that civil recovery will reduce crime by attacking the profit motive and disrupting organised crime rings.

As my hon. Friends have pointed out, we expect the director and Scottish Ministers to use the powers in their jurisdiction to consult on the cases that involve the largest sums. Research has revealed that there should be no shortage of such cases. Given the cost of civil recovery proceedings, in practice we should concentrate on high-value proceeds, as the hon. Member for Beaconsfield rightly pointed out. We have not made a final decision on the level of the threshold.

Photo of Annette Brooke Annette Brooke Opposition Whip (Commons)

I was just reading in Hansard comments made by the Minister for Police, Courts and Drugs, who mentioned £10,000 and ''a substantial sum'', and I should like the Minister's assurance that what he says about secondary legislation is compatible with what I have read.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

It is complicated to deal with lots of different matters. I cannot remember what the hon. Lady is referring to when she mentions £10,000.

We have not made any final decisions. We need to keep our minds open and consult properly on the matter. The current thinking is that it is very unlikely that we shall set a threshold figure below £10,000.

Photo of Annette Brooke Annette Brooke Opposition Whip (Commons)

In one passage, the Minister for Police, Courts and Drugs says:

''Like the existing cash forfeiture scheme, that power will only be available where a substantial sum of cash is discovered, perhaps similar to the existing minimum threshold of £10,000.''—[Official Report, 30 October 2001; Vol. 373, c. 765.]

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

That is what I thought the hon. Lady was referring to. In this part, we shall consider the cash forfeiture scheme, in which the level is £10,000. We are not proposing to change that. We are discussing civil recovery, and I hope that it will satisfy her to know that we do not think that it is sensible to set a threshold for civil recovery of less than £10,000. I do not want to go any further than that. I have given the Committee a clear indication of our thinking, which is not out of line with the passage that she mentioned, which referred to another part of the Bill. Her comments are not out of line with the eminently sensible thinking of the hon. Member for Beaconsfield, either.

Photo of Norman Baker Norman Baker Shadow Spokesperson (Home Affairs)

For the record, on 30 October the Minister for Police, Courts and Drugs mentioned the figure of £10,000 in respect of civil recovery proceedings in column 764. He mentioned forfeiture in the subsequent column.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

I cannot remember every word that was spoken on Second Reading, or whether my right hon. Friend revealed that fact at that point. If he did, that is fair enough. If that is the thinking, we should insert a threshold and use secondary legislation to do so, in order to give us the flexibility that might be required in certain circumstances.

I think that our thinking is broadly in line with that of other members of the Committee. I therefore ask the hon. Member for Beaconsfield to accept that our intention is similar to the spirit in which he tabled the amendment. That is a more sensible and flexible way of proceeding, but it is not out of line with the views that he expressed.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I am grateful to the Minister for his comments. I hope that the debate has been useful. Discussing the matter has been worth while, as the debate is on the record, and the Government can refer to it when the rules are formulated.

The Minister's comments have substantially reassured me that we are not going down the road of using legislation to pursue individuals who do not warrant such treatment. If we were to go down that road, a taint of unfairness would rapidly creep into the proceedings, and public money would be wasted.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs) 5:15, 11 Rhagfyr 2001

I beg to move amendment No. 367, in page 145, line 16, at end add—

'(3) Civil proceedings under this Part shall not be available if there has been an acquittal in criminal proceedings in relation to the same unlawful conduct alleged or relied on.'.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

With this we may discuss amendment No. 356, in clause 248, page 146, line 7, at end insert

', save where there has been a previous positive finding in relation to a defence to confiscation proceedings pursuant to section 6 and there is no fresh evidence that was not available to the Director at the time of the previous proceedings.'.

In light of the extensive nature of the previous debate, and the content of amendments Nos. 367 and 356, I doubt whether it would be in order also to have a stand part debate.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I will bear those comments in mind. I have no objection to that course of action. I think that, by the time the Committee has finished debating these amendments, we will have exhausted our deliberations on the clause.

The amendments raise important issues, but not identical ones. The issues are substantially different, and they must be examined separately—although it is right that the amendments are grouped together.

The amendments raise the question whether there should be a limitation on the power to initiate proceedings for civil recovery. Amendment No. 367 addresses that matter when a criminal prosecution has failed: amendment No. 356, which attaches to clause 248, addresses it when confiscation proceedings have failed—rather than merely the criminal proceedings attaching to a defendant.

It is important to acknowledge that we are creating an unusual power. It is sometimes easy to view—or to lull other people into viewing—a civil recovery procedure as similar to the adversarial procedure, by which individuals bring claims against each other, or even by which a Department might bring a claim for a debt owing to it. However, it is an entirely different matter: in such civil proceedings, it is not necessarily the case that the state will be out of pocket—although I acknowledge that we will consider tax issues later—or that any individual will be a victim. The basis of the proceedings is the state's belief that an individual owns assets that were acquired by unspecified unlawful conduct, and that it is in the public interest that that individual should be deprived of them.

Committee members must bear that point in mind, because we must be careful, as there is a danger that the Assets Recovery Agency might be perceived as an organisation that is allowed to take a second bite at the cherry, after the ordinary proceedings that are usually brought against criminals have failed.

I am troubled by that as a concept, because it comes close to offending the double jeopardy rule. I accept that it can be argued that there is no double jeopardy, because one of the proceedings is civil and the other criminal. However, the hybrid nature of the proceedings brings us close to offending that rule. It is a well-established legal maxim that it is in the interests of the public that there should be finality. If the Assets Recovery Agency's civil proceedings process is a way of reopening proceedings that have been resolved earlier, to the public mind, there are serious matters that we must bear in mind.

I am mindful that the two amendments are very different. Amendment No. 367 would prevent civil proceedings from being brought if there had been an acquittal in criminal proceedings in relation to the same unlawful conduct alleged or relied on. The Committee should consider that. If I argue against the proposition that led me to table the amendment, I accept that there is a growing number of cases in which individuals have sought to succeed with civil proceedings where criminal proceedings failed. Obvious examples spring to mind, such as the acquitted murderer who is subsequently sued by the relatives of the deceased. In some instances, that procedure has been successful.

Comments were made in the past about the undesirability of revisiting matters in civil litigation that were apparently resolved in criminal litigation. One can remember the example of Dr. Bodkin Adams who was adept at recovering large sums in libel damages in the years that followed his acquittal for murder, which was partly because newspapers failed to appreciate that he was still alive. In his old age, he was able to issue writs, and in those days it would have been impossible for newspapers to reopen proceedings with libel actions, so they had to pay up.

Although I am mindful of the rule of finality, the Committee may consider arguments that suggest that civil recovery proceedings should be allowed against an acquitted criminal's assets. However, we should be careful when considering the nature of the civil

recovery proceedings. They are more akin to a form of criminal or administrative state sanction than ordinary civil litigation that is brought between individuals who want redress. The matter is not about redress but about the confiscation or removal of assets that the state believes were unlawfully acquired without, necessarily, an identified victim—not even the state itself. We must be careful, which is why I ask the Committee to consider the amendment.

The arguments in favour of amendment No. 356 are more compelling, because we are considering not a previous acquittal for a criminal offence but the previous failure of confiscation proceedings that were brought in relation to the same assets. The Committee will know from our previous discussions that the way in which confiscation proceedings may be brought for general criminal conduct is enormously wide. It does not necessarily require the trigger of an offence with assets linked to that offence. The trigger provisions can be entered, and assumptions are raised, as are the matter of general criminal lifestyle and rebuttable assumptions.

A person could have previous convictions and have been taken through a failed confiscation process that was based on the criminal lifestyle assumptions. The Committee should consider the extent to which the odds would be stacked against a defendant who was taken through those proceedings. In such circumstances, should the Assets Recovery Agency be able to come back and have a second bite of the cherry with ordinary civil proceedings if no fresh evidence is available to the director?

I shall be asking for the two amendments to be taken separately. Amendment No. 356 raises important issues and I have yet to be persuaded by the Under-Secretary's argument against it, unlike amendment No. 367, about which I am open to easy persuasion that it is a proposal that we should discuss but not necessarily press to a Division.

The Government are in danger of setting up a draconian system that allows the director too much licence. Parliament must fetter his discretion and say that, when he or the prosecutor has brought confiscation proceedings and they have failed, unless there is fresh evidence, he cannot subsequently say, ''Sorry, we failed in that case. We had the wrong judge. It was a Crown court judge. He didn't know what he was doing. Let's go back to a High Court judge, who knows much more about it.'' I see the Under-Secretary smiling, because I am referring to the points that we discussed earlier. However, I fear that such a situation may come about.

In those circumstances, it would be wrong to use the civil proceedings recovery mechanism. Let us suppose that the state, the prosecutor or the director cannot get back the assets by the confiscation regime, but can then reopen it. The two systems will clearly be running in parallel and cannot be dissociated from each other, and that has a taint of serious unfairness about it. Will the Under-Secretary carefully consider amendment No. 356? There would be no real disadvantage in accepting it. There would not be many instances in which the director would be handicapped. If the case

against such a defendant failed in confiscation proceedings, I dare say that it would be easy to find fresh evidence that is necessary to bring the application under the civil recovery route. I ask that the two amendments be taken separately. Although they are linked, different issues arise in respect of each of them.

Norman Baker rose—

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. Before I call the hon. Gentleman to speak, I must say that amendment No. 356 can be voted on, but that will happen when we come to clause 248, to which it relates.

Photo of Norman Baker Norman Baker Shadow Spokesperson (Home Affairs)

Thank you, Mr. McWilliam. I concur with the comments of the hon. Member for Beaconsfield, who presented his case sensibly, without over-emotionalising it. Amendment No. 367 is important. There may be justification for civil proceedings to be pursued if criminal proceedings have failed. After all, it is a different test and different judgments will have to be made when particular actions are taken. I am not sure, however, that the hon. Gentleman's analogy stands up. For example, it is possible for someone to be charged with murder but acquitted, when a charge of manslaughter or other lesser charge might have stuck. That is the difference. There is more of a similarity between the essence of criminal and civil proceedings in that case than there would be in the example cited by the hon. Member for Beaconsfield. That is why I am slightly uncomfortable with what is in the Bill.

Like the hon. Member for Beaconsfield, I am open to persuasion, but a person could be seen by the public—or be misinterpreted or portrayed wrongly in a newspaper—as someone who had been cleared of an offence, but who was then pursued for the same offence by the back door. The provision is open to such an interpretation, so the Government must be aware of that and have a ready response to that charge when it is made as a result of such proceedings, as I am sure it will be at some point.

Photo of Ian Lucas Ian Lucas Llafur, Wrecsam

Does not supermarkets' policy of pursuing shoplifters provide us with a helpful analogy?. They undertake to commence civil proceedings against individuals regardless of whether they are convicted or acquitted of an offence. The supermarkets do that because it is an effective and potent deterrent, and that guidance may be useful in considering the amendment.

Photo of Norman Baker Norman Baker Shadow Spokesperson (Home Affairs)

As the hon. Gentleman says, some commonality is involved. The difference is that in that case the Crown Prosecution Service would pursue criminal proceedings, while the supermarket's civil proceedings would involve a different body. In both the cases under discussion, the public would perceive that the state was involved—that one arm of the state was having a go when a different arm of the state had failed. That is where the comparison breaks down, although I agree that there are some similarities.

On amendment No. 356, the Minister may say that in no circumstances would the director want to undertake proceedings if no new evidence were available. Indeed, I hope that that is so. It would be perverse if he or she wanted to pursue the matter in such circumstances. If that is so, there should be no objection to the amendment, which seems entirely sensible. The Minister will either have to say that there are circumstances in which the director will want to pursue proceedings in which no new evidence is available—in which case it would be helpful if he would outline them—or that there are no circumstances in which that would occur, in which case the amendment should be acceptable. I shall be interested to hear the Minister's response.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department 5:30, 11 Rhagfyr 2001

The hon. Member for Beaconsfield is right to say that although the amendments have been grouped together—I understand why, as they relate to the same issues—they are different, so perhaps we should speak to them separately.

Amendment No. 367 would prevent civil recovery or cash forfeiture proceedings from being initiated in respect of property that is alleged to have been generated by conduct that has been subject to criminal proceedings that resulted in an acquittal. The Bill makes provision for the state to bring proceedings to recover property that is or represents property obtained through unlawful conduct, or, in the case of cash, that is intended for use in unlawful conduct. It does so regardless of whether proceedings have been brought for an offence in connection with the property.

As I said when we discussed part 1, the policy is that the prosecution of criminals will continue to take priority. No member of the Committee would challenge the principle that in the first instance we should try to prosecute criminals and, when appropriate, to lock them away. Nothing in the Bill should discourage people from having that as their first priority, and we have tried to make sure that that is safe. In some instances, it may rapidly be discovered that, for example, the person involved is dead. However, with the exception of such circumstances, prosecution should always take priority over civil recovery, and when someone has been convicted of an offence, criminal confiscation should be the normal method used to recover the proceeds of crime.

When no conviction has been obtained, the director should be able to consider civil recovery action. I do not accept that an acquittal in criminal proceedings in relation to the same unlawful conduct should automatically bar civil recovery, and I do not believe that the hon. Members for Beaconsfield and for Lewes (Norman Baker) are pushing that point. The person involved may not have been convicted for a specific offence and charged in criminal proceedings, but there may be compelling evidence that some of his assets were none the less derived from either his unlawful conduct or that of other people with whom he is associated.

Photo of Norman Baker Norman Baker Shadow Spokesperson (Home Affairs)

Does the Minister also accept that in some circumstances the evidence presented in court in a criminal prosecution is such that it is absolutely clear that the accused should be found not guilty? I do not mean simply a technical not guilty verdict because of faults in the prosecution evidence presented, for example, but a verdict returned because a convincing case has been put. Under those circumstances, it might be seen as perverse if asset recovery were pursued.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The hon. Gentleman is right that if it becomes apparent, for whatever reason, that the assets are the proceeds of crime, and the structure of legislation prevents those assets from being chased and recovered by the state, the people who elected us would regard that, too, as perverse. They would expect us not to pass legislation that allowed that to happen.

Circumstances therefore exist in which the absence of sufficient evidence to secure a criminal conviction does not necessarily mean that there will be insufficient evidence for civil recovery. The civil courts are governed by a set of rules on admissibility of evidence and procedure different from those for criminal courts. For example, the High Court would be more able to admit a greater range of evidence, including hearsay evidence, previous conviction evidence and self-incriminatory material obtained under compulsion, and new evidence might come to light after the trial for the particular offence, which may show a link between the property and the criminal conduct.

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster

I think that the point made both by my hon. Friend the Member for Beaconsfield and by the hon. Member for Lewes was that the state would have a second bite at the cherry, which makes me feel instinctively uneasy. We just heard the example of new evidence coming to light—I accept that that was in relation to a criminal case rather than a civil case, although I presume that there would be opportunity for a retrial on a civil basis. Reference has been made to a robust example whereby a criminal case had fallen apart amid great controversy, and relatives subsequently initiated a private prosecution. That is entirely different: the state acted in the first instance, followed by a private individual prosecution. We are concerned about the state having a second bite of the cherry. Although I understand where the Minister is coming from in that regard, it will surely be seen as draconian for two closely related arms of the state, having failed the first time round, being given a second chance—

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. That is a very long intervention. If the hon. Gentleman wants to take part in the debate, that is another thing entirely.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The hon. Gentleman is right. If the proceedings are used in such a way, there may be a reaction. It is also a double-edged sword. Most of our constituents would want us to pursue relentlessly the kind of people against whom we hope that civil recovery will be effective—the modern Al Capones, or Al Capones, for those who prefer that pronunciation. If criminal investigation and prosecution is not available, people will want us to consider criminal

confiscation, under the structure of the Bill, and if that is not available, they will want us to pursue civil recovery. The hon. Gentleman is right to say that if the powers were misused, there would be a great reaction against them. However, our constituents want us to take effective action against the individuals whom we are talking about, who exist in towns and cities the length and breadth of the country.

Photo of Norman Baker Norman Baker Shadow Spokesperson (Home Affairs)

Let me try again. My concern is about a situation in which there is a criminal prosecution, and it is crystal clear, beyond any doubt, that the accused is not guilty of the charges made against him or her—for instance, he or she had a cast-iron alibi. Will the Minister assure me that when that person leaves the court with no stain on their character in anybody's eyes, there will be no question of pursuing civil recovery in those narrow circumstances? Of course I agree with the Under-Secretary that the tests are different, and that there may be appropriate reasons for bringing civil proceedings, but sometimes the comparative cases for criminal prosecution and civil recovery may overlap to such a degree that if innocence is established beyond doubt in one, it would be perverse to pursue the other.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

I accept what the hon. Gentleman says, but we do not believe that the powers for recovery in part 5 should be used routinely against people who have been acquitted of criminal offences. None the less, I do not believe, either, that we should rule it out or deprive the agency of that ability.

We are talking about two different processes. A person pursued in the criminal courts may well be absolutely innocent of the crime that he is said to have committed. Civil recovery procedures do not breach the principle of double jeopardy, because we are not talking about prosecution; we are talking about the proceeds of crime and being able to show—to the civil standard—that on the balance of probabilities, property is the proceeds of crime. Those are two separate issues.

I accept that civil recovery should not be considered routinely, but in some instances it will be apparent that although criminal proceedings have failed, civil recovery is the glaringly obvious route down which the director should go. The amendment would prevent the director from being able to do that, and the tone of his introduction led me to believe that the hon. Member for Beaconsfield was prepared to withdraw it.

Photo of Vera Baird Vera Baird Llafur, Redcar

I have a residual sympathy with what the hon. Member for Lewes said, although there should not be a hard and fast rule. It must be appreciated that bringing proceedings for a second time under the civil recovery powers will involve the allegation that property has entered a person's possession through criminal conduct. Civil recovery proceedings will require a person to disclose many details of his financial affairs and will put much of his life on public display again. That can have a dramatic, long-lasting and damaging effect on a person's life.

There is something in the criminal sphere called ''The Code for Crown Prosecutors'', which regulates the Crown Prosecution Service's discretion to decide

when to bring a prosecution. Broadly speaking, the CPS prosecutes only if there is a more than 50 per cent. chance of conviction—that is a relevant point—and if prosecution is in the public interest. Granted, those criteria might not be quite plumb with the second set of proceedings, but will my hon. Friend consider introducing a code of conduct and discretionary judgement for the Assets Recovery Agency director, so that fears such as those expressed by the hon. Member for Lewes would be groundless? The public would then be reassured.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. For the sake of equality, I must say that that, too, was a long intervention—although the hon. Lady is quite entitled to take part in the debate.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

My hon. Friend is right to say that civil recovery proceedings could alarm people if they were pursued following an acquittal, but there are many instances in which they may be appropriate. For instance, what if the person who is pursued is innocent, but the proceeds of crime are held by another person? Amendment No. 367 would prevent us from pursuing the proceeds of crime in courts if the original attempt to convict failed.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department 5:45, 11 Rhagfyr 2001

My hon. Friend would not want that to happen. She asked whether there ought to be a code of conduct. Let me return to that question after we have discussed the amendment No. 356, because that raises many of the same concerns in a different context.

Amendment No. 356 would prevent civil recovery proceedings from being initiated when, after a person had been convicted, he had successfully resisted criminal confiscation proceedings being taken against him and no fresh evidence was available. Let me clarify the relationship between civil recovery and criminal confiscation. When we discussed the director's functions under part 1 of the Bill, I explained that when a person has been convicted of an offence, criminal confiscation will be the normal method of recovering the proceeds of crime. Therefore, criminal confiscation proceedings will have ceased before civil recovery is considered.

The amendment seems to presuppose that in civil recovery proceedings, the issues under consideration will be the same as those on which the court has already decided during the criminal confiscation proceedings. That is not the case. Civil recovery is different from criminal confiscation. A finding that property does not represent the defendant's proceeds of crime for the purposes of part 2 would not prevent the property from being considered the proceeds of unlawful conduct under part 5. Although they both have the same standard of proof—the balance of probabilities—different issues arise under each scheme.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

That comment gives me slight cause for concern. Such an argument could apply to confiscation in relation to particular criminal conduct,

but when, under criminal confiscation proceedings, the assertion has been drawn widely that assets are the result of general criminal conduct, it is difficult to see that assets could exist that could then, under civil recovery proceedings, be considered to be different from those that were examined under the general criminal conduct proceedings.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The hon. Gentleman is absolutely right, but that is not what his amendment says. It deals with what will happen when someone has successfully resisted criminal confiscation. The hon. Gentleman does not set out in the amendment whether it refers to the general criminal lifestyle provisions or to particular criminal conduct. He cannot blame me for pointing out that there are different issues.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

Let us suppose that particular criminal conduct has not been proved, and that no confiscation has taken place because there were not deemed to be any benefits. If a general attempt is then made to bring civil recovery proceedings, the particular asset that was deemed to be the result of particular criminal conduct should be isolated and ring-fenced, so that it cannot be touched under the civil recovery proceedings. Otherwise, there would be manifest unfairness. I accept that when a particular recovery has been unsuccessful, other general assets could be considered. However, I cannot see how the assets that have been focused on under a particular recovery proceeding, and found not to be confiscatable, can be amenable to civil recovery.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

Let us continue to examine the issues, because, as I think members of the Committee recognise, they are important. Part 2 provides for the confiscation of the defendant's benefits, either from his general criminal conduct or from his particular criminal conduct. Particular criminal conduct means the offences of which the defendant has been convicted in the current proceedings, together with any offences taken into consideration by the court in passing the sentence. In both cases, the defendant must have exhibited the criminal conduct.

Under part 5, the focus is on the property rather than on the person who holds it. The respondent in civil recovery proceedings—although he may have previously been a defendant in criminal proceedings—will not necessarily be the person who committed the unlawful conduct that gave rise to the original recoverable property. The enforcement authority has to show that that property represents the proceeds of crime. It does not have to show who committed the crime. It would, therefore, be possible for property that cannot be proved to be the proceeds of a defendant's crime under part 2, to be the proceeds of unlawful conduct under part 5. The director, or Scottish Ministers, would need to provide information that showed that the property was, or represented, recoverable property. They would not need to show that the property was derived from the particular offence.

To explain that point, I offer an example; I will refer to the assumptions, because the hon. Member for Beaconsfield says that he cannot understand how, in any circumstances, the one would apply while the other might not. Let us say that a car falls within the scope of the assumptions under part 2, but that the defendant shows that it was stolen by someone else and that, although it was in his possession, he did not know or suspect that it was the proceeds of crime. Therefore, the car is not his benefit from whatever crime was involved—for instance, money laundering—so it would not constitute his benefit from general criminal conduct. The amendment would prevent civil recovery proceedings from being brought in respect of that car. However, as the Bill stands, the director could show that the car was obtained by theft; in that case it would be recoverable, and he could bring proceedings in respect of it.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

This is a fascinating discussion. With regard to clause 245, I made an assumption—which the Committee might also have made—that an action to recover property obtained through unlawful conduct was likely to be directed at the person who obtained the property, because all of us may possess property that has been obtained through the unlawful conduct of somebody else. That can happen.

However, under the ordinary rules of civil law, unless we are proved not to be a bona fide purchaser for value without notice—or we fall within the other exemptions that exist—that property cannot be recovered. The Minister is suggesting a sweeping power of civil recovery which, worryingly, goes beyond what I ever imagined. We did not really look at that under clause 245, because it did not cross my mind that it might be intended to be used to recover property from a person who held it innocently of any wrongdoing. That issue must be considered.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

A purchaser for full value would, no doubt, be able to present that case, and we will get an opportunity to discuss various elements of civil recovery when we debate subsequent clauses.

I am sorry that the hon. Gentleman was not aware that what has been described was at least a possibility under civil recovery proceedings. Those proceedings are not aimed at the individual who committed the crime. They are aimed at the recovery of the proceeds of crime. It is a property-oriented provision, to be pursued through civil proceedings.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I appreciate that, and I always appreciated the fact that a person does not have to do the actual obtaining in order to have civil recovery proceedings brought against them. However, I assumed—wrongly—that if civil recovery proceedings were brought against a person for possessing property that was unlawfully acquired, the ordinary civil law tests would apply to establish that the category of property fell to be recovered and the individual could not legitimately pray in aid the normal defences in such civil claims, such as saying that despite the fact that the property's origin was unlawful, he was in lawful possession of it.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The hon. Gentleman is aware that we are discussing an introductory clause that opens up a wide-ranging debate on part 5 of the Bill. As we get into the Bill and discuss the mechanisms and safeguards that it contains, he will find that the safeguards that he wants are in the Bill. The normal provisions for a purchaser for full value are in clause 306, in part 5, and they are protected. The hon. Gentleman need not fear that a prosecutor will pursue a civil recovery when a person who did not commit the crime can show that property was purchased for full value, because that would be an absolute defence.

I give the hon. Gentleman a valid case. In the circumstance that I explained, we can consider a particular car. We will take away the de minimis considerations and discuss not a Vauxhall Astra, but a Rolls-Royce or an armoured BMW—which I am reliably informed exists in the criminal fraternity of this country. Such a car would not be confiscatable under part 2 even if the assumptions had been met, yet the car could be shown to be the proceeds of crime—and, therefore, possibly recoverable under part 5.

I can tell the hon. Gentleman, and my hon. Friend the Member for Redcar (Vera Baird)—I know that she has worries too—that I do not expect anyone to go down that road, and I would be fearful if anyone did so without due consideration. However, in such circumstances, and when dealing with the people with whom we will be dealing, we should never say never. Those circumstances could exist, and provide an opportunity in which there is a clear case for the confiscation under part 5 of property that was exempted under part 2. If the amendment were accepted, we would rule out that possibility.

I shall give way to the hon. Member for Lewes.

Photo of Norman Baker Norman Baker Shadow Spokesperson (Home Affairs)

I did not indicate that I wished to intervene, but I was thinking about it, so the Minister is obviously telepathic.

The Minister rightly makes the case that there are occasions when civil proceedings need to flow after an acquittal. I understand and accept that. Will he accept that there may be circumstances, which we cannot necessarily predict, in which civil proceedings should not follow an acquittal? The concept of never saying never works both ways. Will he consider further the helpful suggestions of the hon. Member for Redcar, which are not inconsistent with the Bill? If he examines clause 2(5), he will notice that there are already provisions for guidance from the Secretary of State. We want proper guidance to be given to enable a decision to be taken about whether civil proceedings are appropriate, because sometimes, such proceedings may not be appropriate.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

I do not think that there is anything substantial between us—I certainly hope that there is not. On both sides of the argument, we are grappling to look for circumstances that may never arise. We found an example that I put to the Committee in which property would not be confiscated under part 2, although we should not rule out an attack aimed at confiscating it under part 5. In practice, the hon. Gentleman knows that we want the whole of the

proceeds of crime operation to work within the guidance that we shall set. Therefore, criminal confiscation should be the first call on every occasion. Only after those proceedings have been exhausted should civil recovery even be considered. All I am saying to the Committee is that we should not absolutely bar the director from giving consideration when it is clear that property is not confiscatable under part 2. Although the individual may be found innocent of the crime for which he has been pursued, we should not say, as amendment No. 367 does, that in no circumstances could the director consider civil recovery.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs) 6:00, 11 Rhagfyr 2001

I am sorry to press the Minister, because this may be a difficult matter with which to deal. A moment ago, he talked about the distinction between a person in respect of whom no confiscation goes ahead because the vehicle was not his, nor was it a tainted gift to him. That must come within the same category. Yet he suggests that, under the provisions covering property obtained by unlawful conduct, the director would be entitled to invoke a wider test.

My mind went to clause 247, which we have not considered, under which property obtained through unlawful conduct is defined. A definition is provided in the notes on clauses, but it is difficult to extrapolate one from the clause itself. I read nothing in the notes on clause 247 to suggest that the definition of property obtained by unlawful conduct could have a wider meaning than that of a tainted gift.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

There are different proceedings and different circumstances. It will not always be the case that property is a tainted gift. The car may belong to someone and it may not be possible to show that it was a benefit of crime under the part 2 regulations, yet the director may consider that under civil recovery proceedings, he can show that the car was the proceeds of crime. As the hon. Gentleman knows, the Secretary of State can issue guidance to the director. We should not rule that out absolutely. If we did, we could put ourselves in the embarrassing position, if a glaring opportunity arose for the civil recovery of the proceeds of crime, of having prevented it from being pursued.

Photo of Norman Baker Norman Baker Shadow Spokesperson (Home Affairs)

I accept all that the Under-Secretary has said, but does he agree that after a prosecution has failed, it may not be appropriate to pursue civil proceedings? Will he issue a code of conduct or a guidance note that says to the director of the Assets Recovery Agency when it may not be appropriate to pursue civil proceedings?

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

I do not disagree with the hon. Gentleman. There will be many circumstances in which it is not appropriate to use civil recovery proceedings. I do not know whether it is necessary to lay that down in guidance at this point in the Bill, or whether we can allow the director discretion. A judgment will have to be made at the time. We consider that the measure is targeted. It will be aimed at the top end of criminality, where there are substantial proceeds of crime to be confiscated. No evidence or

intelligence suggests that there will not be many circumstances that will keep the director and the agency busy. Such cases will be complicated, so there will not be hundreds of them. It will take time and expertise to put them together. As the hon. Gentleman asks me to accept that there will be cases such as he describes, will he accept that on the odd occasion—they may be few and rare—it may be appropriate for the director to take such action, and that we should not prevent him from doing so?

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

It has been an interesting debate, and I am grateful for the Minister's comments on both amendments. As I said at the outset, I believe that the issues arising on each are rather different.

Amendment No. 367 relates to an anxiety about unfairness, which was highlighted by the hon. Members for Redcar and for Lewes. I urge the Minister to consider giving an early assurance about a code of conduct being in force for circumstances in which a civil procedure might be used following an acquittal. I am worried about that, but as I said earlier, I can also envisage legitimate circumstances in which that discretion should continue to be with the director to allow him to bring civil proceedings.

Several comments have been made on the matter, and indeed I argued against myself in presenting my case, as I appreciated that there was an alternative way of considering it. However, I believe that some early reassurance would be helpful, especially if we are not to have to revisit the matter on Report. I accept that it may be difficult to tailor an amendment that does justice to the particular circumstances with which we are trying to deal, but if the Minister would consider providing that assurance, the Committee would be greatly helped, and the Bill could be improved.

I realise that we shall not vote immediately on amendment No. 356, but having listened to the Minister, I feel that I am likely to press it to a vote. The more I listened to him—I hope that he will forgive my saying this—the more worried I was about what we were setting up under the civil recovery procedure.

We shall have an opportunity to consider the matter further when we debate clause 247 stand part. I tabled no amendments to clause 247, because having read it I reached a conclusion about what property obtained through unlawful conduct amounted to. It did not tally with the Minister's interesting example in trying to differentiate civil recovery proceedings in respect of such property from confiscation proceedings. I appreciate that it is difficult sometimes, but I take his example and throw it back at him.

The Minister suggested that there might be circumstances in which a convicted defendant is taken through the confiscation proceedings but it cannot be shown that the motor vehicle in his possession, which belongs to him, is a tainted gift, his property or something that can be latched on to as a benefit. However, if I have understood him correctly, he takes the view that in such circumstances it would still be possible for the director, under civil recovery

proceedings, to claim that the property was obtained through unlawful conduct and can be seized from the defendant.

In the explanatory notes to clause 247, property obtained through unlawful conduct is defined:

''A person will obtain property through unlawful conduct if he obtains it:

— by the conduct—for example by stealing it, or by obtaining it by means of dealing in illicit drugs, or

— in return for the conduct—for example by being paid to commit murder or arson, or taking a bribe to give false evidence or corruptly award a contract.''

Reading those two passages in the explanatory notes, I am at a loss to understand how such property could have slipped through the confiscation proceedings with regard to benefit from general criminal conduct. I see that a note is winging its way to the Minister, so I look forward to being corrected on my assumptions. Either I have misunderstood clause 247 and what constitutes unlawful conduct, in which case I am worried, or I have not misunderstood, in which case the Minister's example was not a good one. I cannot even think of an example whereby a failure of the confiscation proceedings with regard to general criminal conduct could possibly lead to a civil recovery in relation to the same assets. The only example that I can think of is when there is a failed attempt to recover certain assets for particular criminal conduct, but there are nevertheless other assets that could be recovered under civil recovery.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The hon. Gentleman is very good at thinking on his feet and dancing on the head of a pin. I do not say that in a derogatory way.

Let us suppose that a particular individual is being pursued through criminal proceedings, and an assumption has been made of a criminal lifestyle, but the car in question is not the proceeds of his criminal conduct but the proceeds of another's criminal conduct. Does the hon. Gentleman not see that there might be opportunities under part 5 that do not exist under part 2?

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

If I have understood the explanatory notes to clause 247 correctly, no. My reading of them is that the clause limits the definition of property obtained through unlawful conduct. The clause itself is rather more opaque. The explanation provided suggests that it must be obtained through the acquisitive activities of the individual or a payment for a crime. I was listening to the Minister when he opened the debate, and he gave me the impression—which may be correct, in which case I am worried—that property obtained through unlawful conduct could be anybody's property and that the definition was unrelated to any wrongdoing by the individual himself. How does that tie in with the explanation given to clause 247? I begin to think that if the Minister is right, the explanation given to clause 247 is wrong, and we will have to give serious consideration to the fact that we are widening the powers of civil recovery almost to the point of absurdity. When we come to clause 247, I shall give the Minister examples of the sort of property that would start to fall to be recovered, which will surprise people.

I remain unconvinced. In view of that, I intend to press amendment No. 356 to a vote when the time comes. Of course, it will have to be taken under clause 248, and by that stage we will have had time to consider clause 247, so it is possible that the Minister will have persuaded me, in the stand part debate on that clause, that I am wrong. At the moment, however, I rather doubt that. In the meantime, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 245 ordered to stand part of the Bill.