Clause 282 - Compensation

Part of Proceeds of Crime Bill – in a Public Bill Committee am 6:45 pm ar 18 Rhagfyr 2001.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department 6:45, 18 Rhagfyr 2001

The protection provided to receivers under clause 252(3) is intended to prevent potential receivers from being deterred from receivership in several types of recovery cases. As I explained when we discussed the amendment tabled to clause 252, it is a protection commonly provided for receivers. Obvious models for clause 252(3) are found in the Insolvency Act 1986, in section 2, page 74. The official receiver is provided with similar protection if he causes loss or damage in seizing or disposing of property that he has reasonable grounds for believing to be part of the estate. The same provision is made in section 304(3) of the 1986 Act for the trustee of a bankrupt's estate. Such provision also currently applies under the Criminal Justice Act 1998 and the Drug Trafficking Act 1994 to receivers appointed in criminal confiscation cases. The provision is replicated for criminal confiscation cases in clause 61 of the Bill. That newfound injustice exists in other legislation. I am unaware that it causes difficulty or has caused difficulty in the past under the various pieces of legislation enacted by the party to which the hon. Gentleman belongs.

The amendment approaches the issue from another direction. If the receiver is not liable the amendment seeks to ensure that another party, in other words the enforcement authority, is liable. It does not seem appropriate that the director should be liable for the actions of an interim receiver or an administrator in those circumstances. The interim receiver is appointed by the court and is a creature of the court. He does not act on behalf of the director or Scottish Ministers. It would be odd if the enforcement authority could be required to pay compensation in relation to a property that had never been subject to an interim order, as a result of actions by a receiver over whose actions it had no control.

I fully understand the concern that people who are entirely uninvolved in the civil recovery procedures may suffer loss and not be eligible for redress. It may be that the property would normally be covered by their insurance and that there would not therefore be any loss. Even if that were not the case, I am not persuaded that the enforcement authority should be liable to pay the compensation. I have, however, noted the concerns expressed and I will look into the position to see whether an additional measure of protection should be afforded to those affected by the acts of the interim receiver. I am conscious that the law on receivers is well established and that it is important to take full account of existing precedents. I cannot, however, make a commitment to table a Government amendment on that point. Against that background, I hope that the hon. Gentleman will withdraw his amendment.