The rights of third parties in confiscation matters: an inhospitable landscape
Prior to the introduction of new legislation in 2015 (section 10A of the Proceeds of Crime Act), a third party had no right to make representations to the court concerning the extent of their interest in a particular asset before a confiscation order was made, but had to wait until the enforcement proceedings to argue their interest. Only if the defendant chose to call them as a witness would a third party be heard by the Crown Court making a confiscation order. Section 10A introduced an obligation on the court to hear from third parties during confiscation proceedings in certain circumstances, by providing:
(1) Where it appears to a court making a confiscation order that—
(a) there is property held by the defendant that is likely to be realised or otherwise used to satisfy the order, and
(b) a person other than the defendant holds, or may hold, an interest in the property,
The court may, if it thinks it appropriate to do so, determine the extent (at the time the confiscation order is made) of the defendant's interest in the property.
(2) The court must not exercise the power conferred by subsection (1) unless it gives to anyone who the court thinks is or may be a person holding an interest in the property a reasonable opportunity to make representations to it.
In the Northern Irish case of R v Hilton the question of third party rights came to the fore again. A confiscation order was made against Ms Hilton equating to her share of a house which she owned with her former partner. Ms Hilton subsequently and successfully argued before the Court of Appeal that the Crown Court judge had failed to comply with the requirements of section 160A(2) (the corresponding provision to section 10A in Northern Ireland) by failing to give Ms Hilton’s former partner (and the mortgage lender building society) the chance to make representations about their interest(s) in the house before making the confiscation order. The matter then went before the Supreme Court which ruled that where a Crown Court making a confiscation order determines the extent of a defendant’s interest in property jointly held with another person, pursuant to section 160A(2) (section 10A) the other person must be given the chance to make representations at the stage of making the order. However where the Crown Court simply forms a view of the extent of the defendant’s interest, the other person will have the chance to make representations later at the enforcement stage.
The judgment in R v Hilton is straightforward in that it restates what is arguably clear from the wording of section 10A and it reiterates that the Crown Court should only exercise its discretion to make such a determination (and consider third party representations) before making a confiscation order in cases which do not present too much difficulty. Wherever such cases do arise, third parties should ensure they are legally represented in order to make effective representations and provide the necessary evidence because, other than in exceptional circumstances, they will not be afforded the opportunity to do so again at the enforcement stage.
Our team of specialist criminal defence lawyers have extensive experience acting in all aspects of confiscation including advising on the rights of third parties and can guide you through every step of the process.
Ed Smyth is a Senior Associate in the Criminal Litigation Department and represents individuals and corporates involved across the full spectrum of criminal and quasi-criminal matters. He has considerable experience of confiscation and asset forfeiture proceedings and of challenging the exercise of search and seizure powers. He has acted in cases involving the SFO, the NCA, HMRC, the Information Commissioner, the Electoral Commission and various professional disciplinary bodies.
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