Posted: 09 / 10 / 2021

In the vast majority of confiscation cases the defendant’s available amount will be based not on a luxury yacht but on rather more mundane assets. This article outlines what is meant by the defendant’s available amount in confiscation, how it is calculated and why it is important.

What is meant by ‘available amount’?

There is an important statutory definition in s9 Proceeds of Crime Act 2002. Subsection (1) reads

    • (1) For the purposes of deciding the recoverable amount, the available amount is the aggregate of —
      • (a) the total of the values (at the time the confiscation order is made) of all the free property then held by the defendant minus the total amount payable in pursuance of obligations which then have priority, and
      • (b) the total of the values (at that time) of all tainted gifts.

How is ‘available amount’ calculated?

In a typical case the calculation of the defendant’s available amount involves three steps:

(i) identify all assets currently owned by the defendant and value them (at their current open market value less any anticipated costs of sale);

(ii) identify all liabilities of the defendant which are secured on those assets and deduct each of these from the value of the asset on which the liability is secured (but ignore any other liabilities of the defendant); and

(iii) add on the value of any tainted gifts made by the defendant.

There are important differences between this exercise, relating to ‘available amount’, and the exercise the court is required to undertake in relation to the defendant’s ‘benefit’.  So that, for example, controlled drugs seized from a defendant will be taken into account in relation to his benefit but not in relation to his available amount.  On the other hand, tainted gifts are taken into account in relation to available amount but do not of themselves give rise to any benefit.

There may be further complications where, for example, the defendant has outstanding fines in relation to previous convictions, or owes certain taxes (such as VAT or his employees’ PAYE), but these complications are relatively rare in practice.

Take care at steps (i) and (ii) to include items only insofar as they relate to the defendant and to exclude the assets and secured liabilities of others, such as the defendant’s domestic partner or children.

The identification and correct evaluation of tainted gifts is a subject in its own right and is dealt with in other articles on this blog, for example HERE and HERE.

Why is ‘available amount’ important?

Where, as is often the case in practice, the court can be satisfied that the defendant’s available amount is less than his benefit then, when making the confiscation order, the court will not order the defendant to pay an amount which exceeds his available amount.

After the confiscation order has been made, and the defendant’s assets have been realised, it may be appropriate to ask the court to vary the original confiscation order to reflect a shortfall in the amounts actually obtained on sale. This is considered in another article on this blog HERE.

At a later date the prosecution can request the court to look afresh at the defendant’s available amount and order him to make a further payment under s22. That is considered in another article on this blog HERE.

 

This brief article can only provide an outline of the main issues.  Lots more information is available on our website blog HERE or via our recorded webinars HERE.

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David

(Note: This article applies to confiscation proceedings under the provisions of Part 2 of the Proceeds of Crime Act 2002 in England and Wales.  There are a number of additional issues which could be relevant to a defendant’s confiscation proceedings in particular cases which it is not possible to deal with in a relatively short article such as this.  Appropriate professional advice should be sought in each individual case.)