Confiscation Orders and the Impact of Part Payment on Default Sentences
A recent decision has clarified the position in respect of the calculation of reductions for default sentences when Confiscation Orders are not settled within the prescribed timeframe. Ilana Baines considers the impact of the Supreme Court ruling in R (on the application of Gibson) v Secretary of State for Justice  UKSC 2
The proceedings concerned the enforcement of confiscation orders made by the Crown Court upon conviction. Almost 20 years ago the appellant was convicted of a drug trafficking offence and was sentenced to 25 years’ imprisonment. At a Confiscation hearing a year later, in March 2000, he was ordered to pay £5.4 million or serve a six years’ default sentence. He was given 12 months to pay, once this time expired interest would start accruing.
A receiver was appointed and an initial payment of £12,500 was made in May 2007. A month later the appellant appeared before the Magistrates Court at an enforcement hearing. By this stage interest had been accruing alongside the outstanding confiscation figure and the total amount due had increased to £8.1 million. At the hearing the Magistrates ordered that the original 6 year default sentence should be reduced by 7 days to take into account the partial payment of the original £5.4 million confiscation sum.
Following this, a further 2 payments of £12,000 and £65,370 were made, on these occasions the Prison Service calculated the reduction to the default sentence. When calculating further reductions to the 5 years 52 week default sentence, the Prison Service used the increased figure of £8 million (taking into account the interest accrued on the order) instead of the much lower original figure of £5.4 million. This resulted in a 24 day reduction.
The appellant commenced judicial review proceedings arguing that he was entitled to a further 11 days reduction as the calculation should have been conducted on the basis of the proportion which the contributions bore to the £5.4 million. The Supreme Court allowed the appeal and held that interest had no part to play in the calculation of default terms.
This ruling ensures that there continues to be an incentive for individuals who are the subject of a Confiscation Order continue to make contributions after the default sentence has been triggered.
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Ilana is a criminal litigator specialising in white collar crime and corporate fraud matters. She is currently representing client’s both pre and post charge in relation to allegations of money laundering, tax evasion, land banking and LIBOR fixing. Ilana also specialises in representing clients in Restraint and Confiscation proceedings.