Introduction

The case of Asplin & Ors v R ([2022] WLR(D) 93) adjudicated by the England and Wales Court of Appeal (Criminal Division) on January 13, 2022, marks a significant development in the realm of criminal confiscation proceedings. The appellants—Paul Asplin, David Kearns, and Sally Jones—were convicted of conspiracy to defraud DAS Services Ltd (DAS). The core issues revolved around the calculation of benefit obtained through fraudulent activities, particularly the inclusion of salaries and pension funds in determining realisable assets for confiscation and compensation orders. This commentary delves into the nuances of the judgment, elucidating its implications for future legal proceedings.

Summary of the Judgment

The Court of Appeal upheld the lower court’s decision to impose confiscation and compensation orders on the appellants. However, it made critical adjustments concerning the calculation of benefits and realisable assets. Specifically, the court ruled that salary figures included in the benefit calculations should be net of tax, and pension funds should be considered as realisable assets based on their Cash Equivalent Transfer Value (CETV) at the time of the hearing, not at the time of the original judgment. The court also addressed procedural issues, extending the time for payment of orders and dismissing the prosecution’s request for costs to be covered by central funds.

Analysis

Precedents Cited

The judgment referenced several key cases:

• R v Gohil [2018] EWCA Crim 140: Addressed the strict conditions under which a decision can be reopened in confiscation cases.
• R v Cramer (1992) 13 Cr. App. R (S) 390: Established that costs incurred in realising an asset should be deducted to determine its net market value.
• In re McKinsley [2006] EWCA Civ 1092: Discussed the circumstances under which a certificate of inadequacy can be obtained.
• R v Andrewes [2020] EWCA Crim 1055: Clarified the circumstances under which confiscation orders may be deemed disproportionate.

These precedents provided a legal framework that influenced the court’s approach to recalculating benefits and determining the realisable assets in this case.

Legal Reasoning

The court meticulously dissected the mechanisms by which pension funds were treated as realisable assets. Initially, the lower court had included the gross salary and pension amounts in the benefits calculation. The Court of Appeal rectified this by stipulating that salary figures should be net of tax, aligning with principles established in R v Cramer. Furthermore, the inclusion of pension funds as realisable assets was affirmed, contingent upon their transferability via a SIPP. The court acknowledged the trustees' authority to forfeit these funds but determined that, until such forfeiture occurred, the pension funds remained valid realisable assets. This decision underscores the importance of accurate asset valuation and the potential complications arising from trustees' discretion.

Impact

This judgment has far-reaching implications for future confiscation proceedings, particularly in cases involving pension funds. It clarifies that:

• Pension funds should be included as realisable assets based on their CETV at the time of the hearing.
• Salary figures in benefit calculations must be net of tax to ensure accurate determination of profits obtained through criminal conduct.
• Trustees’ potential actions to forfeit pension funds must be transparently factored into the calculation of realisable assets.

Legal practitioners must now navigate the complexities of asset valuation with a heightened awareness of tax implications and trustees' powers. Additionally, this case emphasizes the necessity for clear communication and candour from prosecution regarding the handling of realisable assets.

Complex Concepts Simplified

Realisable Assets

Realisable assets refer to the property or funds that a convicted individual can convert into liquid assets to satisfy confiscation and compensation orders. These assets are pivotal in ensuring that the benefits obtained through criminal activities are deprived from the offender.

Confiscation Orders

Under the Criminal Justice Act 1988, confiscation orders require offenders to surrender assets considered to be derived from criminal conduct. These orders aim to eliminate the financial incentives for engaging in criminal activities.

Cash Equivalent Transfer Value (CETV)

CETV represents the lump sum amount that a pension scheme could provide if a member were to transfer their pension benefits to a different scheme or withdraw them. It is a crucial metric in determining the value of pension funds for confiscation purposes.

Self-Invested Personal Pension (SIPP)

A SIPP is a type of personal pension plan that allows individuals greater control over the investment of their pension funds. Transferring pension funds to a SIPP can facilitate the realization of assets to satisfy confiscation orders.

Certificate of Inadequacy

This is a legal document obtained by an offender to demonstrate that their available realisable assets are insufficient to satisfy a confiscation order, potentially leading to a reduction of the order’s amount.

Conclusion

The Asplin & Ors v R judgment serves as a pivotal reference point for the treatment of pensions and salary calculations in confiscation proceedings. By refining the criteria for realisable assets and emphasizing net figures over gross, the court has reinforced the precision required in asset valuation. Moreover, the judgment highlights the need for proactive measures to ensure that trustees' actions align with legal expectations, safeguarding the efficacy of confiscation orders. Legal practitioners and affected parties must remain vigilant in adhering to these clarified guidelines to ensure fair and just outcomes in future cases.