Jawad v R

Factual and Procedural Background

The Defendant and two others pleaded guilty to a money laundering offence connected with frauds on a bank. The fraud involved opening bank accounts under false names, depositing worthless cheques, and transferring funds between accounts to enable multiple cash withdrawals before the cheques were detected as invalid. The Defendant was found in possession of assets such as gold bars and jewellery linked to this criminal activity. The money laundering charge related to converting fraudulently obtained bank balances, excluding fraudulent credit card use.

The lifestyle provisions of the Proceeds of Crime Act 2002 ("POCA") applied, meaning the Defendant's benefit was calculated from criminal conduct generally, not limited to the specific offence. The agreed benefit amount was £174,827.20, which included the loss to the bank of £64,086.76 and additional sums derived from statutory assumptions under section 10 of POCA. The Defendant's available assets exceeded the benefit figure, allowing for a confiscation order without a lower ceiling.

The Crown Court made a confiscation order for the agreed benefit amount without objection. Subsequently, the Crown sought a compensation order for the bank's loss of £64,086.76. The Defendant's counsel opposed the compensation order on grounds of double counting and unfairness due to co-accused not receiving compensation orders. The judge rejected these objections and made the compensation order.

The Defendant appealed the confiscation order, arguing that including the £64,086.76 loss in both the confiscation and compensation orders amounted to double counting, rendering the confiscation order disproportionate and in breach of Article 1 of Protocol 1 of the European Convention on Human Rights ("A1P1"), particularly in light of the Supreme Court decision in R v Waya.

Legal Issues Presented

1. Whether a confiscation order that includes sums for which a compensation order has also been made constitutes double counting and is therefore disproportionate under A1P1.
2. Whether the making of a compensation order initiated "proceedings" under section 6(6) of POCA, thereby affecting the mandatory nature of a confiscation order.
3. Whether, in a lifestyle case, the benefit figure for a confiscation order should exclude sums representing proceeds of particular criminal conduct included in a compensation order.

Arguments of the Parties

Appellant's Arguments

• The confiscation order was disproportionate because it included the same £64,086.76 that was the subject of a compensation order, amounting to double counting and violating A1P1.
• The bank's request for a compensation order constituted "proceedings" under section 6(6) of POCA, converting the duty to make a confiscation order into a discretionary power, allowing reduction of the confiscation order.
• The confiscation order was based on an incorrect benefit figure because, in a lifestyle case, the benefit should be from general criminal conduct and not include proceeds of particular criminal conduct, such as the £64,086.76.

Respondent's Arguments

• The court must determine the confiscation order first according to the mandatory terms of POCA, especially section 6, and compensation orders are irrelevant to that calculation.
• Compensation orders and confiscation orders serve different purposes and can coexist without one affecting the other.
• The statutory scheme in section 13 of POCA does not require reducing a confiscation order due to a compensation order, except in cases of insufficient means.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging the binding authority of R v Waya, particularly its unanimous guidance that confiscation orders must not be disproportionate under A1P1. The court emphasized that the proportionality test does not grant general discretion to alter orders on fairness grounds but requires careful consideration of whether the defendant is being required to pay twice for the same sums.

The court distinguished between compensation orders and POCA confiscation orders, noting their separate statutory origins and purposes. Compensation orders are summary remedies aimed at repaying victims, enforced primarily by magistrates with limited powers and subject to practical enforcement limitations, including the possibility of default imprisonment which extinguishes the payment obligation. In contrast, POCA confiscation orders are designed to deprive defendants of criminal benefits with more rigorous enforcement mechanisms.

Given these differences, the court held that the mere existence of a compensation order does not automatically render a confiscation order disproportionate. Disproportionality arises only if there is certainty that the defendant will pay twice, i.e., that the victim has been or will be fully restored. If restoration is uncertain, inclusion of the sum in the confiscation order is not disproportionate.

The court rejected the appellant's argument that the bank's request for a compensation order constituted "proceedings" under section 6(6) of POCA that would convert the duty to make a confiscation order into a power. The compensation order is ancillary to criminal proceedings, not a separate civil proceeding by the victim.

Regarding the calculation of benefit in lifestyle cases, the court clarified that benefit from general criminal conduct includes particular criminal conduct. The appellant's argument that sums representing proceeds of particular conduct should be excluded was dismissed as inconsistent with the statutory scheme.

Finally, the court addressed the practical implications of the appellant's failure to pay the compensation ordered. It granted the appellant an opportunity to repay the victim within 28 days, with the confiscation order to be reduced accordingly if repayment is made, reflecting the principle that credit should be given for restoration.

Holding and Implications

The court's final decision was to ALLOW THE APPEAL IN PART on condition that the appellant repays the victim the sum of £64,086.76 plus proper interest within 28 days of the judgment. Upon such repayment, the confiscation order will be reduced by that amount. If repayment is not made within this period, the appeal will be dismissed, and the confiscation order will stand as originally made.

The direct effect is to provide a mechanism for avoiding double counting by allowing reduction of the confiscation order upon proof of repayment. The court emphasized that this does not establish a general rule requiring confiscation orders to be reduced solely because a compensation order exists. Instead, reduction depends on certainty of actual restoration to the victim. The decision does not create new precedent beyond applying the principles established in R v Waya and clarifying the interplay between compensation and confiscation orders under POCA.