May, R v

Factual and Procedural Background

The Appellant pleaded guilty at The Court on 24 September 2001 to a conspiracy to cheat the revenue by means of a “carousel” VAT fraud that caused an estimated £11 million loss to Agency A. He was sentenced to four years’ imprisonment (reduced from five on appeal) and, on 2 August 2002, a confiscation order under the Criminal Justice Act 1988 was made in the sum of £3,264,277 with six years’ imprisonment in default. The Court of Appeal upheld the confiscation order in 2005. The present appeal to the House of Lords (the “Committee”) concerns only the confiscation order.

Legal Issues Presented

1. Whether, under the statutory confiscation regime, a defendant who jointly acquires the proceeds of crime can be ordered to pay the whole value of that joint benefit, or whether the court must apportion the benefit among all conspirators.
2. How the three statutory questions—(i) benefit, (ii) value of benefit, and (iii) recoverable amount—should be applied where benefit is obtained jointly.
3. Whether a confiscation order for the full joint benefit is disproportionate or incompatible with Article 1 of the First Protocol and Article 5 of the European Convention on Human Rights.

Arguments of the Parties

Appellant's Arguments

• The statutory scheme is intended to be effective yet fair; ordering each conspirator to pay the full joint benefit allows multiple recovery, is oppressive, and exceeds the victim’s loss.
• Such multiple recovery would be disproportionate and violate Convention rights because imprisonment may follow non-payment.
• Authorities such as R v Porter indicate that apportionment between conspirators is permissible and should be applied here.

Respondent's Arguments

• The confiscation legislation is mandatory and penal in nature; courts have no discretion to depart from it except as expressly allowed.
• Where benefit is obtained jointly, each conspirator “obtains” the whole of that property and may properly be ordered to pay its full value.
• The scheme already guards against disproportionality by limiting enforcement to the defendant’s realisable assets; no Convention breach arises.

Table of Precedents Cited

Court's Reasoning and Analysis

The Committee began by tracing the statutory evolution of confiscation powers, stressing that courts must answer three discrete questions: (1) has the defendant benefited? (2) what is the value of that benefit? and (3) what amount is recoverable from the defendant’s assets. Applying that framework:

• Benefit. Because the Appellant jointly controlled the fraudulent companies, he “obtained” the entire proceeds of the VAT fraud even though others shared in it. Joint possession is legally equivalent to sole possession for the purpose of benefit.
• Value of Benefit. The trial judge’s deduction of £1,175,256 (monies already recovered) conflated benefit with realisable assets. Properly, the gross sum of £4,439,533 (phases 3–4 of the fraud) represented the benefit, but the Committee was content to proceed on the lower figure forming the basis of the existing order (£3,264,277).
• Recoverable Amount. The judge valued the Appellant’s realisable assets at £3,887,198—more than the confiscation order—satisfying statutory limits and avoiding any risk of imprisonment for inability to pay.

The Committee rejected the Appellant’s reliance on R v Porter, treating that case as turning on lack of evidence of joint receipt, not as authority for compulsory apportionment. It further held that ordering each conspirator to pay the full joint benefit neither creates double recovery nor violates Convention rights because:
(a) confiscation orders are penal, not compensatory;
(b) they are limited to what each defendant obtained; and
(c) they can never exceed the defendant’s available assets.

Accordingly, the statutory purpose of stripping criminals of their gains is best served by permitting full-value orders against each joint beneficiary. Any perceived harshness is mitigated by subsequent provisions allowing adjustment if available assets prove insufficient.

Holding and Implications

APPEAL DISMISSED.

The confiscation order of £3,264,277 stands. The decision confirms that where property is obtained jointly, each conspirator may be ordered to pay the whole value of that property, and courts have no power to apportion liability unless expressly authorised by statute. The ruling reinforces the mandatory, penal nature of the United Kingdom’s confiscation regime without creating new precedent beyond clarifying existing principles.