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R v M - A potentially important judgment in limiting the scope of the 'apportionment principle'

On 22nd January 2008 Bart Casella successfully appealed a confiscation order that had been made against his lay client at Snaresbrook Crown Court on 8th June 2007.

The judgment is potentially important in confiscation hearings under the Proceeds of Crime Act 2002 in limiting the scope of the 'apportionment principle'. The principle of apportioning the benefit from a crime as between defendants / conspirators was dealt with in the case of R v Gibbons and McKechnie [2003] 2 Cr. App. R. (S.) 34 and followed in the decision of R v Olubitan [2004] 2 Cr. App. R. (S.) 14. In R v Gibbons and McKechnie the four defendants had been convicted of conspiring to defraud credit card companies. The total loss to the credit card companies was in excess of £222,000 and at least 11 people had been involved in the conspiracy. The judge dealing with the confiscation proceedings had been provided with no information as to how the proceeds of the conspiracy had been divided up. The Court of Appeal held that dividing the total amount between the identified conspirators was as good a starting point as any in determining their benefit figures. The Court stated that in dealing with confiscation proceedings against a defendant a court may adopt the approach as laid down in those cases and apportion the total loss as between defendants / identified conspirators.

The facts of R v M were as follows. M had worked as a personal banker. She used her position to access customers' accounts and change address details. Thereafter new debit cards and PIN numbers were ordered. The accounts were then accessed and a total of £112,030.89 was taken. When arrested she made admissions in police interview as to her part in the fraud. She stated that she had been induced by another (F) to commit the offences. F and his two accomplices had used the debit cards to withdraw money and purchase high value goods. In return for her co-operation M had been promised £10,000 by F although she stated that she had never received that money. She eventually pleaded guilty to three offences of false accounting.

At her confiscation hearing the prosecution invited the court to adopt a "broad brush" approach on the basis that it was a case where one could not readily ascertain to whom or where the proceeds of the offences had gone but that the Appellant must have got something for her participation. In support of those submissions they relied upon the authority of R v Gibbons and McKechnie and the decision in R v Olubitan. The Recorder dealing with the case accepted the case as put by the prosecution and ordered confiscation in the sum of £28,000. The effect on the Appellant was that she would have to sell her family home.

The Court of Appeal disapproved of the Recorder's approach. The Court emphasised that the approach in R v Gibbons and McKechnie and R v Olubitan may be a proper approach to adopt depending upon the circumstances of the case. Where a defendant remained unhelpful in explaining how the offence was committed and where the proceeds had disappeared an equal division of the benefit amongst defendants may be an appropriate course to adopt. However, where a proper view of the evidence does not demonstrate that a particular defendant received any proceeds of a crime it would not be appropriate to adopt the approach of apportionment and make a confiscation order against that defendant.

The Court stated that in the case of R v Gibbons and McKechnie there had been evidence of movement of the money (the proceeds of the crime) to the conspirators but an assessment of the evidence could not ascertain how it had been divided. The prosecution still has to prove that a defendant has in fact received proceeds of a crime. This could be done by the drawing of inferences. In some cases the inference would be overwhelming and where a defendant had remained silent it might be difficult for that defendant to rebut such an inference. Where a court decides that a defendant has benefited the second stage is to determine the amount of the benefit. At that stage, apportionment may be appropriate depending upon the facts of the case.

In M's case, she had answered questions in interview and testified on oath before the Recorder. It was not wholly implausible that she had not received her ‘cut' from F despite her repeated demands to him. The officer in charge of the case had given evidence in cross-examination that she could not find any evidence of expenditure or receipt of money which could be said to be illegitimate. It was not sufficient to simply reject M's account and find that she must have received something from the crime. Albeit the burden upon the prosecution was to the civil standard they nevertheless had to prove that she had received proceeds from the crime. In M's case the prosecution had failed to establish in evidence that she had benefited. Therefore no issue as to apportionment arose.

Confiscation order quashed.

22 January 2008

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