It has often been said that the Proceeds of Crime Act 2002 (POCA) was designed to be deliberately draconian. However, key changes to POCA introduced in the Crime and Policing Act 2026 (CPA) suggest that POCA may be moving in a different direction. Regulatory specialist Ian Anderson examines the key changes to POCA and what this means for corporate defendants.

What are confiscation orders?

Confiscation orders operate to remove the defendant’s financial benefit from offending by requiring the defendant to pay a sum of money. They are split into two parts:

1) the ‘benefit figure’ which is the value ascribed to the criminal offending – in a simple case of theft, this would be the value of the goods stolen; and
2) the ‘realisable amount’ which is the net total of the defendant’s assets.

If a defendant’s realisable amount was higher than the benefit figure, the confiscation order would be for the benefit figure.

If the realisable amount was lower, the confiscation order would be for the realisable amount. However, in those cases the remainder of the benefit figure would ‘hang over’ the defendant and could be recovered later by reopening the case. This was often a problem for defendants who accrued assets later in life, having accepted a confiscation order with a low realisable amount and a high benefit figure. The way the benefit figure was calculated was the most draconian aspect of the confiscation regime, and this has been addressed by CPA.

The changes

1. Prosecutorial discretion

Before the CPA

The Court would automatically determine whether a defendant had a “criminal lifestyle” using a statutory test. If the offence appeared on the list of lifestyle offences (which includes drug trafficking, money laundering, counterfeiting and blackmail), or was committed over at least six months, then it was assumed that all property, money or assets transferred to the defendant, and all expenditure incurred, for the previous six years came from criminal conduct. It was also assumed that all property held by the defendant (at any time) derived from crime and was free of any other legal or financial interests. All of the assumed benefit was added to the benefit figure.

This led to defendants who benefitted minimally from an offence itself to receive a benefit figure including their entire income and spending for six years and the value of all of their property, plus the value of the particular criminal conduct. The defence then was required to prove the legitimacy of every transaction, asset and third-party interest for the defendant’s worldwide assets, or face a mind-bendingly disproportionate confiscation order with a benefit figure which could never be repaid in full.

After the CPA

The statutory test is no longer automatic, and prosecutors have discretion over whether “criminal lifestyle” applies. If the prosecution does not instruct the Court to determine criminal lifestyle, then it must assess any benefit from their particular criminal conduct only, regardless of the offence or circumstances. The Court also retains a discretion to decide to disapply the lifestyle provisions.

The Court also must give “appropriate weight” to any explanation by the defendant for being unable to provide evidence to rebut the lifestyle assumptions and evidence about any “serious risk of injustice” which applying the assumptions would cause. This will assist defendants who cannot produce documentation due to the passage of time or destruction of records but have a cogent explanation about their lifestyle and wealth.

Key takeaway: It is hoped that this will lead to benefit figure calculations which are proportionate to the circumstances of the offence and defendant. However, it will require the prosecution to examine individual defendant roles and involvement in offences and make sensible, proportionate decisions.

2. Additional lifestyle offences

As above, certain “criminal lifestyle” offences automatically trigger the assumptions around income and property. CPA has added environmental offences including the unlawful deposit of waste and operating a regulated waste facility without a permit to the list. Both offences are regularly prosecuted on the basis of directors or landowners’ consent, connivance or neglect in permitting waste crime to occur, alongside those who are actually operating the sites.

This is not good news for directors and shareholders in businesses which operate without the correct environmental permits or exemptions, or for landowners who allow such activity to take place on their land. A conviction for an environmental offence on the basis of negligence could lead to the lifestyle assumptions being applied and to joint benefit being recoverable against an asset-rich defendant.

Key takeaway: The addition of additional offences could lead to dire consequences for landowners who either fail to keep track of activity on land or do not take action to stop waste crime.

3. Principal objective and judges’ discretion to reduce benefit figures

CPA has inserted a new statutory “principal objective” into POCA. The objective is to deprive the defendant of their benefit from criminal conduct, but, crucially, “only so far as within the defendant’s means”. The deliberate wording is a major departure from the previous aim to maximise recovery at all costs. Prosecutors and the court must exercise their powers in a way which is best calculated to further the principal objective. Defendants and their advisors now have a powerful tool to argue against the unjust figures which POCA calculations can produce.

Judges now have discretion to reduce benefit figures where applying the full amount would be “unjust”.

Key takeaway: Combining the principal objective with judicial discretion to disapply the lifestyle provisions, alongside having a mechanism to invoke judicial intervention based on fairness, should ensure defendants have more opportunity to challenge ‘unfair’ calculations of benefit at an early stage in proceedings, and offer defendants protection from confiscation orders being reopened later in life.

4. New rules around benefit figures

Where a defendant plays a limited role in an offence, for example acting as a temporary custodian for laundered money, the Court now has a specific power to intervene and reduce the benefit figure to an amount which is fair in the circumstances (including zero). This will be a useful tool for conspiracy offences, where defendants are routinely ascribed the entire value of the fraud as their benefit figure as a start-point.

Key takeaway: This could assist landowners and directors in environmental, health and safety and conspiracy to defraud offences where it can be shown that the role played was minimal in terms of financial benefit, although important enough in terms of enabling the commission of the offence to justify a prosecution.

5. Mortgage fraud cases

R v Waya (2012) is arguably the most important case in POCA history. Mr Waya was convicted of mortgage fraud. The Court ascribed the full value of his London flat as criminal benefit (which was the usual practice at the time). Mr Waya appealed against the benefit figure on the basis that it was disproportionate and the appeal court decided that the benefit calculation ought to comprise only the appreciation in property value proportionate to the percentage of the purchase price funded by the mortgage fraud and reduced the benefit figure by £1.1m. CPA has introduced the “Waya” formula in POCA for mortgage fraud cases.

Key takeaway: For mortgage fraud cases, confiscation orders now must be proportionate and not operate as a form of financial punishment. The calculation itself could perhaps be applied in other contexts where value has accrued but only part of the increase in value is contaminated by criminal activity.

6. Timetables and Early Resolution of Confiscation (EROC) meetings

CPA has introduced rules which require the Court to draw up a confiscation timetable either before or when sentencing the defendant. It is also now much clearer that where confiscation proceedings are commenced, the Court cannot impose a fine (or other financial order) on the defendant at sentence. We have noted examples of the Court misinterpreting the old rules, leading to defendants having to be re-sentenced to punishments other than a fine, and welcome this change.

The new EROC procedure will require the Court or the prosecutor to order that a meeting is held between the prosecution and the defendant to consider whether a confiscation order is required and amount to be paid.

Before CPA, meetings and negotiations to discuss POCA often took place, but they tended to be ad hoc and dependent upon the caseworkers involved in the case deciding to proactively manage proceedings (which was not always the case). We expect EROC meetings to be mandatory in almost every POCA case and they should lead to confiscation orders being agreed earlier in proceedings.

Interestingly, the Court now has the power to require or permit the attendance of persons who hold (or may hold) an interest in “key” property at EROC meetings. This could include business partners, spouses, lenders or trustees. Key property is defined as property held by the defendant that the court believes will need to be disposed of to satisfy any confiscation order.

Before the CPA, third parties have historically had to rely on section 10(a) of POCA to exert their interests in property or funds held by a defendant, and where this has not been clear-cut (e.g. property in joint names), the process has been frustratingly inconsistent and difficult to navigate.

Key takeaway: It should now be easier for defendants to engage with prosecutors and third parties to participate in proceedings, and the Courts will have powers to ensure that early resolutions are considered, which will hopefully lead to fairer outcomes and swifter justice.

POCA is a complicated process, and as an expert in corporate defence, Ian is here to help you navigate the new legislation. Get in touch with Ian Anderson at IanAnderson@schofieldsweeney.co.uk.