R v Ahmad [2014] UKSC 36

The Supreme Court considered how confiscation orders under the Proceeds of Crime Act 2002 should be made against multiple conspirators who jointly obtained criminal proceeds. It held each defendant is liable for the full amount, but enforcement must be limited to prevent double recovery.

Facts

Two conjoined appeals concerned post-conviction confiscation orders against groups of fraudsters who had jointly obtained property through criminal conduct.

The Ahmad appeal

Shakeel Ahmad and Syed Ahmed were convicted of a VAT carousel fraud involving the fictitious import and re-export of computer processing units through a chain of companies, including their company MST. HMRC’s loss was £12.6m. Following a 30-day confiscation hearing under the Criminal Justice Act 1988, Flaux J found the defendants had jointly obtained the fraudulent proceeds through MST. The Court of Appeal fixed the benefit, adjusted for inflation, at £16.1m, and ordered each defendant to pay that sum.

The Fields appeal

Michael Fields, Mitesh Sanghani and Karamjit Sagoo were convicted of conspiracy to defraud using a company (MDL) with falsified accounts to obtain goods and services on credit worth about £1.4m (£1.6m adjusted). The trial judge, under the Proceeds of Crime Act 2002, made confiscation orders against each defendant for the whole £1.6m. The Court of Appeal upheld those orders.

Issues

The core issue was: where multiple criminals jointly acquire property through crime, what is the proper approach in confiscation proceedings? Specifically:

• Whether each defendant should be treated as having ‘obtained’ the whole benefit (the first question);
• Whether the value of the benefit should be apportioned between conspirators (the second question);
• Whether liability should be joint and several, or full against each defendant, and how double recovery should be avoided (the third question).

Arguments

For the Ahmad defendants, Mr Mitchell QC accepted joint obtaining of £16.1m but argued that liability should be joint and several under common law, so that payment by one reduced the liability of the other, in order to comply with Article 1 of the First Protocol (A1P1) to the ECHR.

For the Fields defendants, Mr Owen QC argued more radically that the benefit should be apportioned equally between the three, so that each was liable for approximately £533,333, contending it was arbitrary and oppressive to hold each liable for the full sum.

The Crown contended that established authority (notably May, Jennings, Green, Waya, and Mackle) supported full liability against each joint obtainer.

Judgment

The first question: obtaining

The Court held that ‘obtain’ under section 76(4) of the 2002 Act does not connote strict legal ownership. Criminals do not acquire title to stolen property; they assume the rights of an owner. Where property is acquired through a joint criminal enterprise, it is often appropriate to conclude that each conspirator obtained the whole. However, judges should investigate whether obtainings were separate or joint and not adopt joint obtaining from convenience. On the facts, Flaux J was entitled to conclude that the Ahmad defendants had jointly obtained the £12.6m, given the absence of reliable evidence about distribution and the mendacity of the defendants.

The second question: valuation

Once joint obtaining is established, the value of the benefit is the market value of the property obtained. Section 79(3) of the 2002 Act, which requires account to be taken of other persons’ interests, does not extend to unlawful claims of co-conspirators. The Court reaffirmed May, Green, Waya and Mackle, rejecting Mr Owen’s apportionment argument. The Court noted the Highwayman’s Case (Everet v Williams) to illustrate that courts will not adjudicate on the internal financial arrangements between criminals.

The third question: sum payable and A1P1

The Court accepted Mr Mitchell’s submission that enforcement of confiscation orders against multiple joint obtainers for the same proceeds would breach A1P1 by allowing the state to take the same proceeds twice, which would be disproportionate. The solution is to make full orders against each defendant, but subject to a proviso that the order cannot be enforced to the extent that the sum has been recovered under another confiscation order made in relation to the same joint benefit.

Implications

The judgment clarifies the approach in multi-defendant confiscation cases:

• Joint obtaining remains a valid conclusion where evidence supports it, and each joint obtainer is liable for the full benefit;
• Judges should nevertheless consider carefully whether obtainings were joint or several, and not adopt joint obtaining reflexively;
• Valuation follows market value of what has been misappropriated, not the value of any ‘interest’ of the defendant, and does not require apportionment;
• To comply with A1P1, confiscation orders against multiple joint obtainers must include a mechanism preventing double recovery by the state.

The decision preserves the deterrent ‘severe regime’ of the 2002 Act while accommodating the proportionality requirements of A1P1. It affirms the guidance in May, Green, Waya and Mackle, while introducing an important qualification in enforcement. The judgment matters to prosecutors, criminal practitioners, and defendants in complex frauds and drug conspiracies, where identifying the distribution of proceeds is often impossible. The Court acknowledged the practical difficulties in confiscation hearings and rejected approaches that would enable unscrupulous defendants to evade liability by pointing to unidentified co-conspirators. The Court left open the possibility, in appropriate cases, of staying enforcement pending later related trials, and noted that lifestyle-based orders require separate consideration.

Verdict: The Supreme Court allowed both appeals only to the limited extent of directing that the confiscation orders be amended to provide that they are not to be enforced to the extent that a sum has been recovered by way of satisfaction of another confiscation order made in relation to the same joint benefit. The quantum of each order (£16.1m for each Ahmad defendant and £1.6m for each Fields defendant) was upheld.

Source: R v Ahmad [2014] UKSC 36