Proceeds of crime and the presumption of innocence

Gale & Anor v Serious Organised Crime Agency [2011] UKSC 49 (26 October 2011) Summary

Approximately £2 million worth of property was confiscated from the appellants, on the basis that it was the fruit of drug trafficking, money laundering and tax evasion.

Under Article 6(2) of the European Convention on Human Rights, the United Kingdom Supreme Court held that the appellants’ criminal conduct was to be proved on the balance of probabilities, and not beyond reasonable doubt. It was held that the proceedings were civil in nature and did not share a procedural link with previous criminal proceedings brought against one of the appellants in Portugal and Spain.

Facts

The Proceeds of Crime Act 2002 (UK) provides for confiscation of assets if the court is satisfied on the balance of probabilities (the civil standard of proof) that the assets were obtained by unlawful conduct.

At first instance, the British Serious Organised Crime Agency (“SOCA”) obtained an order against the appellants for confiscation of property to the value of £2 million. SOCA satisfied the primary judge that the property was the proceeds of drug trafficking, money laundering and tax evasion in various countries.

On appeal to the Supreme Court of the United Kingdom, the appellants relied on the fact that David Gale had been acquitted of drug trafficking in Portugal, and criminal proceedings against him had been discontinued in Spain. They argued that unlawful conduct had to be proved beyond reasonable doubt (the criminal standard of proof), otherwise the proceedings violated article 6(2) of the European Convention on Human Rights. Article 6(2) provides: “Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.”

Decision

The Supreme Court unanimously dismissed the appeal.

Lord Phillips examined previous decisions of the European Court of Human Rights on article 6(2). Although his Lordship found it difficult to identify a unifying principle underlying the cases, he concluded firstly that the existence of a “procedural connection” between the previous criminal trial and the subsequent civil proceedings was relevant. If such a connection existed, the criminal conduct would have to be proved beyond reasonable doubt for the civil claim to succeed. His Lordship held that there was no procedural link between the Portuguese trial and the current proceedings. Further, the British court was permitted to consider evidence that formed the basis of the Portuguese charges.

An alternative route to violation of article 6(2) was if public authorities (for instance, the court) suggested that an acquitted defendant might nonetheless have been guilty. His Lordship could identify no such suggestion on the facts.

The other justices broadly agreed with Lord Phillips. In concluding that no procedural link existed, Lord Dyson remarked that the Act provides for free-standing proceedings that can be brought whether or not there has been a criminal trial.

Relevance to the Victorian Charter

Section 25(1) of the Victorian Charter contains similar wording to article 6(2): “A person charged with a criminal offence has the right to be presumed innocent until proved guilty according to law.”

In Momcilovic v The Queen (2011) 280 ALR 221; [2011] HCA 34, at paragraph 52 French CJ tentatively indicated that s 25(1) may extend to “prejudicial pre-trial statements and proceedings for the award of costs or compensation for detention on remand following discontinuance of criminal proceedings or acquittal”. However, this comment was in passing, as Momcilovic concerned the principle that the prosecution bears the burden of proof in criminal proceedings.

The principles discussed in Gale appear relevant to various types of civil claims, such as a compensation claim by the defendant for being remanded in custody; disciplinary proceedings against the defendant by a professional body or employer; and damages claims by victims.

However, the utility of the case itself may be limited. The justices found the prior ECHR cases confusing and difficult to interpret. Much ambiguity surrounds the requirement of “procedural connection”, and the efforts of Lord Phillips in particular to flesh out a unifying principle were limited by the facts in issue. If there ever was a case where two proceedings lacked a procedural connection, this was it – the previous criminal trial and subsequent civil proceedings took place in different jurisdictions. Accordingly, the justices rightly suggested that it would be desirable for the Grand Chamber of the ECHR to clarify and rationalise “this whole confusing area”.

The decision can be found online at: www.bailii.org/uk/cases/UKSC/2011/49.html

Sylvester Urban is a lawyer with the Mallesons Stephen Jaques Human Rights Law Group