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Proceeds of Crime Act 2002

Section 283: Compensation

392.This section deals with the case where any property has been made subject to an interim receiving order, or in Scotland an interim administration order, but has not in the end been held to be recoverable or associated property, either because the court has so determined or because the claim or the application has been withdrawn. Subjection to the interim receiving order or interim administration order may, despite the duties of the interim receiver or interim administrator to preserve its value, have resulted in losses to the owners of the property.

393.Under subsection (1), the person whose property it is may apply to the court for compensation for such losses; under subsection (5), the court may order the enforcement authority to pay compensation. Under subsection (2), no application for compensation may be made if the right of the victim has defeated that of the enforcement authority by virtue of section 281, or if an order has been made following an agreement by virtue of section 276.

394.An application must be made within three months of the date on which the court makes a decision the effect of which is that a recovery order cannot be made (subsection (3)). If an application is made for leave to appeal, the three months is to run from the date the appeal proceedings are finally concluded; or the date the application for leave to appeal is withdrawn or refused. In England and Wales and Northern Ireland, if the proceedings are discontinued, an application must be made within three months of the date on which they were discontinued (subsection (4)).

395.Subsections (6) to (8) provide for compensation in respect of rights of pre-emption etc which have become inoperable when the property to which they relate vests under a recovery order.

396.Subsection (9) provides for the measure of compensation to be at the court’s discretion, having regard to the losses suffered and to all other circumstances. If therefore the claimant has himself contributed to the losses through delays, for example, that may be taken into account here.

Section 284: Payment of interim administrator or trustee (Scotland)

397.This section makes provision for the payment of interim administrators and trustees for civil recovery in Scotland by the Scottish Ministers. No such provision is considered necessary in relation to England, Wales and Northern Ireland where it is envisaged such matters will be regulated by contract.

Section 285: Effect of diligence on recovery order (Scotland)

398.Section 285 clarifies the relationship in Scots law between the vesting of recoverable property in the hands of the trustee for civil recovery and any other action that might be taken by a creditor against the property to enforce a court order that he has obtained against the respondent. The section makes it clear that any such action against property executed after it has been vested in the trustee for civil recovery is ineffectual. In other words, once recoverable property is vested in the trustee, any other enforcement action (diligence) executed thereafter in relation to that property falls.

Section 286: Scope of powers (Scotland)

399.The section provides that the Court of Session may make an order in respect of a person whether or not he is domiciled, present or resident in the United Kingdom. No similar provision is required in respect of England, Wales and Northern Ireland, due to the jurisdiction of the civil courts and the general provisions on property in section 316.

Section 287: Financial threshold

400.Subsection (1) provides that the enforcement authority may not take proceedings for a recovery order unless it reasonably believes that the total value of the recoverable property is not less than an amount to be specified in an order. This ensures that civil recovery will not be used in minor or trivial cases. The order will be made by the Secretary of State following consultation with Scottish Ministers (subsection (2)). The threshold applies only at the time the enforcement authority starts proceedings, or applies for an interim receiving order or interim administration order (subsection (3)). As long as the threshold is observed at the start of the proceedings, it will not matter if for example the Director subsequently discontinues proceedings in respect of certain property and the value of the remaining property is less than the amount specified in the order. The proceedings will be able to continue (subsection (4)).

Section 288: Limitation

401.Subsection (1) sets a limitation period within which proceedings for a recovery order must be brought, through an amendment to the Limitation Act 1980. Proceedings must be brought within twelve years of the original property being obtained through unlawful conduct.

402.Subsections (2) and (3) make equivalent provision for Scotland and Northern Ireland.

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