Question to the Ministry of Justice:

To ask the Secretary of State for Justice, what was the total amount of impairment from confiscation orders in each year since 2013.

Confiscation orders are the principal means by which the government carries out its policy to deprive criminals of the proceeds of their crime. They are used with the intent to disrupt and deter criminality. Confiscation orders are not punitive in nature but are designed to require the defendant to pay back the proceeds of their crime and to thus deprive them of the benefit of their crime.

A confiscation order is issued against an individual after they have been convicted of an offence, ordering them to pay back the amount that the court has determined they had benefited from their crime. The confiscation order name is a misnomer as nothing is confiscated. The court will determine the amount of the benefit received based upon the relevant criminal conduct. In determining the benefit amount the court can take into consideration all the financial assets of the defendant including gifts, “hidden assets” and the “criminal lifestyle” of the defendant. By including the value of assets such as those classed as “hidden” or “gifts”, the aim of the court is to effectively deprive the defendant of their use and take them out of circulation. The court will then determine the available amount which may be less than the benefit amount. The court may allow a limited time for the confiscation order to be paid, in the event of non-payment the outstanding balance on the order will begin to accrue interest at a rate of 8% per annum, with interest continuing to accrue until the order balance is paid in full. In addition, the defendant will be required to serve a default prison sentence for non-payment, the serving of the prison sentence does not reduce the amount of the confiscation order that is due to be paid nor does it stop interest accruing.

The impairment charge, as reported annually in the HMCTS Trust Statement, is an accounting estimate of the outstanding impositions which has been assessed as theoretically unrecoverable. The charge reduces the value of the overall debt to an amount that HMCTS has estimated, for accounting purposes only, to be recoverable and ensures that the Financial Statements do not value the debt at more than is potentially collectable.

The impairment charge and resulting net book value figure are solely accounting estimates and do not reflect the value of the impositions that is being enforced by HMCTS and the other Agencies, such as the Crown Prosecution Service and the Serious Fraud Office. All the agencies associated with the enforcement of confiscation orders continue to enforce the full value of the impositions imposed by the Court.