R v Andrewes  UKSC 24 (on BAILII).
This appeal arose in the context of “CV fraud” and the confiscation regime provided by the Proceeds of Crime Act 2002. The fraudster performs the agreed services satisfactorily and is paid the agreed salary until the fraud is discovered. On a conviction for fraud, should there be a confiscation order stripping the fraudster of his or her earnings?
On this occasion Mr Andrewes obtained a position as CEO at a hospice and later was appointed as a non executive director at Torbay NHS Care Trust and as chair of the Royal Cornwall NHS Hospital Trust. His applications contained a number of falsehoods, including claiming that he had obtained a Ph D qualification.
He later pleaded guilty to charges of obtaining a pecuniary advantage by deception and of fraud. Following sentencing there was a confiscation hearing, It was held that Mr Andrewes’ benefit from his particular criminal conduct comprised the earnings he received from his employment and the two NHS appointments. Orders were made for repayment of the net income he had received.
Before the Supreme Court the focus was on disproportionality under the proviso in section 6(5) of POCA. The Court held at :
Although the performance of the services was not restoration as such – services can never be restored in the same way as money or goods (ie specific restoration of services is impossible) and, in any event, the services have normally been performed prior to the receipt of earnings so that the language of restoration is inapt – the position is analogous. If the confiscation order did not reflect a deduction for the value of the services rendered, while requiring the defendant to repay the net earnings, the order would constitute double recovery or what can most accurately be labelled “double disgorgement”. Double disgorgement goes beyond disgorgement and constitutes a penalty. That would be disproportionate. In this respect, we agree with the reasoning of the Court of Appeal.
The Court however distinguished illegality cases (using medical practitioners as an example), saying at :
It is very important to add that we put to one side cases where the performance of the services is illegal. Say, for example, a person is appointed to a job as a surgeon or airline pilot or HGV driver because he or she has lied in the job application about having the necessary qualifications or licence to be appointed to that job. In that situation, the performance of the services by that person would constitute a criminal offence and it would not be disproportionate to confiscate the full net earnings because the performance of those services has no value that the law should recognise as valid. There is no lawful market for the performance of those services by that person. Confiscation of the full net earnings would not therefore constitute double disgorgement.
The Court concluded at :
… It will be proportionate to confiscate the difference between the higher earnings made as a result of the cv fraud and the lower earnings that the defendant would have made had he or she not committed the cv fraud. In many situations of cv fraud, it will be appropriate, as a pragmatic approximation of that profit, simply to base it on the percentage difference between the fraudster’s initial salary in the new job obtained by fraud and the fraudster’s salary in his or her prior job