Strasbourg makes groundbreaking ruling that UK procedure under Proceeds of Crime Act violated Article 1, Protocol 1

For the first time, the European Court of Human Rights has ruled that confiscation proceedings under the Proceeds of Crime Act 2002 violated the right to peaceful enjoyment of property under Article 1 of Protocol 1 of the Convention (A1, P1).

 

The Applicant, Mr Paulet, had obtained employment by using a false passport. The case concerned whether the Crown should confiscate the wages of migrants who had used false documents in order to obtain work. The application to Strasbourg was, essentially, Mr Paulet’s appeal from what was then the leading UK authority from the Court of Appeal (Criminal Division) on the correct approach determining confiscation proceedings: R v Nelson, Pathak, and Paulet [2010] QB 678. Following submissions in Strasbourg, in R v Waya [2013] 1 AC 294, the Supreme Court made reference to the fact that this case was currently under consideration in Strasbourg.  

 

In its judgment in Paulet v UK (6219/08), delivered on 13 May 2014, the Strasbourg Court rejected the Government’s argument that Mr Paulet had failed to exhaust domestic remedies. It held that the Court of Appeal erred in holding that courts should interfere with confiscation orders “sparingly”. Although the Court of Appeal asked in the present case whether the order was in the public interest, the Strasbourg Court held that they erred because “they did not go further by exercising their power of review so as to determine whether the requisite balance was maintained in a manner consonant with the applicant’s right to ‘the peaceful enjoyment of his possessions’, within the meaning of the first sentence of Article 1”. The Court concluded that “the scope of the review carried out by the domestic courts was too narrow to satisfy the requirement of seeking the “fair balance” inherent in the second paragraph of Article 1 of Protocol No. 1.”

 

The judgment is also of general importance because it draws attention to the implicit procedural guarantees in A 1, P1, breach of which may lead to a violation of the substantive article.

 

The Court awarded Mr Paulet damages of EUR 2000 since “the Court recognises that the applicant must have suffered some anguish and frustration as a result of the failure of the domestic courts to conduct a Convention-compliant review of the confiscation order”.

 

Mark Henderson and Alison Pickup were counsel for Mr Paulet, instructed by Keith Lomax of Lester Morrill.

 

Read the full judgment here

 

To read the European Court of Human Rights’ press release click here.

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