OPINION: The Proceeds of Crime Act 2002 (POCA) was designed to be draconian and rightly strip offenders of the proceeds of crime. It was introduced to remove financial incentive by depriving drug dealers of their ill-gotten gains. The Law Commission recently emphasised that the Act was not designed to punish offenders.
But that is precisely what the Environment Agency (EA) sought to do in a recent case of Graham Orchard heard in Truro Crown Court. It provides a glimpse into the heavy-handed approach of the Agency towards regulated facilities, whilst standing by and watching illegal sites turn into waste mountains posing imminent and actual harm to the environment.
Such was the high-handed approach of the Agency that it caused a Judge to unusually speak out at the POCA hearing, having earlier commented that Agency’s approach was “deeply depressing”.
The judge said: “It would be inhumane not to accept the defendants offer [£201,743]. I have to rule as I must on the law as it is – and not as I might wish it.
“I do ask the EA to go away one last time and think about if they want a public execution of this man to satisfy a few extra hundred thousand…I invite the Agency to consider this matter seriously so that I do not have to make a decision which will make us all feel a little less human.”
These comments were made following the Judge observing that the Agency were seeking to use the legislation in a way Parliament never intended. Of course, none of these comments appear in the Agency’s press release. The press release also failed to mention the Judge’s comments about the EA’s “shocking“ management of this site. More on this below.
How does the proceeds of crime work?
A Court calculates the “criminal benefit” from offending, including hidden assets, and then assesses the realisable assets available to satisfy the criminal benefit.
If the realisable assets are less than the criminal benefit, the order is limited to the sum of the realisable assets which effectively becomes a debt enforced like a fine. Failure to pay the debt will result in a term of imprisonment in default.
Appropriate use of legislation
We applaud the Agency using the legislation in appropriate cases. Take by way of example, John Bruce described by the sentencing judge as a “career criminal” (R v John Bruce [2021] Crim 1896). Mr Bruce was sentenced in May 2018 for operating an illegal waste site in Worcestershire for a period of three years. He was prosecuted for six offences where waste totalling circa 25,000 cubic metres (many hundreds of lorry loads of waste), including hazardous waste, was either dumped, buried or burned at the farm.
The burning posed a nuisance to local residents (there were 116 pollution incidents reported) and effluent leaked into the local water course. Mr Bruce received £348,000 in income from the illegally deposited waste and avoided £502,057.00 in landfill tax. The court heard that the defendant had grown his business and had invested in various properties, lands and cars. He owned a large selection of expensive items of heavy plant hire.
Significant unexplained income fell to be confiscated pursuant to the statutory assumptions under POCA. As a result, the Court made a confiscation order to reflect criminal benefit in the sum of £3,998,815.06 and ordered the defendant to pay £2,102,208.66 which reflected his realisable assets as assessed by the court.
Under the legislation, it was open to the EA to convert this confiscation order into a compensation order to fund clean up costs but this option was not exercised. The waste remains on site and it is unclear, what if any of the £2 million has been paid or whether Mr Bruce served a term of imprisonment in default of payment.
Recent ruling
By contrast in this recent case, Mr Orchard was described by the Court as a man of impeccable character.
All Mr Orchard had known all his life was the scrap metal industry. He left school aged 15 to join the family business then run by his grandfather and father. He learnt his trade from them and grafted in the family business. Over many years, the business has provided a valuable recycling business to the community in rural Cornwall. There were a number of character witnesses who were prepared to testify to Mr Orchard’s honesty, trustworthiness and work ethic.
Mr Orchard operated an end of life vehicle facility without complaint, however, as an adjunct to the business he and his father installed a furnace to recycle aluminium. The necessary consents were obtained and a consultant was engaged to assist with the commissioning of the plant. Mr Orchard had every intention to comply with the law. But it was the operation of the furnace that lead to Mr Orchard being in court.
Under the terms of the permit, the furnace required calibrating, daily recording of emissions and an annual report to the Agency. Mr Orchard found himself under immense financial pressure when funding his father’s cancer treatment. During this time, he cut corners by not having the furnace calibrated by a third party.
Instead he maintained the machine himself but supplied the same annual return to the Agency with figures at the back falsified giving the impression it had been calibrated externally. Had the Agency paid any attention to the reports at the time they were submitted as they were every year, it would have been immediately apparent that the same annual report was being recycled.
Further, the Agency made a number of visits to the site including on days when the furnace was operating (it only operated on limited days) and yet the allegation in relation to incorrect monitoring was not identified during any visit. The site officer did not understand how the furnace worked and Mr Orchard had to explain it to the officer. Data was sent to the Agency but Mr Orchard was told the Agency did not have the ability of open it.
Eventually, during Covid when someone conducted a desktop assessment, the false annual report was identified. This then focused the Agency attention on the site. In the circumstances, it is not surprising that the Judge commented that the Agency regulation of the site was shocking. Thankfully, there was no evidence of any actual environmental harm.
Heavy-handed use of the law
This was the first time that Mr Orchard found himself before the courts, aged 56, at what can only be described as an extremely difficult personal times for him – and yet he was treated by the Agency as a hardened criminal.
His father, who had been abusive, controlling and coercive was diagnosed with bowel cancer. He was given limited time to live. Mr Orchard managed to extend his father’s life by four years by funding private cancer treatment – but this also got him into debt.
Alongside working as hard as he could in the yard to keep the family business afloat and fund his father’s treatment, he was also sole carer for his dying father who would not permit anyone else to enter the house. Mr Orchard reached the lowest ebb in his life and life events took a toll on his mental health.
The judge in sentencing commented that Mr Orchard’s father was a strong and overbearing presence and his son simply did as he was told. His situation as dire. Mr Orchard had no partner to share his burden because his father did not permit him to have a family of his own. The only life Mr Orchard had known was life at Burnt House garage. He worked in the yard and lived in the cottage tithed to the business.
When his father died, in accordance with his father’s wishes, Mr Orchard made arrangements to have his father lawfully buried in the garden. Mr Orchard inherited the garage and the house. The belowphotos show the squalid conditions in which Mr Orchard lives. There is no bathroom, he showers in the yard. There is no kitchen, he relies upon hot meals provided by a friend. This is not a man living the high life on the ill gotten gains. But a man struggling to survive.
When his life story was relayed to the Court, you could hear a pin drop. It is fair to say, this is the saddest and most emotionally draining case we have worked on. Mr Orchard, as soon as he was interviewed, admitted his guilt. He knew what he had done was wrong. He felt ashamed. He co-operated with the Agency and pleaded guilty.
Following the guilty plea, the Agency sought to exercise the right invoke the POCA and to seek to confiscate the garage, stock and family home – effectively leaving Mr Orchard homeless, without a business or any means to support himself. In summary, wipe out his life and erase his family memories.
Mr Orchard accepted responsibility for falsifying the records and operating the furnace in breach of permit. The Court imposed punishment and marked its disapproval with a 10 month suspended prison sentence.
On any objective view, seeking confiscation of the family business established by Mr Orchard’s grandfather and the family home that had been built many years earlier, could only be viewed as additional punishment. Representations that pursuing POCA in the circumstances was disproportionate and unfair were simply met with disdain. Given that the Agency appears to pick and choose which cases they exercise their discretion under POCA, we found it astounding that this case, of all the cases we have ever worked on, the Agency felt that this was appropriate for the nature of the offence and the individual involved given the exceptional mitigating circumstances. We were therefore extremely grateful that the Judge stepped in and injected some sense of reality to the case and ensured that justice was done. During the two years it took to resolve the POCA, significant costs were incurred on both sides. The Court made no order for costs.
We hope that the Agency will reflect on this case and consider the Judge’s comments regarding their discretion of the use of POCA in future matters. Perhaps it will also bear in mind the House of Lords recent criticism of “heavy-handed regulation”.
Use of POCA
That is not to say that POCA should not be used in appropriate cases. Assuming arrests are made for Hoads Wood, Kidlington, Wigan (the list goes on), no doubt all tax payers would commend the Agency seeking a POCA order against the culprits for the ill gotten gains in illegally depositing waste and avoiding landfill tax and better still flipping the order to a compensation order to cover some or all of the clean up costs.
For clarification, it is not correct to report that Mr Orchard was “ordered to repay £1,271,034” as reported on gov.uk.
A confiscation order was made in the sum of £1,271,034 to reflect criminal benefit but Mr Orchard was ordered to repay £201,743, which reflected his realisable assets. This included £180,000 in a bank account, which Mr Orchard preserved during the court proceedings despite living in financial poverty and struggling to keep his business afloat to honour a promise he made to the judge to keep the funds available for the POCA order.
As the Judge commented, Mr Orchard’s conduct since the case has been in front of him was to his credit, which is perhaps not surprising for a man of impeccable character.
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