The Crime and Policing Act 2026 (“CPA”) has been introduced to, inter alia, reform the confiscation scheme under the Proceeds of Crime Act 2002 (“POCA”) and the way in which defendants should be deprived of the proceeds of their ill-gotten gains.
We examine just three of the principal reforms: the introduction of a statutory objective for the confiscation regime, the codification of hidden property, and the creation of compensation directions for victims.
Confiscation Reform Amendments
The changes introduce a number of welcome amendments to POCA, including allowing uplifted confiscation orders to be directed back toward victims and making a new legislative provision for the well-known and oft used concept of “hidden assets”.
Among other amendments, the CPA has:
- Codified the concept of “hidden assets” by clarifying how courts should approach assets that a defendant deliberately conceals from law enforcement.
- Ensured that hidden assets are still taken into account when calculating what the defendant should repay.
- Aimed to make confiscation orders more accurate and enforceable, so defendants cannot reduce their financial liability simply by concealing wealth.
- Improved enforcement powers so that, if hidden assets are later discovered, authorities can take steps to recover them.
Insertion of a Principal Objective
The CPA introduces a statutory objective for the confiscation regime for the first time. Sections 5A(2) to (5) of POCA now reads (emphasis added):
(2) The principal objective in exercising a power to which this section applies in relation to a defendant is to deprive the defendant of the defendant’s benefit from criminal conduct, so far as within the defendant’s means.
(3 )The defendant’s means are to be taken to include any tainted gifts made by the defendant.
(4) A court or person must exercise any power to which this section applies in the way which the court or person considers is best calculated to further the principal objective.
(5) The duty under section 2A(1) does not apply to the exercise by a relevant authority of a power to which this section applies if and to the extent that exercising the power in compliance with that duty would be inconsistent with doing so in compliance with the duty under subsection (4).
Section 2A of POCA specifies that a relevant authority (i.e. the Director of the SFO or DPP) must exercise its functions under POCA in the way which it considers is best calculated to contribute to the reduction of crime. However, the courts must now exercise their confiscation powers in a manner best calculated to further the objective define by s.5A, with the new objective taking precedence where it conflicts with POCA’s general crime-reduction objective.
The principal objective is to deprive a defendant of their benefit from crime, so far as within their means, thus providing emphasis on proportionality.
“Hidden Property”
In confiscation proceedings, the burden is on the defendant to show that they do not have the assets to satisfy a confiscation order. Under the previous regime, where a defendant’s assessed benefit from crime was greater than the value of their known realisable assets, the court could make what is commonly called a “hidden assets” determination. In effect, the unexplained difference was treated as representing assets that the defendant has hidden and which remain available to satisfy the confiscation order.
Section 9A now places this mechanism into a codified form. The statutory annotations for section 9A indicate that it is not intended to create an entirely new concept of hidden asset but simply places the existing judicial approach onto a statutory footing and clarifies how courts should deal with the unexplained difference.
Section 9A of POCA now defines “hidden property” as follows:
“9A Hidden property
(1) This section applies where it appears to a court calculating the available amount that—
(a) the defendant’s benefit from the conduct concerned exceeds the total of the values (as at the time the confiscation order is made) of—
(i) all the free property then held by the defendant, and
(ii) all tainted gifts, and
(b) some or all of that excess is a result of property having been hidden by or on behalf of the defendant.
(2) The court must determine the total value of the property that the court considers has been hidden by or on behalf of the defendant.
(3) When making a determination under this section the court must, in particular, consider the extent to which there are other circumstances that may account for the excess mentioned in subsection (1)(b), for example—
(a) expenditure incurred by the defendant which has or may have been met from the defendant’s benefit from the conduct concerned;
(b) changes in the value of the property held by the defendant.”
Importantly, the new provision does not mean that every unexplained difference is automatically treated as hidden property. Under section 9A, the court must also consider whether there are other circumstances which could explain the difference between the defendant’s benefit from criminal conduct and the value of their available/realisable assets. So, the court is effectively required to ask: “Is there a genuine explanation for the shortfall, or does the evidence support the conclusion that assets have been concealed?”
The hidden-assets provision is intended to make confiscation orders more realistic and enforceable. According to the asset recovery statistical bulletin for the year end 2024,[1] as at, March 2024, the value of confiscation order impositions was at a 6-year high, with £307.9 million of confiscation orders imposed for the financial year ending March 2024. This was reported as an increase of 60% from £192.6 million in the previous financial year and an increase of 64% from the 6-year median (£187.7 million). However, recovery has been on the decline. £128.5 million was recovered, a 28% decrease from financial year ending March 2023 and 12% lower than the 6-year median amount recovered (£146.3 million). Whilst this may also be attributed to the increased use of civil forfeiture orders under POCA, the government has estimated that these confiscation reforms could generate additional £25.2 million to £126.1 million in recovered criminal assets over ten years, with a central estimate of £75.7 million.
Compensation to Victims
The CPA places a greater emphasis on compensating victims. Where a confiscation order is increased because a defendant is found to have additional assets, money that would previously have gone entirely to the state can instead be directed towards victims who hold an uncompensated loss.
Under section 22 of POCA, the Crown Court can, upon application by the prosecutor increase a confiscation order upon a reconsideration of the available amount. If the amount found under the new calculation exceeds the relevant amount the court may vary the order by substituting a new amount that it believes is just, but which does not exceed the benefit from the conduct concerned. Previously, where a s.22 POCA Order was made, there was no scope to direct monies back to uncompensated victims.
The CPA has now inserted section 22A which says (with emphasis):
22A Increased available amount: compensation directions
(1) This section applies where under section 22(4) a court varies a confiscation order so as to increase the amount required to be paid under the order.
(2) The court may make a supplementary compensation direction if—
(a) a compensation order has been made against the defendant in respect of the offence (or any of the offences) concerned, and
(b) at the time the compensation order was made, the amount of the compensatable loss that had been sustained by the person in whose favour it was made was greater than the amount required to be paid by the compensation order.
(3) A supplementary compensation direction is a direction that so much of the amount recovered under the confiscation order as the court considers appropriate is to be paid to the person in whose favour the compensation order was made.
…
(7) A compensation direction is a direction that so much of the amount recovered under the confiscation order as the court considers appropriate is to be paid to the person mentioned in subsection (6)(a).
…
(10) In this section—
…
“compensatable loss” means personal injury, loss or damage of a kind in respect of which a compensation order could have been made;
Thus, where:
- a confiscation order was originally made for less than the defendant’s assessed benefit because they did not have sufficient assets at the time;
- the defendant subsequently acquires or is discovered to have additional assets;
- the court increases the amount payable under the confiscation order as a result of a new calculation of available amount; and
- a victim still has an uncompensated loss that was assessed during the original proceedings,
the court can make a “compensation direction”, directing some or all of the newly recoverable money to the victim instead of simply applying it towards the confiscation order. However, this jurisdiction is limited to victims who already have been recognised and assessed during the original confiscation proceedings (new victims therefore cannot be brought into the proceedings). Further, the amount must be capped to the victim’s originally assessed loss. The amendments strengthen the priority given to victims in the confiscation regime.
Conclusion
The CPA seeks to make crime less financially rewarding by improving the recovery of criminal assets and strengthening compensation for victims. The amendments are a welcome addition to POCA.
Mai Holdom – Confiscation Reforms – September 2026.
If you need advice on any aspect of confiscation reforms, proceedings or asset recovery, then please contact our specialist team here.
[1] Asset recovery statistical bulletin: financial years ending 2019 to 2024 – GOV.UK
