Supreme Court affirms confiscation from lying applicant
A job applicant convicted of fraud after lying about their qualifications and experience may have a confiscation order made against them relating to the additional earnings obtained as a result of the fraud, the UK Supreme Court ruled today – reversing the Court of Appeal which had held that such an order would be disproportionate in terms of s 6(5) of the Proceeds of Crime Act 2002.
Lord Hodge (Deputy President), Lord Kitchin, Lord Hamblen, Lord Burrows and Lord Stephens unanimously allowed an appeal by the Crown, which had sought an order against Jon Andrewes, former CEO at St Margaret’s Hospice, Taunton.
Mr Andrewes successfully applied for the CEO position in 2004, having falsely claimed that he had university degrees, as well as significant relevant work experience. He remained in post until March 2015 when his employment was terminated. He would not have been appointed had the truth about his education and job experience been known. In 2006, he told staff that he had obtained a PhD from Plymouth University that he had been working towards, which was also untrue, and insisted that he should thereafter be referred to as Dr Jon Andrewes. During his time as CEO, he regularly received good appraisals.
Using the same or similar lies, he was also appointed to two remunerated roles as a director and then chair of the Torbay NHS Care Trust and chair of the Royal Cornwall NHS Hospital Trust. In January 2017 he pleaded guilty to one count of obtaining a pecuniary advantage by deception and two counts of fraud, and was sentenced to two years’ imprisonment, following which the Crown sought the confiscation order.
Mr Andrewes’ full net earnings during the relevant period were £643,602.91. The “recoverable amount” was agreed to be £96,737.24, and the judge ordered confiscation of that sum. The Court of Appeal allowed Mr Andrewes’ appeal, but certified the question of whether a confiscation order in such circumstances would be disproportionate as a point of law of general public importance.
In a joint judgment Lord Hodge and Lord Burrows, with whom Lord Kitchin, Lord Hamblen and Lord Stephens agreed, said that as a starting point, it would be disproportionate to make a confiscation order of the full net earnings in this case. To do so without making any deduction for the value of the services rendered would amount to “double confiscation” and a penalty. Importantly, this reasoning would not extend to cases where the actual rendering of services was illegal, for example if a surgeon performed operations without the required qualifications. In such a scenario, it would not be disproportionate to confiscate the full net earnings.
However, contrary to the decision of the Court of Appeal, it would also be unacceptable for no confiscation order to be made. When considering proportionality, the court should seek to confiscate the difference between the higher earnings obtained through fraud and the lower earnings that would have been obtained had there been no fraud. As such, Mr Andrewes would have to give up any “profit” he made through his lies, but account would be taken of the fact that his employers did receive value in the form of services rendered, in exchange for paying his salary. This would be a principled “middle way”, in contrast to the “take all” approach of the Crown or the “take nothing” approach of the Court of Appeal.
Applying this principle to the facts, a confiscation order of £244,568 would be proportionate, but as, on the facts, the recoverable amount was only £96,737.24, a confiscation order of that amount was proportionate.