Mr Andrewes obtained senior positions at a hospice and two NHS trusts using fabricated qualifications and experience. He performed the roles competently for over ten years. The Supreme Court held that confiscation of all net earnings was disproportionate, but confiscating the profit from the fraud (the difference between earnings obtained and earnings he would otherwise have earned) was proportionate.
Background
Jon Andrewes applied for the post of Chief Executive Officer at St Margaret’s Hospice in 2004 using an application form containing wholesale fabrications regarding his academic qualifications and employment history. He claimed degrees from Bristol and Edinburgh Universities, a PhD from Plymouth University, and a professional accounting diploma — none of which were true. His claimed employment history was similarly false or heavily inflated. Andrewes was appointed at an initial salary of £75,000 per annum and remained in post until 2015. During this period, he also obtained remunerated appointments as a non-executive director (later Chair) of Torbay NHS Care Trust and Chair of the Royal Cornwall NHS Hospital Trust, using corresponding false representations.
Despite the fraudulent basis of his appointments, Andrewes performed his roles competently. He was regularly appraised as either strong or outstanding, and the Chair of Trustees at the hospice confirmed that significant progress had been made under his leadership. When the truth emerged in 2015, his employment and appointments were terminated.
In January 2017, Andrewes pleaded guilty to one count of obtaining a pecuniary advantage by deception (Theft Act 1968) and two counts of fraud (Fraud Act 2006). He was sentenced to two years’ imprisonment. Confiscation proceedings followed under the Proceeds of Crime Act 2002 (POCA).
The Confiscation Proceedings Below
Recorder Meeke QC determined that Andrewes’ benefit from his criminal conduct comprised his net earnings (after tax and national insurance) totalling £643,602.91 across the three positions. The available amount (and hence recoverable amount) was agreed at £96,737.24. A confiscation order was made for that sum. The Recorder rejected arguments that Andrewes had not benefited or that confiscation would be disproportionate, reasoning that the recoverable amount represented less than 15% of the total benefit figure.
The Court of Appeal allowed Andrewes’ appeal, holding that confiscation was disproportionate under the proviso in section 6(5) of POCA. It reasoned that because Andrewes had performed the services satisfactorily and given full value for his remuneration, confiscation would constitute impermissible ‘double recovery’ amounting to a penalty. Neither party had supported the Recorder’s percentage-based approach, so no confiscation order was made at all.
The Issue(s)
The certified question was:
Where a defendant obtains remuneration as a result of or in connection with an offence of fraud based upon the obtaining of employment by false representations or non-disclosure, in what circumstances (if any) will a confiscation order based on the wages earned be disproportionate within the terms of section 6(5) of the Proceeds of Crime Act 2002, or contrary to Article 1, Protocol 1 of the European Convention on Human Rights?
The core issue was whether, in a ‘cv fraud’ case where the fraudster performs the agreed services competently, a confiscation order should strip the fraudster of all net earnings (‘take all’), none of them (‘take nothing’), or some intermediate amount.
The Parties’ Arguments
The Crown (Appellant)
The Crown’s primary submission was that confiscation of Andrewes’ full net earnings of £643,602.91 would not be disproportionate. It argued that the value of services performed should not be offset because they were equivalent to the costs of a criminal enterprise and did not constitute restoration of value. Only the limitation of the recoverable amount to £96,737.24 prevented a higher order.
Mr Andrewes (Respondent)
The respondent submitted that any confiscation order would be disproportionate, as he had given full value for the remuneration received through his competent performance of the services. Confiscation would therefore constitute double recovery amounting to an impermissible penalty, consistent with the principles in R v Waya.
The Court’s Reasoning
The Legal Framework
The Court examined the proviso in section 6(5) of POCA, inserted by the Serious Crime Act 2015 following R v Waya [2012] UKSC 51. It confirmed that the proportionality test under section 6(5) embraces Article 1, Protocol 1 of the ECHR, and that these are not two independent tests. The focus is on ‘proportionality stricto sensu’: whether confiscation of the recoverable amount is a proportionate means of stripping the criminal of the fruits of crime. The legal burden of proof rests on the prosecution.
Rejection of the ‘Take All’ Approach
The Court rejected the Crown’s primary submission. Although the performance of services was not restoration as such (since services can never be restored in the way money or goods can), the position was held to be analogous to restoration:
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.
The Court drew a critical distinction, however, for cases where the performance of services is itself illegal — for example, where a person obtains a job as a surgeon or airline pilot by lying about possessing the necessary licence or qualifications. In such cases, confiscation of full net earnings would not be disproportionate because the services have no value the law should recognise as valid.
Rejection of the ‘Take Nothing’ Approach
The Court equally rejected the respondent’s submission and the Court of Appeal’s reasoning. While Andrewes had performed the services competently, the employers had sought to appoint a person of honesty and integrity, and Andrewes would not have obtained the positions had the truth been known. To make no confiscation order at all would allow the fraudster to profit from his crime.
The ‘Middle Way’
The Court adopted a principled intermediate approach. The relevant benefit from the fraud that it is proportionate to disgorge is not the full net earnings but rather the difference between the higher earnings obtained through the fraud and the lower earnings the defendant would have earned without committing the fraud. This represents the ‘profit’ made from the cv fraud, analogous to the approach in R v Sale [2013] EWCA Crim 1306.
Lord Hodge and Lord Burrows explained the practical application:
In many and perhaps most situations of cv fraud, it will be appropriate, as a pragmatic approximation of the relevant profit, simply to take the 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.
The Court stressed that detailed evidential or accounting exercises would be inappropriate for confiscation orders, where clear rules and a broad-brush approach are necessary to avoid complicating Crown Court proceedings.
The Court rejected arguments that this approach produced arbitrary outcomes (for example, where the defendant had been previously unemployed or working part-time), noting that the correct touchstone is what the defendant would otherwise have continued to earn, not a temporary prior state.
Application to the Facts
Andrewes had been earning £54,361 gross in 2004 before obtaining the hospice position at £75,000 gross — a difference of 38%. On a broad-brush basis, a proportionate confiscation order would be 38% of £643,602.91, amounting to £244,569. Since the recoverable amount of £96,737.24 was far below that figure, confiscating £96,737.24 was proportionate.
The Court noted an important qualification regarding where the proviso directs attention:
It is important to recall that the proviso in section 6(5) of POCA instructs the court to address the proportionality question in relation to the recoverable amount rather than the benefit obtained. This will sometimes operate to simplify the task of the Crown Court judge.
Limits of the ‘Middle Way’
The Court confirmed that the middle way would not apply where the performance of services constitutes a criminal offence, because in such cases the employee has not provided restoration by performing valuable services. A ‘legal bar’ to appointment short of criminality (such as ‘fit and proper person’ requirements) would not, however, justify the take-all approach, as the law can still place a value on the services provided.
Practical Significance
This decision provides authoritative guidance on confiscation in cv fraud cases under POCA. It establishes a principled ‘middle way’ between confiscating all net earnings and confiscating nothing: the court should confiscate the profit from the fraud, measured by the difference between the earnings obtained through deception and those the defendant would otherwise have earned. The decision avoids treating competent performance of lawful services as worthless while ensuring fraudsters cannot retain the financial advantage of their dishonesty. The broad-brush methodology endorsed is designed to be workable in the Crown Courts without complex accounting exercises. The judgment also clarifies that where the performance of services is itself criminal, full confiscation of net earnings remains proportionate.
Verdict: The Supreme Court allowed the Crown’s appeal and restored the confiscation order of £96,737.24 made by Recorder Meeke QC, holding that this sum was proportionate under section 6(5) of POCA. The linked compensation order was not restored, as there was no clear evidential basis for it.
