Stuart Andrews, Partner, Eversheds LLP:
In this post, Stuart Andrews, a partner at Eversheds LLP, outlines an innovative tool available to local authorities to crack down on abuses of the planning system.
Effective planning enforcement: the problem
Commencing enforcement action against those that have infringed planning law by the service of appropriate notices is the local authority’s last resort, often following a long history of correspondence, invitations to submit appropriate planning applications, negotiations, and in some cases every known tactic to delay the local authority in its attempt to achieve compliance with the planning regulations. Where, in these circumstances, enforcement notices are still ignored criminal prosecution is the only sanction remaining.
However, there is limited satisfaction for the planning authority in pursuing such prosecutions. The costs are not insubstantial, and the fines handed down on conviction are often insignificant compared with the profits available (either potential or actually realised) as a result of the activities related to those planning breaches.
A potential solution
A pioneering new tool in the armoury of the planning enforcement officer can be used to redress the imbalance. The London Borough of Hounslow recently issued confiscation proceedings under the Proceeds of Crime Act 2002 (the Act) in the Crown Court when a landlord who converted two dwellings into seven flats failed to comply with enforcement notices issued. The application resulted in a confiscation order of over £186,000 in the Council’s favour in respect of the sum that the landlord had benefited. The landlord was given six months to pay and could face a prison term of two and a half years if he fails to do so.
The sum recovered will be divided with 50 per cent going to the Treasury and the remainder being split between the collection agency and the Council’s investigation team.
How is this possible?
While a breach of planning control is generally not, in itself, a criminal offence, such activities can become criminal where they continue to occur in breach of a valid effective enforcement notice. If the notice is not complied with then the local planning authority has a number of statutory remedies it can rely on, including prosecution or carrying out the works specified in the notice themselves and recovering the cost of doing so from the landowner.
The Act provides that, following conviction of a criminal offence, under certain circumstances, a confiscation order may be made in order that the authorities may recover any proceeds of crime. In the context of planning enforcement, failure to comply with validly served enforcement notices is a criminal offence. Accordingly, a local authority can consider whether, on the facts known to it, the individual is likely to have benefited from their criminal conduct. If the perpetrator is and has been making money as a result of their planning breaches, and continues in breach of the planning enforcement notices, a confiscation order may well be appropriate.
How do you go about using this tool?
If the prosecution is underway in the Magistrate’s Court, a request must be made prior to sentencing for the matter to be committed to the Crown Court. The Crown Court must then decide whether the defendant has a criminal lifestyle from which he has benefited financially or whether he has benefited from his particular criminal conduct. In either case the benefit obtained must be over £5,000. If the court makes a confiscation order the recoverable amount is equal to the defendant’s benefit from the conduct concerned.
To assist the court the prosecution makes a statement of information relating to the defendant’s criminal lifestyle and any benefit allegedly obtained. In addition, the court has a wide power to order the defendant to provide any information it requires to assist in making the decision. If the defendant fails to supply this information without reasonable cause, the court may draw adverse inferences.
A chance for remediation and a deterrent
Notwithstanding any prosecution, there is still the necessity of remedying the planning breach. In the absence of action by the offender, the local authority may find itself taking its own remedial measures, and in the absence of the offender having funds to satisfy the costs of the remedial action, registering a charge against the property to cover those costs. The local authority will carry these costs until such time as the property is sold, and subject to funds being available after discharge of any prior charges, only then will the local authority be reimbursed.
Here lies the key advantage to obtaining a confiscation order under the Act. Not only is the offender punished by forfeiting the profits attributable to the planning breaches, but the local authority receives a share of those profits. With careful judgement and investigation local authorities could use this tool to attack known repeat offenders in their jurisdiction, creating a real deterrent against future and ongoing breaches of planning law, while recovering sums to cover costs of any necessary remedial action. This avoids the need to expend valuable council funds against the uncertainty of future recovery.
Stuart Andrews is a partner in Eversheds LLP’s Real Estate Planning team.