The Powers of Criminal Courts Act 1973 (PCCA 1973) provides that a Crown Court may make a criminal bankruptcy order upon conviction of a person for offences which give rise to loss or damage being suffered by one or more persons whose identity is known to the court where the amount, or aggregate amount, of the loss or damage exceeds £15,000 (this financial limit can be varied by statutory instrument). Proceedings are most often brought as a result of police investigations. However, investigations by others, such as HM Revenue and Customs (HMRC), may result in proceedings. A criminal bankruptcy order may be made as a result of one offence, or a combination of relevant offences, that the person is convicted of in the same proceedings. The order will be in addition to any other penalty imposed but will not be made if a compensation order is made against the offender.
Notes: [s39(1) and (2) PCCA 1973][s39(6) PCCA 1973]
The criminal bankruptcy order will specify:-
The "relevant date" for the order will also be given. This is the date that the earliest offence was committed and from which recoveries can be made from transactions at an undervalue and preferences.Notes: [s39(3) PCCA 1973] Relevant date [s341(4)]
A criminal bankruptcy order may be made against more than one offender in respect of the same loss or damage. Whereas there is no provision for filing a joint bankruptcy petition based on such an order, the same order may be used to support separate bankruptcy petitions against each offender.Notes:[s29(4) PCCA 1973] [Form 6.79]
The making of the criminal bankruptcy order in the Crown Court is a preliminary to the making of a bankruptcy order. The Official Petitioner (the Director of Public Prosecutions), or any person specified as having suffered loss or damage in the criminal bankruptcy order, may present a bankruptcy petition. Subject to the court’s general powers to dismiss or stay proceedings or a petition under section 266(3) a bankruptcy order must be made on production of a copy of a criminal bankruptcy order. A petition must be presented in the High Court although this does not preclude a subsequent transfer to another court. However, the Department’s intention is that such cases will only be dealt with by senior examiners and therefore transfer to a local court is unlikely. It is not necessary for the offender to satisfy the conditions of residence or domicile. There is no provision for the offender to file his/her own petition based on a criminal bankruptcy order but he/she may nevertheless still file his/her own petition in the normal way based on the grounds that he/she is unable to pay his/her debts.
Notes: [s402] [s264(1)(d); Form 6.79] [s266(3)] [s277(1)][R6.229] [s265] [s264(1)(b)][s272; Form 6.27]
Where there is a bankruptcy petition pending against the offender unconnected with the criminal bankruptcy proceedings or such a petition is presented after a criminal bankruptcy order has been made, the Official Petitioner can apply to the court to have that petition dismissed. If a bankruptcy order has been made against the offender on a petition pending or presented at the time on or after the criminal bankruptcy order was made and no appeal is pending, the court may annul that bankruptcy order on the application of the Official Petitioner. To ensure that there is a continuity of proceedings it is unlikely that such an application would be made until after a bankruptcy order had been made on the petition of the Official Petitioner. The official receiver will in any event receive 28 days notice of any annulment hearing as the Rules relating to annulment apply to the Official Petitioner as any other applicant but with necessary modifications. As in any annulment the official receiver should seek an order regarding his/her costs. The order for costs will usually be made against the Official Petitioner, with provision in the order for a first charge against any available assets in the "criminal bankruptcy" to reimburse the Official Petitioner. Where the official receiver becomes aware of the making of another bankruptcy order he/she should notify the Official Petitioner immediately as the official receiver cannot make an application under section 282(2).
Notes: [s266(4)] [s282(2)(a) and (b)][R6.234(3)]
There is no right of appeal against the making of a criminal bankruptcy order but the Court of Appeal will rescind or amend the criminal bankruptcy order in the event of the person successfully appealing against the conviction by virtue of which the criminal bankruptcy order was originally made. Any such rescission or amendment resulting from a successful appeal against conviction will not be effective until after the time in which the Crown may apply for leave to appeal in the House of Lords has expired, or if such an appeal is made, until it has been disposed of and that appeal has proved unsuccessful. Where there is a successful appeal against a conviction which effects a criminal bankruptcy order, liaison must be made with the Official Petitioner to establish whether an appeal is to be made (usually there is a maximum of 28 days in which application for leave to appeal can be made) or alternatively to confirm that the Official Petitioner is to make immediate application for annulment of the bankruptcy order. Where an appeal against conviction is pending this does not affect the presentation of a petition based on a criminal bankruptcy order resulting from that conviction.Notes: [s40 PCCA 1973] [s277(2)]
If for any reason a criminal bankruptcy order is rescinded, the court must on application annul any bankruptcy order made on a petition based on that criminal bankruptcy order. The appropriate person to apply for the annulment of such a bankruptcy order will normally be the Official Petitioner.Notes: [s282(2)]
Where the criminal bankrupt’s property is at risk in the period between the presentation of the petition and the making of the bankruptcy order the official receiver can be appointed interim receiver. Only the official receiver can be appointed as interim receiver in a criminal bankruptcy. (See also Chapter 2).
Notes: [s286] [R6.231]
Provision is included in the Administration of Insolvent Estates of Deceased Persons Order 1986 for petitioning for an insolvency administration order dealing with the affairs of a debtor who dies after a criminal bankruptcy order is made.
Notes: [Schedule 1 Part II, 1(3) and Form 3AIEDPO 1986]