Offshore landownership frustrates police investigation
In January, I blogged about the opaque ownership of Kildrummy Estate in Aberdeenshire. A gamekeeper, George Mutch, had been convicted of wildlife crime. Under Section 24 of the Wildlife and Natural Environment (Scotland) Act 2011, an employer or agent of George Mutch can be charged with vicarious liability.
I asked a simple question – against whom would such a charge be brought? The estate is owned by Kildrummy (Jersey) Ltd. and, having outlined the complex ownership structure of Kildrummy (Jersey) Ltd. (see below and January blog for a full explanation), I speculated that the Crown Office might have a job on its hands to determine who (if anyone) could be prosecuted.
This week, thanks to the diligent and dogged investigative work undertaken by Raptor Persecution Scotland (RPS), we are now closer to answering that question. In September 2015, the Crown Office told RPS that,
“Despite further investigations including investigations which focused on establishing vicarious liability, no-one else has been reported to COPFS in relation to the events which took place in Kildrummy Estate in 2012 and accordingly, no further prosecution, including any prosecution for a vicarious liability offence, has taken place“
RPS followed this up by asking Police Scotland why they had been unable to report anyone to the Crown Office who might be considered to be vicariously liable for the crime carried out by George Mutch. Police Scotland’s response was published by RPS yesterday. The key part of Police Scotland’s reply is as follows
“Significant international investigations were undertaken……..it was established that due to insufficient evidence the additional charge of Vicarious Liability could not be libelled“.
This suggests that it was impossible, within the resources available to investigators, to identify with sufficient certainty who is actually behind Kildrummy (Jersey) Ltd. The Police may well know who could be libelled for the offence but had insufficient evidence to connect that person with Kildrummy (Jersey) Ltd. for the simple reason that is is virtually impossible to ascertain the answer to that question. If the Police, with the full range of investigatory powers available to them (including powers to force the Jersey authorities to divulge what information they hold), cannot find that answer, it is hard to see how anyone else might be able to.
Beyond the implications for wildlife crime legislation (and the Police note that “The experience of this case has, however, identified opportunities for refining future Vicarious Liability investigations….”), this raises questions about Scottish Government policy in relation to the offshore ownership provisions in the Land Reform Bill.
In a blog – Scottish Land and Secrecy Jurisdictions -from last month, I refuted the Scottish Government’s arguments as to why they could and would not implement the recommendation by the Land Reform Review Group and the proposal in their own consultation paper to restrict the registration of land by legal persons (companies etc) to those registered within the EU. The provisions currently set out in Sections 35 and 36 of the Bill merely allow authorised persons to ask the Keeper of the Registers of Scotland to, in turn, ask further questions about the true ownership of companies in secrecy jurisdictions. It is a meaningless provision since authorities in Jersey, British Virgin Islands and Grand Cayman are under no obligation to provide any answers. If even the Police cannot find such answers, what hope has the Keeper?
Included in the Scottish Government’s reasoning was a bullet point 3 that
“There is no clear evidence base to establish that the fact that land is owned by a company or legal entity that is registered or incorporated outside the EU has caused detriment to an individual or community.”
The Kildrummy case is prima facie evidence of precisely the circumstances in which opaque ownership in a secrecy jurisdiction has caused detriment – specifically to the ability of the Police to gather the necessary evidence to pursue a prosecution under an important statute passed by the Scottish Parliament.
Had Kildrummy Estate been owned by a company registered in the EU, the Directors of that company would be easily identified and could have been charged with vicarious liability.
The Rural Affairs, Environment and Climate Change Committee is currently preparing its Stage One report into the Land Reform Bill due to be published in early December. It might like to reflect on the Kildrummy case
I think that our government has been blinded to other things by the independance dance, alas.
One rural example: in England & Wales, the minister is obliged, since the Ragwort Control Act 2003, to produce a Ragwort Code, but ragwort and the other pernicious weeds being devolved, Scottish Government hasn’t bothered!
I wouldn’t stop mongolian companies being registered as Lairds – for me the solution is to provide for “The Beneficial Owner or Owners of land at wherever” to be given enough corporate status to be prosecuted, with fines being charged on the land, and, of course, forfeiture of firearms and shotgun certificates for all concerned.
ragwort isn’t a pernicious weed and it’s effects on livestock are grossly exaggerated. It’s actually extremely beneficial to many species and some surveys suggest it may be in decline.
http://www.ragwortfacts.com/ragwort-myths.html
Sorry, Danny!
Pernicious is the wrong word – Ragwort and four other weeds are listed in s.1(2) of the Weeds Act 1959 as being “injurious”. My apologies. But here both docks and ragwort seem to be expanding fast.
One law for them…and another for us.
If a fine is charged on the land, after a reasonable time lapse, to allow JerseyPost to get a letter forwarded to via a postbox in the Cayman Islands, say three months, the Fiscal ought to be able to cherry-pick a suitable bit of ground, and auction it, to raise the funds.
Perhaps in the circumstances of no-one coming forward to claim ownership and thus responsibility, it might be possible to amend the law for an appropriate portion of an estate to be forfeited as a penalty for any proven wrongdoing. No doubt, lawyers will dismiss such a remedy as being too simple for pursuit against the vested interests.
I wonder if it is possible to find out where any funds coming into the estate via the Jersey companies are from ?
Not a portion, the whole estate should be seized and auctioned off piecemeal.
Much better to work within the law – ECHR certainly wouldn’t allow forfeiture of £5M estate to pay £5k fine – disproportionate. The trouble, of course, with my bright idea, is that shadowy owner’s “agent” would probably tell the estate staff to stop illegal killing of raptors, and that he means it! So we lose the chance to lure the Vampire out of his coffin!
I’d be sure that the money doesn’t come via Jersey – most likely via an accountant or other “regulated professional” who has satisfied himself with due diligence that the funds are clean. Could (s)he be required to reveal whose money it is? Probably he doesn’t know! If the money comes from a middle eastern potentate, I’d guess it could be paid over via a Bank of England account? (Any bankers among us?)
I agree. The very threat of confiscation of all of the estate might well extract admission of ownership, therefore guilt. If not, the land should return to the people of Scotland…NOT the Crown.
Very unlikely that the courts would allow confiscation of all of a £5,000,000 estate to pay a £5,000 fine but, if no-one admits to ownership it could surely be taken that there is no owner, therefore, it belongs to the people of the country.
A wee rider here because its essence really irks me: from whom did the first owner buy the land? No-one. It must then be stolen property: ill gotten gains. Of course, I believe this to be pertinent to all “privately owned land”.
Excuse my ignorance here but, if the land on which the poison was laid is known and the gamekeeper laid it, surely he would be charged with the crime. If I went to that same land and committed a crime, let’s say theft of some of the property on that land, I am pretty sure I would be charged, arrested and punished for the crime. Can one of you explain why not being able to pinpoint the owner in this case makes the difference?
The gamekeeper was charged and convicted. This blog is about vicarious liability whereby an employer or agent is also guilty of the offence unless they can demonstrate that they didn’t know that the offence was being committed or had taken reasonable steps to prevent it.
Thank you, Andy.
Perhaps Raptors are not high enough up the scale – What if there had been a major incident involving the death of farm staff or visitors. Who would be prosecuted by the @elf & Safety ….? Perhaps that s the question to ask SG.
hmmm… maybe I should go out and commit a criminal offence, give the police a false name and address (like the shell companies effectively do), and when the police confront me at a later date, I can just tell them that as I am not the person named on the charge sheet, they can do nothing about it !… because that is basically what is going on here.
Naïvely is it not possible for the Scottish Government to take over and hold in trust all land in Scotland for which the owner is not known to the Registrar and wait for someone to stand up and be counted and to prove ownership that the Registrar can verify?
Naïvely, indeed! The owner of this land is very well known – it is a Jersey Company. What is not known is who stands behind the veil of incorporation. Human Rights legislation frowns on expropriation, without overwhelming public need. I assume that “they” pay PAYE & NI on “their” staff? Council Tax on the “Lodge”, and all the other mulcts?
Secrecy is suspicious to many of us – “What have you got to hide?”, but if my neighbour was George Clooney and his stunning wife, I rather suspect that they’d try to keep the papparazzi away by hiding their ownership?
We need legislation which will pierce the corporate veil, and violate privacy, but which is only just strong enough to make sure that these (presumably) foreign owners pay their proper share of the cost of running Scotland plc, but no more.
Why on earth have Holyrood and Westminster not yet introduced three or four higher valuation bands for Council Tax?
Does it need to be the original owner for this law to have an effect?
Could the law be framed to make the gamekeeper’s immediate employer, that is the name on his payslip, responsible?
As the Wildlife and Natural Environment Act (linked in the blog) makes clear, the employer can be held vicariously liable. However, despite the best efforts of the police, a person fitting the description of an employer appears not to have been located.
Presumably, Mr. Mutch was asked who he understood his employer to be? The entity paying his wages and setting out his duties and terms of employment must be identifiable.
I assume Kildrummy estate receives subsidy payments? Perhaps a route around this is to refuse subsidy payments where the beneficial owner (who in this case Coutts Trust Co will know) is not known. Surely if we can’t prosecute, we should be under no obligation to pay?
A slight aside, but it is part of what we are fighting for, it is good that the gamekeeper was caught out killing a goshawk, whilst raptor persecution on reared artificial pheasant shoots may not be quite at the level as that on grouse moors, it is something that has not had enough public scrutiny, goshawks in particular are very secretive birds, and many people may not be aware of their existence in an area – but the gamekeeper will be, and take steps to solve his “problem” under the radar, with no one being any the wiser.
Whilst on the subject of pheasant shoots, many of these are run on tax scams such as corporate hospitality etc – the public purse should not be used to fund a practise most taxpayers find silly and odious.
On a more aesthetic note, here is a video of the magnificent goshawk in action on mountain hares – far more sporting than the mass shooting of mountain hares that goes on over grouse moors – only an overpaid philistine would support the killing of these fantastic birds ; https://www.youtube.com/watch?v=rFd7Do1INfw
Are estates like Kildrummy in receipt of any agricultural or other subsidies?
If the actual owner is unidentifiable then withdrawal of the subsidies to the estate would surely be justified?
Why? The SFP is paid to keep the land in good condition. If it was withdrawn (thinking of another estate of which I know more) I’d guess it would lead to the sheep being taken off the hill, and the shepherd being made redundant (sounds nicer than “sacked”?) and turfed out of his house with wife & children?
Would that be a really good idea?
If (and that’s a very big if) the anonymous lairds aren’t organised criminals with dirty money, behave properly, and pay their way, is there any good reason, other than my (and yours too) curiosity for requiring them to show their faces?
Agricultural and forestry etc subsidies should not be paid to any shooting estate or land where syndicates shoot over – they are not farms where real people live and work (to paraphrase John Major – the chapie who brought in the business rates exemption for sporting estates), but pheasant and grouse shooting theme parks.
I’m afraid I detect a sniff of class warfare here! Whether a shoot is syndicated (a goodly number of people share the costs of the game-keeper, his equipment and housing, and pay the owner a fee, in return for enjoying the shooting) or in hand, with the Laird paying the expenses and he and his guests enjoying the shooting, makes no difference. Equally whether the farm is in hand or let to a farm tenant doesn’t really make much difference.
If one doesn’t like the idea of birds and beasts being killed by people who enjoy it, I’d say that is an arguable position, albeit I don’t agree with it. The hill ground in the highlands can be grazed by sheep and cattle at the same time as grouse are shot, without detriment to either, and after the beasts come down to the low ground for wintering, the deer can be stalked. While I fear that few reared pheasants get eaten, venison most certainly is sold for the table.
Or, of course, the whole estate could be planted with conifers and the community destroyed?
Let’s get back on topic!
Should owners of land in Scotland, whether in town or in the country-side be allowed to conceal their identities, and lurk out of reach of the police, always assuming that they behave themselves and pay their taxes?
If not why not?
Simply astonishing attempt at moral high ground there with “I detect a sniff of class warfare” The reason there is such land ownership in Scotland in so few hand is entirely due to class warfare from top down. It’s ok to set up an unfair economic system but any complaints from the serfs are to be dismissed he? Class warfare?
http://raptorpolitics.org.uk/2015/12/01/scottish-game-farmer-convicted-over-the-illegal-use-of-a-gin-trap-by-his-gamekeeper
At least one man, and not the laird, but an intermediate manager, has been vicariously convicted!
In future Graham will insert a clause in keepers’ contracts of employment binding them to obey the law! Is that enough to avoid liability? I’d say no way, Jose. What should a laird/Manager do to be safe? I think he, in addition to written briefings, probably needs to speak to each keeper, face to face and then search game larder, gun room, and any store the keeper uses to ensure no illegal traps, and no little plastic pots of anonymous powders. And then every eight months or so, do the same thing, and make a manuscript note in his diary?
“Or, of course, the whole estate could be planted with conifers and the community destroyed? ”
Loving the simplistic approach. Big Shooting Estates or Forestry are the only options for Upland land use ? What nonsense. I strongly suspect that more diverse land ownership would lead to a stronger upland economy, more people in “the Community” and a generally better outcome. Class warfare ? No, just plain common sense.
As I have asked in some of my previous posts and is also stated above , why do persons who own land wish to keep their identity secret from the common person as well as the scottish government? Land is one of Scotlands major assets. It provides livelyhoods and resources for the scottish people, It should not be used purely as a capital investment or possibly for some secret financial hanky panky. Land owners should have a legal duty of care to the land and to the occupants who live on the land whether they are directly employed by the estate or supply services to the estate , i.e they should be responsible to the community on and around their estate. If the owners of these estates are unknown , probably living in some warm climates they are unlikely to understand the social structure of the estate and only see it as a number on a balance sheet . This is very wrong and I hope that the land reform act will ensure that any owner of land can be identified , not as a trust (e.g Colstoun trust) or shell company etc but as individuals. In fact I would go as far as to say that any large landowner ( a person) must have their principle residency in Scotland and any charitable trust owning land must be only registered in Scotland with the main principles/ officers identified.
I heartily agree, except that I imagine the actual owners of such lands are mostly likely to have their main family residence somewhere within London or easily travelling distance thereof.
Or in the Arabian Gulf.
Whatever else the George Mutch/Kildrummy Estate case may be, it is NOT an example of a prosecution being frustrated by offshore (non-EU) ownership.
The statement:-
“Had Kildrummy Estate been owned by a company registered in the EU, the Directors of that company would be easily identified and could have been charged with vicarious liability.”
implies that prosecution of a corporate cannot succeed unless human directors can be found.
That is not true. There’s no reason why a corporate prosecution can’t be brought against a company incorporated anywhere in the world, whether or not its directors (or beneficial owners etc.) are known. If nobody turns up to defend the case on its behalf, then the prosecution can proceed in absence. If the company is convicted and fined, then, if it’s not paid, the fine can be recovered as if it were a civil debt. Provided the fine is over £3,000, that means the company can be sequestrated which would involve the estate being sold to pay it. And that is all entirely ECHR compliant, by the way, irrespective of how insignificant the amount of the fine is in relation to the value of the estate.
I don’t know why Crown Office decided not to prosecute Kildrummy (Jersey) Ltd but my guess would be that they were not Mutch’s employers, nor was he their “agent”. But these issues would equally have arisen if K(J) Ltd had been incorporated in an EU country – the fact they’re in a tax haven is a total red herring. (A more relevant question is why CO didn’t prosecute whoever *was* Mutch’s employer, the identity of whom would surely have been discoverable by plod.)
So, far from demonstrating a need to ban it, this affair is just further evidence of the muddled thinking which surrounds non-EU ownership which in reality is nothing more than gesture politics tinged with a whiff of xenophobia.
“(A more relevant question is why CO didn’t prosecute whoever *was* Mutch’s employer, the identity of whom would surely have been discoverable by plod.)”
…..because Plod could NOT find who Mutch’s actual employer was perhaps ?
As it says right at the head of this thread…
” The key part of Police Scotland’s reply is as follows “Significant international investigations were undertaken……..it was established that due to insufficient evidence the additional charge of Vicarious Liability could not be libelled“. This suggests that it was impossible, within the resources available to investigators, to identify with sufficient certainty who is actually behind Kildrummy (Jersey) Ltd…. “
It would be interesting to see a fuller statement from the police regarding the tracing of ownership etc – in broader legal terms, if for instance, a crime cartel had invested their money in say, a block of luxury flats in Edinburgh or London (or a country estate for that matter !), would their investigations grind to a halt at this point and be called off (ditto a multinational engaging in tax evasion etc). ?
Before the amalgamation of our Police forces, each had a Wildlife Liaision Officer. One or two were Sergeants, most just Constables. Whether Police Scotland has a DCI Wildlife now, I don’t know, but I doubt it. Wildlife Crime just isn’t that important, I fear. Now, had there been the financial incentive of a share in the proceeds of a POCA forfeiture, I think that the veil might have been knocked aside!
I think plod is revealing his low level understanding. Vicarious Liability is not a charge that can be libelled atall! Vicarious liability is a concept that allows one person (flesh & blood, or incorporated) to be charged with another’s dirty deed. In general it doesn’t apply in criminal matters, but in this case it does, by specific statutory provision.
One assumes that Mutch was paid something? It should not have been difficult to find who paid him, and assuming that that was one of the large Land Agent firms, they could surely have been gone through under money laundering legislation to find out who put them in funds to pay Mutch.
Plod had got one conviction, and wasn’t really interested in chasing the laird. It was all too difficult to bother about.
I tend to agree, someone probably decided it was not worth the bother – elsewhere on the thread I asked what would have happened had it been a more serious offence – Fatalities due to Health & Safety infractions say, Who would be liable then ?
As Neil stated the problem seems to be ascertaining who George Mutch’s employer was , not that his employer may have been a non EU company. It is not necessary to lift the corporate veil to raise an action against or prosecute a limited company. Companies are seperate legal entities.
Ludicrous situation. If the police really wanted to pursue ownership anyone concealing it would be committing an offence. The influence of big landowners corrupts our society.
At 5500 acres, as Highland Estates go, Kildrummie isn’t big, and I’d suggest that one thing a hidden secret land-owner doesn’t have is influence!
Hmmmm. Hints and suggestions from agents and factors, words dropped on old-boy networks. I suspect there is more influence than you think.
Mm, you know a lot – would you let the police know who the owner is……
Does this mean that the estate is now open to everyone.
The way I see it is you can do what ever you want on the estate and when questioned, simply say you have the owners permission.
It’s up to the police to prove you don’t.
I can’t imagine anyone popping their head over the parapet and saying ” I’m the owner”
If anyone is caught poaching on the estate – who prosecutes ? – could be time for a mass Keilder Scout type poaching trespass with the press invited !
If the Police are sensible they will tell the person reporting your presence that its a Civil matter, unless you are daft enough to do something criminal .
All the Estate Staff ( acting as the owners agent ?) can do is ask you to leave. First question – “On whose behalf are you asking me to leave ?” We’ve seen the convoluted trail of ownership – could you get off by stating that x or y company does not own the Estate ?
No. The answer to the question is simple – Kildrummy (Jersey) Ltd. Just because it’s incorporated in Jersey doesn’t mean it doesn’t exist or has no legal status in the UK.
Yes, understood – but does not that entity just act as an agent for the real owners ? My understanding of the remedies against trespass in Scotland is limited but I understood that the owner has to ask you to leave their property.
Gene, there is no reason to assume that K(J) Ltd just acts as an agent for a “real” owner but even if it did, the owner or his/her/their/its agent can legally ask you to desist from trespassing.
Well, there is reason to believe they just act as agents – the whole tangled mess of interlocked companies rather proves that ? As for the other point, anyone can ask you to do something but it would appear none of these agents can say who the actual owner is…
Having now read the original legislation, it only ever mentioned the Police as taking action and then in terms of people occupying buildings, camping etc. I think the whole “Trespass” argument is actually dead. Unless you are contravening the Access legislation I think the landowner ( whoever it is) and their agents have no effective way at all of dealing with someone on land beyond attempting to persuade a Policeman that you have committed a Breach of the Peace.
I think this is a rabbit hole we can called “closed” ?
Gene, I’d say what the shareholding in K(J) Ltd tells us is that it’s the corporate trustee of a trust administered by Coutts Bank’s Jersey branch (Coutts being a subsidiary of RBS).
A trust is an owner in its own right, it’s not an agent for anybody. Offshore trusts are regularly used by rich people to save tax. It’s perfectly legal as matters stand but if you don’t approve of it, then let’s talk about changing tax laws instead of daft, unfocussed gestures like banning non-EU ownership which might have the consequence that the folk who currently operate out of Jersey etc. just move to an EU country which doesn’t have Inheritance Tax (e.g. Sweden, Portugal) and carry on much as before so nothing’s changed as far as tax avoidance and raptor persecution are concerned!