In this issue
Welcome
Ill-gotten gains and Unexplained Wealth Orders: A new game of hide and seek?
Co-operation need not lead to loss of privilege: SFO v ENRC revisited.
Assessing the Value of Benefit: Gross Turnover or Profit?
Business crime and the draft Sentencing Code
Regina v ALI BAHBAHANI [2018] EWCA Crim 95
R (on the application of Gibson) (Appellant) v Secretary of State for Justice (Respondent) [2018] UKSC 2
Business crime and the draft Sentencing Code
 
Abigail Bright
Abigail Bright

By Abigail Bright 

 

When assessing corporate risk, would businesses value a single sentencing statute that is the single source on procedure for sentencing tribunals when sentencing business crime offences?

 

Businesses value ability to predict and understand how courts respond to offending. Businesses recognise the value of courts assessing seriousness of harm caused by offending to commercialism. A classic hallmark of assessing the impact of crime on a business is what is captured in a ‘business loss and impact’ statement. These work in the same way after conviction of an offender as a victim impact witness statement. Business loss and impact statements show and tell how loss mattered to a company. Did a business survive loss sustained by criminality? Were jobs lost? Were opportunities missed? Was insurance sufficient to redress loss sustained by being the target of an offence or offences?

 

Businesses also value knowing what the basis is upon which sentences are passed on corporate individuals and corporate organisations. Commercial risk and offsetting of risk entails taking informed, defensible decisions about the likely practical consequences of corporate offending. Costs of offending are monetary and reputational. Presently, the basis upon which corporate offenders (individuals and entities) are sentenced is split across several types of sources. For businesses to look at what is within the contemplation of a sentencing tribunal (lay or professional magistrates or Crown Court judge), regard must be had to various guidelines. Offence-specific guidelines do not exist for numerous types of business crime. 

 

The Law Commission intends to change this. Its draft Code ushers in a ‘clean sweep’ regime of a single governing code for sentences. Has it gone far enough to really help business?

 

Published on 27th July 2017, the Law Commission, led by Professor David Ormerod Q.C., published a consultation paper on a draft Sentencing Code and draft accompanying legislation. The consultation document marked the Law Commission’s third (to date) consultative exercise on the Sentencing Code. The number of consultations is an immediate indication of the sheer nature and ambitious scale of the extensive consulting task undertaken. The Law Commission’s draft Sentencing Code can be viewed by clicking here

 

Chapter six of the Law Commission’s consultation (‘Financial orders and orders relating to property’), questions 27 to 33, inclusive, is what will interest businesses most. The schema of the draft Sentencing Code is not, however, a panacea for corporate uncertainty about what are the financial consequences of types of monetary offending. Businesses will welcome that the Law Commission has included, broadly stated, what are general provisions and principles governing the types and monetary values of fines. Business are, however, likely to find it desirable that the Law Commission reconsiders an aspect of its present stance – exclusion from its draft Code of levels and maxima of fines for particular offences.

 

On this, businesses are likely to align with the views expressed by the Law Reform Committee of the General Bar Council of England and Wales (‘the Bar Council’).  You can access a copy of the Bar Council's response to the consultation by clicking here. The Bar Council takes the view [at paragraphs 88 and 89 of its consultation response] it would be helpful to specify fine bands (A, B, C) and also fine levels. That can be done in a simple table appended to the Code.  

 

The Bar Council [at 88 and 89] recorded the force in not incorporating into the draft Code Part 3 of the Magistrates’ Court Act 1980, for the reasons given by the Law Commission in its consultation [at §6.6-6.8].

 

On a separate point, the Bar Council agrees with the Law Commission [at §6.2 of the consultation] that little is gained by specifying in the Code each type of offence presently on the statute book attracting a fine, together with statutory maxima. The two together conclude that declining to specify statutory maxima coheres with the approach taken by the Law Commission to its presentation, generally, of sentence levels. Businesses are likely to think this is a missed opportunity to bring clarity. Whilst the Code should be as free of clutter and the dispensible as possible, businesses are likely to highly prize a Code that at least specifies statutory maxima. The Code can remain current without needing legislative refreshment if it incorporates predictable facility to increase levels of fines according to standardised or indexed inflation. That can be done whilst preserving stated statutory maxima for particular offences. Doing so would be a modest but meaningful improvement to the draft enabling legislation intended to give effect to the Sentencing Code.

 

Where businesses and the Bar Council are likely to agree is that the Law Commission has reason to remove from the draft Code [clause 84] the table presently showing the levels of summary fines passed over time. The Law Commission asked consultees whether it is helpful to include this table. Businesses and the Bar Council surely agree it is unhelpful. The reality is that sentencing courts are unlikely to refer, in practice, or to refer on more than a very few occasions, to any such table – especially so because the Law Commission’s focus in its table is on offences committed between 1983 and 1992. Economic realities and modes of commercial practice have overtaken monetary values that prevailed three or four decades ago. 

 

The Law Commission further consulted on the value of stating the general power of magistrates’ courts to impose fines [clause 80]. The Bar Council responded [paragraph 92] that this should be done simply and clearly, by inserting a clause as follows:

 

“If the relevant offence provision provides that a person convicted of that offence is liable to a fine, a magistrates’ court dealing with an offender for that offence may impose a fine of a particular amount.”

 

The Bar Council commended the draft Code’s new, streamlined compensation order provisions. Those make explicit – and so more accessible – the statutory and common law iterations of how compensation orders are separate to, but tend to interact with, the confiscation and proceeds of crime regime. Businesses will value this.

 

The Law Commission also consulted on what other ‘signposts’ to conviction forfeiture powers should be included in the Code [clause 113]. Businesses will welcome the Bar Council’s practical proposal [at paragraph 87 of its consultation response] that the Code also specifies certain powers under which forfeiture orders are commonly made as found in the Trade Marks Act 1994 and Consumer Protection Act 1987. The Bar Council proposes that these provisions ought to be incorporated if a non-exhaustive list that extends beyond mandatory forfeiture orders is included in the Code.

 

 

 

Abigail Bright was part of the Bar Council’s Law Reform Committee that responded to the consultation. The Bar Council published its response in February 2018.