Lord McNally
“Dealing non-custodially with offenders
Schedule (Dealing non-custodially with offenders) (which makes provision about community orders, restorative justice, community requirements in suspended sentence orders, compensation orders and fines etc) has effect.”
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, it may assist the Committee if I say a few words about the shape of this afternoon’s debate. A large number of amendments are down. The noble Lord, Lord Ramsbotham, has given notice of his intention to oppose the Question that Clause 23 stand part of the Bill. I shall also oppose Clause 23 because the whole aim of this process is now to replace Clause 23 with the outcome of the Government’s consultation that allows this debate today.
I see the proceedings today and on 13 November as running in this way. Today, we will have, to all intents and purposes, the kind of Second Reading debate that we would have had if this work had been in its proper place when we reached Clause 23. It has been agreed through usual channels to recommit the provisions of the community sentencing and deferred prosecution agreements so that we can effectively debate them in two stages; first, today’s Second Reading-style debate and, secondly, a Committee-style debate on 13 November, when noble Lords will be able put down appropriate amendments. Today, Second Reading rules apply. For good order, I shall move separately the two blocks of amendments, those referring to community sentencing and those to deferred prosecution agreements. Our first debate will be on the community sentencing proposals. When that debate is complete, I will close that debate until 13 November and then make some opening remarks on the deferred prosecution arrangements, which will allow another Second Reading-type debate. I hope that that is clear to noble Lords and will allow us a good, well informed debate on both sets of proposals.
The amendments will strengthen the community sentencing framework to ensure that non-custodial sentences provide robust punishment, are effective in reducing reoffending and give a better deal for victims. The amendments give effect to a number of proposals in the Punishment and Reform: Effective Community Sentences consultation that the Government published in March of this year. As noble Lords will be aware, non-custodial sentences make up the great majority of sentences imposed by our courts. In 2011, fines and community orders made up around 80% of the sentences handed down by the courts. Given those numbers, it is clearly vital that sentences served in the community punish offenders, prevent further offending and repair the harm caused to victims and communities.
Our current community sentences framework delivers some of those purposes better than others. For example, community orders can be effective at tackling the causes of reoffending. The reoffending rate for adults subject to court orders in the 12 months ending September 2010 was 34%. The reoffending rate has fallen by 3.9 percentage points since 2000. Although there is still further to go, these figures are evidence of the hard work and dedication of all of those who work with offenders within probation and other organisations.
However, at present, community orders do not always inspire public confidence. Some community orders do not contain an element that the public would consider punitive, demanding or restrictive. For example, in 2011, around 10% of community orders contained only a supervision requirement, while the percentage of successfully completed orders is still low. The Government are determined to increase public confidence that community orders provide a proper sanction for criminal behaviour. Only in this way can community sentences be effective at tackling the causes of offending while reassuring victims and communities that justice has been done.
There is also scope for community orders to do much more to provide reparation to individual victims and communities affected by crime. It is true that around one-third of all requirements commenced with the probation service are community payback. In 2011 around 50,000 community orders had a compensation order imposed alongside them. But while some community orders already engage victims and offenders in restorative activities, the Government believe that there should be much greater use of restorative justice across the community sentencing framework and beyond.
Before I go into the detail of these amendments, it may assist the Committee if I summarise the responses to our consultation. We received just under 250 responses from a wide range of criminal justice professionals, representative groups, private and third-sector organisations and others. Practitioners have been clear that we need to trust their professional judgment and expertise, and that in doing so it is vital we retain the flexibility of the community order framework. They have also been clear that a one-size-fits-all approach to reforming community orders will not work.
The feedback has been critical in refining and reshaping our proposals. As a result, we have decided not to take forward some proposals. For example, we received a wide range of views on our original proposal for a centrally mandated intensive community punishment order but a common theme was the need to shape intensive orders around local needs. Changes to community orders under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 will give courts new and strengthened requirements to impose on offenders and will increase their flexibility to tailor rehabilitative requirements to offenders’ needs. These changes should provide the courts with more flexible and robust community order requirements that can be combined in creative ways to provide a sentence that delivers intensive punishment but is tailored to local circumstances.
Similarly, the Government have listened to the views of respondents on our original proposal for a fixed penalty for certain breaches of community orders and on giving offender managers the power to impose them. Instead, we have considered alternative means of making the breach process swifter and more immediate for offenders. For example, a significant cause of adjournment of breach hearings is that the defendant is not present. We propose to do further work with the courts, judiciary and probation service to explore improvements in operational procedures for dealing with breaches.
Turning to the detail of our amendments, the core provisions are to be found in the new schedule to be inserted by Amendment 155EZA. Part 1 of the new schedule flows out of our original consultation proposal to require all community orders to include at least one specified punitive element. The Government continue to believe that community orders must represent a clear sanction for criminal behaviour. However, we have listened to the views of respondents who argued that what is punitive for one offender may not be punitive for another and that the courts are best placed to determine what is an appropriate punishment. Part 1 will therefore require courts to impose an element that fulfils the purpose of punishment as part of every community order. That element can either be a requirement of a community order or a fine. The fact that a community order includes a punitive element does not mean that it may not also include a requirement or requirements that are rehabilitative.
In response to the feedback we have received, the duty does not specify what requirements courts should impose. However, based on comments from sentencers and other practitioners on what they generally consider to be a punitive requirement, a punitive element might generally include a restriction of liberty that represents a recognisable sanction to the public, such as a curfew, exclusion or community payback. Many community order requirements are capable of delivering both punishment and rehabilitation at the same time.
The Government have also borne in mind that there may be a minority of offenders for whom a requirement that fulfils the purpose of punishment is not appropriate. The duty therefore provides for an exemption where there are exceptional circumstances that would make it unjust to impose a punitive element. We received a wide range of views from practitioners on cases in which a punitive element might not be appropriate. Ultimately, what constitutes an exceptional case can relate only to the circumstances of each individual case, and the Government believe that that is properly a matter for the courts.
Part 2 of the new schedule amends the courts’ existing powers to defer sentencing in order for a victim and offender to take part in restorative activities. As noble Lords will be aware, restorative justice can have a positive impact on both victim satisfaction and reoffending. The Government believe that access to restorative justice should be available for all victims at all stages of the justice process, so that, where appropriate, they can opt-in at a time that is right for them. For some victims, that may happen immediately after an incident occurs, while other victims may want to participate in a restorative justice process post-sentencing.
We have noted in particular the significant support that consultation respondents expressed for increasing the use of restorative justice between conviction and sentence and the potential benefits that that could have for both victims and offenders. New Section 1ZA of the Powers of Criminal Courts (Sentencing) Act 2000, as inserted by Paragraph 5 of the new schedule, therefore makes it clear that courts can defer sentences until a restorative activity has taken place, if that is the course of action that both the victim and the offender choose.
This amendment is an integral part of the Government’s wider work on developing a cross-criminal justice system framework for restorative justice. The framework will seek to ensure that there is a coherent vision of how restorative justice should apply across all stages of the justice process, including how we build local capacity within available funding and how we ensure a consistently high quality of delivery through accreditation and training standards.
Part 3 of the new schedule removes the current £5,000 cap on a single compensation order that applies in the magistrates’ courts for adult offenders. The Government are committed to ensuring that as many victims as possible receive financial compensation from their offender. This change will give magistrates greater flexibility to impose appropriate levels of compensation in cases where significant harm may have been involved; for example, in environmental offences or criminal damage offences.
Part 4 of the new schedule amends courts’ powers to use technology to monitor offenders electronically as part of a community order. Current legislation already allows electronic monitoring technology to be used to monitor compliance with any other requirements imposed by the court as part of a community order. The vast majority of electronic monitoring is currently delivered by way of radio frequency technology. This technology has proven to be robust and reliable and an accurate way of monitoring an offender’s compliance with their curfew requirement. However, its capability is in practice limited to monitoring whether the offender is present at a specified address during specified times. The Government want to harness recent developments in technology to make greater use of location monitoring technologies, such as GPS, for offenders serving community orders. The National Offender Management Service is currently recompeting its contracts for providing electronic monitoring, which will include this new technology.
In addition to using location monitoring technology to enforce existing community order requirements, the Government propose to give the courts power to track offenders for the purposes of deterring crime, public protection and crime detection. The Government are clear that implementation of the new provision will be subject to the relevant technology being affordable and fit for purpose and to appropriate safeguards for its use being in place. Among other things, the Secretary of State will be under a duty to publish a code of practice setting out the appropriate tests and safeguards for the use, retention and sharing of any collected data.
Part 5 of the new schedule amends courts’ powers to order offenders to provide a statement of their financial circumstances before imposing a financial penalty or dealing with default in payment to make it clear that such a statement may include details of all their assets. Our consultation set out our aspiration to make greater use of asset seizure across the justice system. We consulted on the idea of creating a stand alone sentencing power to seize offenders’ assets as a punishment in its own right. Many respondents felt that in practice such a power could be difficult to impose and enforce. However, some respondents suggested that greater weight might be placed on offenders’ assets when fixing financial penalties.
Courts are already required to have regard to offenders’ financial circumstances when fixing fines, compensation orders and other types of financial order. In many cases, information about offenders’ earnings and outgoings will be sufficient for courts to set a proportionate and equitable penalty. However, the Government wish to ensure that, in cases where offenders may be cash-poor but have items of property that are more valuable, courts can, if appropriate, take account of this when fixing the value of a financial penalty.
Part 6 creates new powers for Her Majesty’s Courts and Tribunals Service to access data from Her Majesty’s Revenue and Customs and the Department for Work and Pensions to ensure that, when setting the level of a fine or compensation order, the courts have accurate information about an offender’s income or state benefits. This will ensure that fines are set at the appropriate level—not too low if they have a well paid job and not too high if they rely on state benefits.
With the addition to the Bill of these substantive provisions on community and other non-custodial sentencing, I am happy, as I said, to join the noble Lord, Lord Ramsbotham, in opposing the Question that Clause 23 should stand part of the Bill. I believe that these amendments will build on the strength of our current community sentencing framework to ensure that such sentences strike the right balance between punishment, rehabilitation and reparation when they are effectively enforced. I commend the amendments to the Committee. I beg to move.
Lord McNally
My Lords, I am grateful to the noble Lord, Lord Beecham, for that response. As is often the case with his contributions, it contains a great deal with which I agree. I am also grateful to him for putting on the record statistics about the nature of people who come into our criminal justice system.
I am pleased that the noble Lord emphasised the prize of rehabilitation. I have never hidden the fact that I am not pleased with a 50% reoffending rate in mainstream prisons and a 75% reoffending rate among youth offenders. Fortunately, a very small core of youth offenders are now in custody. Even the most hard-nosed of criminal justice practitioners must see the common sense of cutting into reoffending rates which has the threefold benefit of saving the taxpayer the £40,000 or so a year it costs to keep the reoffender in prison, saving victims the trauma of future crimes and giving society a law-abiding member. So the prize for getting rehabilitation onto the agenda is extremely important. I am very grateful for some of the comments —here we had recently a Conservative Prime Minister talking positively about a rehabilitation revolution. That is very welcome and is something to build on.
I wish to comment on two of the points made by the noble Lord, Lord Beecham. I would like us to achieve with women offenders some of the success that we have had with young offenders. As the noble Lord rightly said, you do not have to look in too many women’s prisons to see those who have no place there. I am glad to say that my colleague in the other place, Helen Grant, has taken responsibility for our women’s strategy and will be publishing shortly an update of that strategy, which I freely admit will build on the pioneering work of the Corston report in relation to women prisoners. The noble Lord is also right about the 18 to 25 age group where criminality becomes embedded. We should be looking at how we try to identify some of the specific issues there.
As always with debates in your Lordships’ House, I am left with a pile of notes that either I have made myself or the Box has supplied, which would keep me here until well after the dinner hour. I would therefore ask that I and noble Lords are spared a response to every question, and I hope that we can raise them again in Committee.
Of course I do not see restorative justice being simply about saying sorry, although, interestingly, it is sometimes the most difficult thing to say. However, restorative justice also forces the offender to face the consequences of their actions and the impact that they have had upon others. In this way, it can help rehabilitate offenders and enable them to stop offending. It can help motivate them to change and become responsible, law-abiding and productive members of society.
In the examples of restorative justice that I have seen, its importance for victims should not be underestimated. The victims said on many occasions, “That enabled me to have closure” on what had been a very traumatic experience. I was therefore grateful for the comments made about our proposals on restorative justice, although I should say to all my colleagues who said that it is a big commitment that I do not underestimate the fact that it will have to be prepared with the proper training and rollout. I pay tribute to the noble and learned Lord, Lord Woolf, because it was his constant harrying on restorative justice that made it a priority for me. While I take on board the fact that it is a tough ask, perhaps I may quote Mao Tse-Tung, who said,
“The journey of a thousand miles begins with a single step”.
I hope that this is the single step that takes us towards restorative justice.
I was slightly disappointed that the noble Lord, Lord Reid, did not ride to my rescue because, again, I agreed with much of what he said. I agree that there are people in our prisons who should not be there. One of the things that I hope we are developing in this policy is the twin track, which will make sure that the people who should be in prison are put there because of the nature of their offences or for public protection, but those who should not be in prison are managed safely out of the system.
I was glad of the references to one of my other standby quotations—Jimmy Maxton’s comment about riding two horses at once. That is precisely and unashamedly what we are trying to do. We are trying to make sure that the public have a confidence in community sentencing that will allow us to implant rehabilitation into the community sentencing process, which we hope will provide the impact on reoffending that I have said is so desirable. I agree that there is a certain element of riding two horses at once. We need public confidence in community sentencing if we are going to give it the traffic that we want it to bear.
Lord Beecham
Does the Minister agree that it is essential that the horses run in the same direction?
Lord McNally
Absolutely. We might get on to troikas in a few minutes, but we will wait for that.
I also fully understand the separation of powers in our system. The judiciary and parliamentarians should show due respect for each other, but we should also respect that in the workings of the criminal justice system parliamentarians have a responsibility as well as the judiciary, and they are quite entitled in that responsibility to comment on how the system is working. I have to say to the noble Lord, Lord Elystan-Morgan, that if proposing amendments to the criminal justice system somehow disowns all the decisions that judges have made under previous legislation, it must have been really difficult under the previous Government who, I think, passed a piece of criminal justice legislation on average every year for 10 years. We should not get too thin-skinned about it. I have absolute respect for our judiciary and it is a bit rum to say that we are bullying or being high-handed. One of the key elements of this Bill spelt out clearly our trust in the sentencer to make the crucial judgments about balance in terms of punishment.
Of course we will consult on guidance. When sentencing any offender, courts are under a statutory duty to follow any relevant guidelines issued by the Sentencing Council.
Lord Elystan-Morgan
Does the Minister accept the logic of the situation that, if he is right about the one-third of community sentences that according to the government definition do not carry a punitive element, that one-third—amounting to many tens of thousands of sentences each year—would be disallowed and that that is the effect of the situation over the past nine years since the 2003 Act came into force?
Lord McNally
I am sorry but I completely failed to follow the logic of this. Parliament is entitled to take another view nine years after a piece of legislation is enacted. That does not mean that decisions taken under the 2003 Act between its enactment and this Bill becoming law become completely invalid, it just means that Parliament has taken another view on this and has given some further guidance as to how the council should carry out its responsibilities. The Government are saying that they believe that the third or so of community sentences that did not have any punitive element would have been better and more effective if a punitive element had been included. We have had a lot of debate about this, but imagining that community sentencing that does not have punitive elements will have public confidence is going too far. I can tell the noble Lord, Lord Reid, that I had a very good example of one of his pieces of handiwork. I went to see a group of young men clearing a patch of derelict land and they were all wearing bright orange jackets. I asked the supervisor, “Do you have any trouble?”, and he replied, “Only that they steal the jackets because they’re quite a symbol to wear at the dances on Saturday nights”. That is the reality at the sharp end.
There is a fear of the word “punishment”, and the noble Lord, Lord Beecham, mentioned some statistics. I have said this at this Dispatch Box before: at one of my first ministerial visits to a young offender institution, there was a group of 16 and 17 year-olds standing around and I said to the person in charge, “What are the factors involved in these guys being here?”. He looked across at me and said, “Most of them have had but a passing contact with our education system throughout their lives, and most of them can’t read or write”. If we have young people, in particular, in our care and custody for a period of time, it does not seem unreasonable to say, “While you’re there, you’re going to learn to read and write”, or, if they are on a community sentence, “While you’re on that community sentence, we’re going to teach you to read and write”. Somebody who may never have got up before noon in his life might classify learning to read and write as a punishment, but later in his life he may classify it as one of the turning points in his life.
I understand some of the concerns but let us not get too worried about some of the presentational aspects; let us dig down into what the Bill is going to do. I think that it will put community sentencing on to the map in a way that will attract public confidence and enable us to take proper action on the rehabilitation of offenders.
I reassure noble Lords that we are looking very carefully at electronic monitoring and we will keep the House informed as we examine the technologies. Of course, we are aware that there will be civil liberties concerns in this area which we will wish to address and on which we will wish to reassure Parliament.
With the leave of the Committee, I shall look through my notes and, where there have been specific questions that I can reply to, I shall do so in writing. However, I know that this excellent debate has fulfilled the first of our objectives. I take on board the concerns that have been expressed about probation. I am a lifelong admirer of the probation service and am in awe of the responsibilities that our probation officers take on. I cannot imagine that any future structure would not draw on the experience and ethos that makes it such an excellent service.
Baroness Butler-Sloss
Before the Minister concludes, perhaps I may again raise the question of “exceptional circumstances”. I hope that he appreciates the limitation of the word “exceptional”. I think that the lawyers in this House will all agree that that word will be treated by the courts as really meaning exceptional.
Lord McNally
I shall certainly take that back. Perhaps I may be quite clear about the Government’s intention. The use of “exceptional” is not a three-lane highway out of a request to have a punitive element. In consultation we have said that we see “exceptional” covering about 5% of circumstances. The point I am making is that the punitive concept is widely drawn and is very much in the hands of the sentencer. However, I will take back the noble and learned Baroness’s point about what the lawyers would make of this. We are expanding the definition from the 2003 Act and will see whether more legal advice is needed on the meaning of “exceptional”. However, it cannot mean that the exceptional becomes the general.
Lord Reid of Cardowan
The Minister said something very interesting there and I just want to clarify it as far as we can at this point. He said that some people might regard learning to read and write as punishment, but presumably some others might regard cleaning up a park, building a house or helping old people as punishment—in other words, they would be doing something they would not freely choose to do unless they were compelled to do it as a punishment. Would that fit into this category without having to be an exception?
Lord McNally
Yes, and I think that some of the people who have been quoted as pleading exception could well be asked to work in some of those areas. The noble Lord, Lord Elystan-Morgan, shakes his head but, for me, the big danger is there being public contempt for a system where we need public respect. I am talking about somebody whose life is totally dysfunctional, who has never been used to getting up in the morning and who has no idea of time-keeping. We have heard about a number of programmes where half a dozen people are invited to participate but within a week the number is down to two because the others have not bothered to attend. We have to get credibility into the system to make it work. Because we are putting flexibility and trust in the judiciary, I hope that it will see what Parliament is looking for and help us to that end.
Lord Beecham
This is not on the substance but perhaps I may ask for clarification on what the Minister is moving. Presumably he is not moving the amendments, because we will be doing that when the clauses are recommitted to Committee.
Earl Attlee
If I may assist the Committee, we are speaking to Amendment 155ZA.
Lord Beecham
I know what we are speaking to but we are not voting on it. We are not agreeing these amendments. Perhaps the clerks might advise. Are we not recommitting today’s business at the end of the next debate? I am not sure precisely what the procedure is. I suggest that the amendment be not moved and that we just leave it.
Lord McNally
All is now clear. Yes, we have to accept these amendments but they are then subject to amendment at the next stage. They have to be in the Bill to allow us to proceed; otherwise we will still have a blank page.
Lord Rosser
As long as we are clear—I think we are; and I am not accusing the Minister of being otherwise —that, whatever happens now, if the amendments are in some way agreed, it will be open to us to have effectively a Committee stage next month where amendments to these government amendments can be put down, debated and voted on, if votes are called.
Lord McNally
I can absolutely give those assurances. The clerk advises me, and I am sure she is right, that if we did not move the amendments we would have a blank page. Your Lordships will then have something to put amendments to, so that we can have a proper Committee stage with amendments.
Lord Beecham
These seem exceptional circumstances and, in that light, I am sure that we will accept the ruling.
Lord McNally
“Deferred prosecution agreements
Schedule (Deferred prosecution agreements) makes provision about deferred prosecution agreements.”
Lord McNally
I beg to move this formally. Again, these amendments are purely technical. They either have been previously discussed or are consequential. They just bring the position up to date.
Lord McNally
Lord McNally
“( ) an order under paragraph 3(1)(c) or 31 of Schedule (Deferred prosecution agreements);”
Lord McNally
“Dealing non-custodially with offendersPart 1Community orders: punitive elements1 The Criminal Justice Act 2003 is amended as follows.
2 In section 177 (community orders) after subsection (2) insert—
“(2A) Where the court makes a community order, the court must—
(a) include in the order at least one requirement imposed for the purpose of punishment, or(b) impose a fine for the offence in respect of which the community order is made, or(c) comply with both of paragraphs (a) and (b).(2B) Subsection (2A) does not apply where there are exceptional circumstances which—
(a) relate to the offence or to the offender,(b) would make it unjust in all the circumstances for the court to comply with subsection (2A)(a) in the particular case, and(c) would make it unjust in all the circumstances for the court to impose a fine for the offence concerned.”3 In section 148(2A) (restrictions in subsection (2) on making community orders etc are subject to certain enactments) after “subject to” insert “section 177(2A) (community orders: punitive elements) and to”.
4 An amendment made by this Part of this Schedule does not affect orders in respect of offences committed before the amendment comes into force.
Part 2Deferring the passing of sentence to allow for restorative justice5 After section 1 of the Powers of Criminal Courts (Sentencing) Act 2000 (court’s power to defer passing of sentence) insert—
“1ZA Undertakings to participate in restorative justice activities
(1) Without prejudice to the generality of paragraph (b) of section 1(3), the requirements that may be imposed under that paragraph include restorative justice requirements.
(2) Any reference in this section to a restorative justice requirement is to a requirement to participate in an activity—
(a) where the participants consist of, or include, the offender and one or more of the victims, and(b) which aims to maximise the offender’s awareness of the impact of the offending concerned on the victims.(3) Imposition under section 1(3)(b) of a restorative justice requirement requires, in addition to the offender’s consent and undertaking under section 1(3), the consent of every other person who would be a participant in the activity concerned.
(4) For the purposes of subsection (3), a supervisor appointed under section 1A(2) does not count as a proposed participant.
(5) Where a restorative justice requirement is imposed under section 1(3)(b), the duty under section 1(5) (to give copies of order) extends to every person who would be a participant in the activity concerned.
(6) In this section “victim” means a victim of, or other person affected by, the offending concerned.”
6 In section 1(8) of that Act (effect of sections 1 and 1A to 1D) for “1A” substitute “1ZA”.
7 The amendment made by paragraph 5 does not apply in respect of offences committed before the amendment comes into force.
Part 3Removal of limits on compensation orders made against adults8 (1) Section 131 of the Powers of Criminal Courts (Sentencing) Act 2000 (limit on amount payable under magistrates’ court compensation order) is amended as follows.
(2) Before subsection (1) insert—
“(A1) This section applies if (but only if) a magistrates’ court has convicted a person aged under 18 (“the offender”) of an offence or offences.”
(3) In subsection (1) (compensation in respect of an offence not to exceed £5,000) for “a magistrates’ court in respect of any offence of which the court has convicted the offender” substitute “the court in respect of the offence, or any one of the offences,”.
(4) In subsection (2) (limit in respect of offences taken into consideration) for “a magistrates’” substitute “the”.
(5) In the title, at the end insert “in case of young offender”.
9 In section 33B(5) of the Environmental Protection Act 1990 (limit on compensation in relation to conviction for certain environmental offences) after “payable” insert “in case of young offender”.
10 Nothing in this Part of this Schedule affects orders in respect of offences committed before this Part of this Schedule comes into force.
Part 4Electronic monitoring of offenders11 The Criminal Justice Act 2003 is amended as follows.
12 (1) Section 177 (community orders) is amended as follows.
(2) In subsection (1) (requirements which may be included in a community order)—
(a) omit the “and” after paragraph (k), and(b) after paragraph (l) insert “, and(m) an electronic monitoring requirement (as defined by section 215).”(3) In subsection (2) (provisions to which subsection (1) is subject)—
(a) omit the “and” after paragraph (g), and(b) after paragraph (h) insert “, and(i) section 215(2) (electronic monitoring requirement).”(4) In subsection (3) (curfew or exclusion requirement must be accompanied by electronic monitoring requirement) for “(as defined by section 215)” substitute “within section 215(1)(a) for securing the electronic monitoring of the curfew or exclusion requirement”.
(5) Omit subsection (4) (power, in certain cases where subsection (3) does not apply, to impose requirement for electronic monitoring of another requirement included in the community order).
(6) In consequence, omit section 72(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
13 (1) Section 190 (suspended sentence orders) is amended as follows.
(2) In subsection (1) (requirements which may be included in a suspended sentence order)—
(a) omit the “and” after paragraph (k), and(b) after paragraph (l) insert “, and(m) an electronic monitoring requirement (as defined by section 215).”(3) In subsection (2) (provisions to which subsection (1) is subject)—
(a) omit the “and” after paragraph (g), and(b) after paragraph (h) insert “, and(i) section 215(2) (electronic monitoring requirement).”(4) In subsection (3) (curfew or exclusion requirement must be accompanied by electronic monitoring requirement) for “(as defined by section 215)” substitute “within section 215(1)(a) for securing the electronic monitoring of the curfew or exclusion requirement”.
(5) Omit subsection (4) (power, in certain cases where subsection (3) does not apply, to impose requirement for electronic monitoring of another requirement included in the suspended sentence order).
(6) In consequence, omit section 72(4) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
14 In section 192(3)(b) (reviews of suspended sentence order)—
(a) after “electronic monitoring requirement” insert “within section 215(1)(a)”, and(b) for “190(1)” substitute “190(1)(a) to (l)”.15 In section 197(1)(a) (meaning of “the responsible officer” where curfew or exclusion requirement imposed)—
(a) in sub-paragraph (i)—(i) for “177(1)” substitute “177(1)(a) to (l)”, and(ii) for “190(1)” substitute “190(1)(a) to (l)”, and(b) in sub-paragraph (ii) after “requirement” insert “within section 215(1)(a)”.16 (1) Section 215 (electronic monitoring requirement) is amended as follows.
(2) In subsection (1) (“electronic monitoring requirement” is a requirement for securing the monitoring of compliance with other requirements)—
(a) for “for securing the” substitute “to submit to either or both of the following—(a) ”, and(b) at the end insert “, and(b) electronic monitoring of the offender’s whereabouts (otherwise than for the purpose of monitoring the offender’s compliance with any other requirements included in the order) during a period specified in the order.”(3) After subsection (4) insert—
“(4A) Where a relevant order imposes an electronic monitoring requirement, the offender must (in particular)—
(a) submit, as required from time to time by the responsible officer or the person responsible for the monitoring, to—(i) being fitted with, or installation of, any necessary apparatus, and(ii) inspection or repair of any apparatus fitted or installed for the purposes of the monitoring,(b) not interfere with, or with the working of, any apparatus fitted or installed for the purposes of the monitoring, and(c) take any steps required by the responsible officer, or the person responsible for the monitoring, for the purpose of keeping in working order any apparatus fitted or installed for the purposes of the monitoring.”(4) In subsection (5) (electronic monitoring requirement not to be imposed for monitoring compliance with alcohol abstinence and monitoring requirement) after “electronic monitoring requirement” insert “within subsection (1)(a)”.
(5) In subsection (6) (subsection (5) does not prevent electronic monitoring of compliance with other requirements) for “this is” substitute “the electronic monitoring requirement is within subsection (1)(b) or is included”.
17 After section 215 insert—
“215A Data from electronic monitoring: code of practice
(1) The Secretary of State must issue a code of practice relating to processing of data gathered in the course of electronic monitoring of offenders under electronic monitoring requirements imposed by relevant orders.
(2) A failure to observe a code issued under this section does not of itself make a person liable to any criminal or civil proceedings.”
18 (1) Section 218 (availability of arrangements in local area) is amended as follows.
(2) In subsection (4)—
(a) after “electronic monitoring requirement” insert “within section 215(1)(a)”, and(b) in paragraph (b), for “those arrangements” substitute “the arrangements currently available”.(3) After subsection (8) insert—
“(9) A court may not include an electronic monitoring requirement within section 215(1)(b) in a relevant order in respect of an offender unless the court—
(a) has been notified by the Secretary of State that electronic monitoring arrangements are available in the local justice area proposed to be specified in the order,(b) is satisfied that the offender can be fitted with any necessary apparatus under the arrangements currently available and that any other necessary provision can be made under those arrangements, and(c) is satisfied that arrangements are generally operational throughout England and Wales (even if not always operational everywhere there) under which the offender’s whereabouts can be electronically monitored.”19 In Schedule 8 (breach etc of community order) in paragraph 3(b)—
(a) after “electronic monitoring requirement” insert “within section 215(1)(a)”, and(b) for “177(1)” substitute “177(1)(a) to (l)”.20 (1) Schedules 9 and 13 (transfer of community or suspended sentence order to Scotland or Northern Ireland) are amended as follows.
(2) In paragraphs 1(2)(g) and 3(2)(h) of Schedule 9, and paragraphs 1(2)(g) and 6(2)(h) of Schedule 13, after “requirement” insert “within section 215(1)(a)”.
(3) In paragraphs 1(5) and 3(4A) of Schedule 9, and paragraphs 1(5) and 6(4A) of Schedule 13, before “to be complied with” insert “, or an electronic monitoring requirement within section 215(1)(b),”.
21 In Schedule 12 (breach or amendment of suspended sentence order and effect of further conviction) in paragraph 15(2)(b)—
(a) after “electronic monitoring requirement” insert “within section 215(1)(a)”, and(b) for “190(1)” substitute “190(1)(a) to (l)”.Part 5Statements of assets and other financial circumstances of offenders etcFinancial circumstances orders22 In section 162(3) of the Criminal Justice Act 2003 (a “financial circumstances order” is a pre-sentencing order requiring a statement of an offender’s financial circumstances) after “statement of his” insert “assets and other”.
Further amendments23 In section 84 of the Magistrates’ Courts Act 1980 (court’s power to require statement of means)—
(a) in subsection (1) (court may require statement of means before or on inquiring into means under section 82) for “means”, in the second place, substitute “assets and other financial circumstances”, and(b) in the title for “means” substitute “assets and other financial circumstances”.24 In section 20A of the Criminal Justice Act 1991 (false statements as to financial circumstances)—
(a) in subsection (1) (person charged with offence commits further offence if person responds to official request by making false statement etc as to financial circumstances) for “his financial circumstances” substitute “financial circumstances (whether a statement of assets, of other financial circumstances or of both)”, and(b) in subsection (1A) (person charged with offence commits further offence if person fails to provide statement of financial circumstances in response to official request) for “his financial circumstances in response to” substitute “financial circumstances (whether a statement of assets, of other financial circumstances or of both) requested by”.25 In section 13B of the Crime and Disorder Act 1998 (parental compensation orders: the compensation)—
(a) in subsection (4) (provision by parent or guardian of statement of financial circumstances) after “statement of his” insert “assets and other”, and(b) in subsection (6) (provision of false statement) omit “of his financial circumstances”.26 (1) The Courts Act 2003 is amended as follows.
(2) In paragraph 48 of Schedule 5 (offences relating to provision of information as to financial circumstances)—
(a) in sub-paragraph (1) (person commits offence if person responds to relevant request by making false statement etc as to financial circumstances) for “his financial circumstances” substitute “financial circumstances (whether a statement of assets, of other financial circumstances or of both)”,(b) in sub-paragraph (3) (person commits offence if person fails to provide statement of financial circumstances in response to relevant request) for “statement of his financial circumstances to a fines officer in response to” substitute “fines officer with a statement of financial circumstances (whether a statement of assets, of other financial circumstances or of both) requested by”, and(c) in sub-paragraph (5) (meaning of “relevant request”), in the opening words, after “information about P’s financial circumstances” insert “(whether about P’s assets, P’s other financial circumstances or both)”.(3) In paragraph 2 of Schedule 6 (cases in which work order may be made)—
(a) in sub-paragraph (3) (magistrates’ court considering making work order may order person to give statement of means) for “means” substitute “assets and other financial circumstances”, and(b) in sub-paragraph (4) (application of section 84(2) and (4) of the Magistrates’ Courts Act 1980) for “means” substitute “assets and other financial circumstances”.Part 6Information to enable a court to deal with an offenderPower to disclose information27 (1) The Secretary of State or a Northern Ireland Department, or a person providing services to the Secretary of State or a Northern Ireland Department, may disclose social security information to a relevant person.
(2) Her Majesty’s Revenue and Customs, or a person providing services to the Commissioners for Her Majesty’s Revenue and Customs, may disclose finances information to a relevant person.
(3) The disclosure authorised by sub-paragraph (1) or (2) is disclosure of the information concerned for use by a court that, in connection with dealing with a person (“the defendant”) for an offence, is inquiring into or determining the defendant’s financial circumstances.
(4) Sub-paragraphs (1) and (2) do not authorise disclosure in a particular case at a time when the defendant is under 18.
(5) Information disclosed to a relevant person under sub-paragraph (1) or (2) or paragraph (a)(ii)—
(a) must not be further disclosed by the relevant person except—(i) to a court that, in connection with dealing with the defendant for the offence, is inquiring into or determining the defendant’s financial circumstances, or(ii) to another relevant person who wants social security information or finances information in order that it can be put before a court that, in connection with dealing with the defendant for the offence, is inquiring into or determining the defendant’s financial circumstances, and(b) must not be used by the relevant person otherwise than for the purpose of disclosing it as mentioned in paragraph (a)(i) or (ii).(6) Sub-paragraphs (1), (2) and (5)(a) not only authorise disclosure after conviction of the defendant but also authorise disclosure at any time after the defendant is first charged with the offence.
(7) Sub-paragraph (5) does not prohibit—
(a) disclosure to the defendant, or to a person representing the defendant in any proceedings in connection with the offence;(b) disclosure or use of information which is in the form of a summary or collection of information so framed as not to enable information relating to any particular person to be ascertained from it;(c) disclosure or use of information which has previously been disclosed to the public with lawful authority;(d) disclosure or use of information so far as necessary to comply with—(i) an order of a court,(ii) an order of a tribunal established by or under an Act, or(iii) a duty imposed by or under an Act.(8) In sub-paragraph (7) “court” means any court, but elsewhere in this paragraph “court” means—
(a) a magistrates’ court, or the Crown Court, in England and Wales,(b) the Court Martial, the Service Civilian Court or the Summary Appeal Court, or(c) any court hearing an appeal (including an appeal by case stated) from a court within paragraph (a) or (b).(9) In this paragraph—
“finances information” means information which—(a) is about a person’s income, gains or capital, and(b) is held—(i) by Her Majesty’s Revenue and Customs, or(ii) by a person providing services to the Commissioners for Her Majesty’s Revenue and Customs in connection with the provision of those services;“relevant person” means—(a) a person who is appointed by the Lord Chancellor under section 2(1) of the Courts Act 2003 or provided under a contract made by virtue of section 2(4) of that Act,dd(b) a person who is a member of or on the staff of the Service Prosecuting Authority, or(c) a person not within paragraph (b) who is, or who is assisting, a person engaged to represent the Service Prosecuting Authority in proceedings before a court;“Service Prosecuting Authority” means—(a) the Director of Service Prosecutions, and(b) the persons appointed under section 365 of the Armed Forces Act 2006 (prosecuting officers);“social security information” means information which is held for the purposes of functions relating to social security—(a) by the Secretary of State or a Northern Ireland Department, or(b) by a person providing services to the Secretary of State, or a Northern Ireland Department, in connection with the provision of those services,or information which is held with information so held. (10) The reference in sub-paragraph (9) to functions relating to social security includes a reference to functions relating to any of the matters listed in section 127(8) of the Welfare Reform Act 2012 (statutory payments and maternity allowances).
Offence where information wrongly used or disclosed28 (1) It is an offence for a person to disclose or use information in contravention of paragraph 27(5).
(2) It is a defence for a person charged with an offence under sub-paragraph (1) to prove that the person reasonably believed that the disclosure or use concerned was lawful.
(3) A person guilty of an offence under sub-paragraph (1) is liable—
(a) on conviction on indictment—(i) to imprisonment for a term not exceeding 2 years, or(ii) to a fine, or(iii) to both;(b) on summary conviction—(i) to imprisonment for a period not exceeding 12 months, or(ii) to a fine not exceeding the statutory maximum, or(iii) to both.(4) Sub-paragraph (3)(b) applies—
(a) in England and Wales in relation to offences committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (general limit on power of magistrates’ courts to impose imprisonment), and(b) in Northern Ireland,as if the reference to 12 months were a reference to 6 months.(5) A prosecution for an offence under sub-paragraph (1)—
(a) may be instituted in England and Wales only by or with the consent of the Director of Public Prosecutions, and(b) may be instituted in Northern Ireland only by or with the consent of the Director of Public Prosecutions for Northern Ireland.Part 7Related amendments in Armed Forces Act 2006Community orders: punitive elements29 The Armed Forces Act 2006 is amended as follows.
30 In section 178 (service community orders), in subsection (3) (provisions of the 2003 Act in which “community order” includes a service community order) for “177(3)” substitute “177(2A)”.
31 (1) Section 182 (overseas community orders) is amended as follows.
(2) After subsection (3) insert—
“(3A) In section 177(2A) and (2B) of the 2003 Act (community orders: punitive elements) “community order” includes an overseas community order if the offender is aged 18 or over when convicted of the offence in respect of which the overseas community order is made.”
(3) In subsection (5) (provisions of the 2003 Act in which “court” includes a relevant service court) for “those provisions” substitute “the provisions of the 2003 Act mentioned in subsections (3A) and (4)”.
32 In section 270 (restrictions on community punishments) after subsection (2) insert—
“(2A) Subsection (2) is subject to section 177(2A) of the 2003 Act (community orders: punitive elements) as applied by section 178(3) and section 182(3A).”
33 An amendment made by any of paragraphs 30 to 32 does not affect orders in respect of offences committed before the amendment comes into force.
Removal of limits on compensation orders made against adults34 (1) Section 284 of the Armed Forces Act 2006 (Service Civilian Court compensation orders etc: maximum amounts) is amended as follows.
(2) After subsection (2) insert—
“(2A) The following subsections apply if (but only if) the Service Civilian Court has convicted a person aged under 18 (“the offender”) of an offence or offences.”
(3) In subsection (3) (compensation in respect of an offence not to exceed amount mentioned in section 131(1) of the Powers of Criminal Courts (Sentencing) Act 2000) for “any offence of which the court has convicted the offender” substitute “the offence, or any one of the offences,”.
(4) Nothing in this paragraph affects orders in respect of offences committed before the day on which this paragraph comes into force.
Electronic monitoring of offenders35 (1) The Armed Forces Act 2006 is amended as follows.
(2) In section 182(1A) (requirements which may not be included in overseas community orders) at the end insert “or (m) (an electronic monitoring requirement)”.
(3) In section 183(1) (provisions of Criminal Justice Act 2003 which do not apply to overseas community orders) for “section 215” substitute “sections 215 and 215A”.
Statements of assets and other financial circumstances of offenders etc36 In section 266(2) of the Armed Forces Act 2006 (meaning of “financial statement order”) after “statement of his” insert “assets and other”.”
Lord McNally
“Deferred Prosecution AgreementsPart 1GeneralCharacteristics of a deferred prosecution agreement1 (1) A deferred prosecution agreement (a “DPA”) is an agreement between a designated prosecutor and a person (“P”) whom the prosecutor is considering prosecuting for an offence specified in Part 2 (the “alleged offence”).
(2) Under a DPA—
(a) P agrees to comply with the requirements imposed on P by the agreement;(b) the prosecutor agrees that, upon approval of the DPA by the court (see paragraph 8), paragraph 2 is to apply in relation to the prosecution of P for the alleged offence.Effect of DPA on court proceedings 2 (1) Proceedings in respect of the alleged offence are to be instituted by the prosecutor in the Crown Court by preferring a bill of indictment charging P with the alleged offence (see section 2(2)(ba) of the Administration of Justice (Miscellaneous Provisions) Act 1933 (bill of indictment preferred with consent of Crown Court judge following DPA approval)).
(2) As soon as proceedings are instituted under sub-paragraph (1) they are automatically suspended.
(3) The suspension may only be lifted on an application to the Crown Court by the prosecutor; and no such application may be made at any time when the DPA is in force.
(4) At a time when proceedings are suspended under sub-paragraph (2), no other person may prosecute P for the alleged offence.
Designated prosecutors3 (1) The following are designated prosecutors—
(a) the Director of Public Prosecutions;(b) the Director of the Serious Fraud Office;(c) any prosecutor designated under this paragraph by an order made by the Secretary of State.(2) A designated prosecutor must exercise personally the power to enter into a DPA and, accordingly, any enactment that enables a function of a designated prosecutor to be exercised by a person other than the prosecutor concerned does not apply.
(3) But if the designated prosecutor is unavailable, the power to enter into a DPA may be exercised personally by a person authorised in writing by the designated prosecutor.
Persons who may enter into a DPA with a prosecutor4 (1) P may be a body corporate, a partnership or an unincorporated association, but may not be an individual.
(2) In the case of a DPA between a prosecutor and a partnership—
(a) the DPA must be entered into in the name of the partnership (and not in that of any of the partners);(b) any money payable under the DPA must be paid out of the funds of the partnership.(3) In the case of a DPA between a prosecutor and an unincorporated association—
(a) the DPA must be entered into in the name of the association (and not in that of any of its members);(b) any money payable under the DPA must be paid out of the funds of the association.Content of a DPA5 (1) A DPA must contain a statement of facts relating to the alleged offence, which may include admissions made by P.
(2) A DPA must specify an expiry date, which is the date on which the DPA ceases to have effect if it has not already been terminated under paragraph 9 (breach).
(3) The requirements that a DPA may impose on P include, but are not limited to, the following requirements—
(a) to pay to the prosecutor a financial penalty;(b) to compensate victims of the alleged offence;(c) to donate money to a charity or other third party;(d) to disgorge any profits made by P from the alleged offence;(e) to implement a compliance programme or make changes to an existing compliance programme relating to P’s policies or to the training of P’s employees or both;(f) to co-operate in any investigation related to the alleged offence;(g) to pay any reasonable costs of the prosecutor in relation to the alleged offence or the DPA.The DPA may impose time limits within which P must comply with the requirements imposed on P.(4) The amount of any financial penalty agreed between the prosecutor and P must be broadly comparable to the fine that a court would have imposed on P on conviction for the alleged offence following a guilty plea.
(5) A DPA may include a term setting out the consequences of a failure by P to comply with any of its terms.
Code on DPAs6 (1) The Director of Public Prosecutions and the Director of the Serious Fraud Office must jointly issue a Code for prosecutors giving guidance on—
(a) the general principles to be applied in determining whether a DPA is likely to be appropriate in a given case, and(b) the disclosure of information by a prosecutor to P in the course of negotiations for a DPA and after a DPA has been agreed.(2) The Code may also give guidance on any other relevant matter, including—
(a) the use of information obtained by a prosecutor in the course of negotiations for a DPA;(b) variation of a DPA;(c) termination of a DPA and steps that may be taken by a prosecutor following termination;(d) steps that may be taken by a prosecutor when the prosecutor suspects a breach of a DPA.(3) The Code must be set out in the report made by the Director of Public Prosecutions to the Attorney General under section 9 of the Prosecution of Offences Act 1985 for the year in which the Code is issued.
(4) The Code may from time to time be altered or replaced by agreement between—
(a) the Director of Public Prosecutions,(b) the Director of the Serious Fraud Office, and(c) any prosecutor who is for the time being designated by an order made under paragraph 3.(5) If the Code is altered or replaced, the new Code must be set out in the report made by the Director of Public Prosecutions to the Attorney General under section 9 of the Prosecution of Offences Act 1985 for the year in which the Code is altered or replaced.
(6) A prosecutor must take account of the Code in exercising functions under this Schedule.
Court approval of DPA: preliminary hearing7 (1) After the commencement of negotiations between a prosecutor and P in respect of a DPA but before the terms of the DPA are agreed, the prosecutor must apply to the Crown Court for a declaration that—
(a) entering into a DPA with P is likely to be in the interests of justice, and(b) the proposed terms of the DPA are fair, reasonable and proportionate.(2) The court must give reasons for its decision on whether or not to make a declaration under sub-paragraph (1).
(3) The prosecutor may make a further application to the court for a declaration under sub-paragraph (1) if, following the previous application, the court declined to make a declaration.
(4) A hearing at which an application under this paragraph is determined must be held in private, any declaration under sub-paragraph (1) must be made in private, and reasons under sub-paragraph (2) must be given in private.
Court approval of DPA: final hearing8 (1) When a prosecutor and P have agreed the terms of a DPA, the prosecutor must apply to the Crown Court for a declaration that—
(a) the DPA is in the interests of justice, and(b) the terms of the DPA are fair, reasonable and proportionate.(2) But the prosecutor may not make an application under sub-paragraph (1) unless the court has made a declaration under paragraph 7(1) (declaration on preliminary hearing).
(3) A DPA only comes into force when it is approved by the Crown Court making a declaration under sub-paragraph (1).
(4) The court must give reasons for its decision on whether or not to make a declaration under sub-paragraph (1).
(5) A hearing at which an application under this paragraph is determined may be held in private.
(6) But if the court decides to approve the DPA and make a declaration under sub-paragraph (1) it must do so, and give its reasons, in open court.
(7) Upon approval of the DPA by the court, the prosecutor must publish—
(a) the DPA,(b) the declaration of the court under paragraph 7 and the reasons for its decision to make the declaration,(c) in a case where the court initially declined to make a declaration under paragraph 7, the court’s reason for that decision, and (d) the court’s declaration under this paragraph and the reasons for its decision to make the declaration,unless the prosecutor is prevented from doing so by an enactment or by an order of the court under paragraph 12 (postponement of publication to avoid prejudicing proceedings).Breach of DPA9 (1) At any time when a DPA is in force, if the prosecutor believes that P has failed to comply with the terms of the DPA, the prosecutor may make an application to the Crown Court under this paragraph.
(2) On an application under sub-paragraph (1) the court must decide whether, on the balance of probabilities, P has failed to comply with the terms of the DPA.
(3) If the court finds that P has failed to comply with the terms of the DPA, it may—
(a) invite the prosecutor and P to agree proposals to remedy P’s failure to comply, or(b) terminate the DPA.(4) The court must give reasons for its decisions under sub-paragraphs (2) and (3).
(5) Where the court decides that P has not failed to comply with the terms of the DPA, the prosecutor must publish the court’s decision and its reasons for that decision, unless the prosecutor is prevented from doing so by an enactment or by an order of the court under paragraph 12 (postponement of publication to avoid prejudicing proceedings).
(6) Where the court invites the prosecutor and P to agree proposals to remedy P’s failure to comply, the prosecutor must publish the court’s decisions under sub-paragraphs (2) and (3) and the reasons for those decisions, unless the prosecutor is prevented from doing so by an enactment or by an order of the court under paragraph 12 (postponement of publication to avoid prejudicing proceedings).
(7) Where the court terminates a DPA under sub-paragraph (3)(b), the prosecutor must publish—
(a) the fact that the DPA has been terminated by the court following a failure by P to comply with the terms of the DPA, and(b) the court’s reasons for its decisions under sub-paragraphs (2) and (3),unless the prosecutor is prevented from doing so by an enactment or by an order of the court under paragraph 12 (postponement of publication to avoid prejudicing proceedings).(8) If the prosecutor believes that P has failed to comply with the terms of the DPA but decides not to make an application to the Crown Court under this paragraph, the prosecutor must publish details relating to that decision, including—
(a) the reasons for the prosecutor’s belief that P has failed to comply, and(b) the reasons for the prosecutor’s decision not to make an application to the court,unless the prosecutor is prevented from doing so by an enactment or by an order of the court under paragraph 12 (postponement of publication to avoid prejudicing proceedings).Variation of DPA10 (1) At any time when a DPA is in force, the prosecutor and P may agree to vary its terms if—
(a) the court has invited the parties to vary the DPA under paragraph 9(3)(a), or(b) variation of the DPA is necessary to avoid a failure by P to comply with its terms in circumstances that were not, and could not have been, foreseen by the prosecutor or P at the time that the DPA was agreed.(2) When the prosecutor and P have agreed to vary the terms of a DPA, the prosecutor must apply to the Crown Court for a declaration that—
(a) the variation is in the interests of justice, and(b) the terms of the DPA as varied are fair, reasonable and proportionate.(3) A variation of a DPA only takes effect when it is approved by the Crown Court making a declaration under sub-paragraph (2).
(4) The court must give reasons for its decision on whether or not to make a declaration under sub-paragraph (2).
(5) A hearing at which an application under this paragraph is determined may be held in private.
(6) But if the court decides to approve the variation and make a declaration under sub-paragraph (2) it must do so, and give its reasons, in open court.
(7) Where the court decides not to approve the variation, the prosecutor must publish the court’s decision and the reasons for it, unless the prosecutor is prevented from doing so by an enactment or by an order of the court under paragraph 12 (postponement of publication to avoid prejudicing proceedings).
(8) Where the court decides to approve the variation the prosecutor must publish—
(a) the DPA as varied, and(b) the court’s declaration under this paragraph and the reasons for its decision to make the declaration,unless the prosecutor is prevented from doing so by an enactment or by an order of the court under paragraph 12 (postponement of publication to avoid prejudicing proceedings).Discontinuance of proceedings on expiry of DPA 11 (1) If a DPA remains in force until its expiry date, then after the expiry of the DPA the proceedings instituted under paragraph 2(1) are to be discontinued by the prosecutor giving notice to the Crown Court that the prosecutor does not want the proceedings to continue.
(2) Where proceedings are discontinued under sub-paragraph (1), fresh criminal proceedings may not be instituted against P for the alleged offence.
(3) But sub-paragraph (2) does not prevent fresh proceedings from being instituted against P in a case where, after a DPA has expired, the prosecutor finds that, during the course of the negotiations for the DPA—
(a) P provided inaccurate, misleading or incomplete information to the prosecutor, and(b) P knew or ought to have known that the information was inaccurate, misleading or incomplete.(4) A DPA is not to be treated as having expired for the purposes of sub-paragraph (1) if, on the expiry date specified in the DPA—
(a) an application made by the prosecutor under paragraph 9 (breach) has not yet been decided by the court,(b) following an application under paragraph 9 the court has invited the parties to agree proposals to remedy P’s failure to comply, but the parties have not yet reached an agreement, or(c) the parties have agreed proposals to remedy P’s failure to comply following an invitation of the court under paragraph 9(3)(a) but P has not yet complied with the agreement.(5) In the case mentioned in sub-paragraph (4)(a)—
(a) if the court decides that P has not failed to comply with the terms of the DPA, or that P has failed to comply but does not take action under paragraph 9(3), the DPA is to be treated as expiring when the application is decided;(b) if the court terminates the DPA, the DPA is to be treated as not having remained in force until its expiry date (and sub-paragraph (1) therefore does not apply);(c) if the court invites the parties to agree proposals to remedy P’s failure to comply, the DPA is to be treated as expiring when the parties have reached such an agreement and P has complied with it. (6) In the case mentioned in sub-paragraph (4)(b), the DPA is to be treated as expiring when the parties have reached an agreement and P has complied with it.
(7) In the case mentioned in sub-paragraph (4)(c), the DPA is to be treated as expiring when P complies with the agreement.
(8) Where proceedings are discontinued under sub-paragraph (1), the prosecutor must publish—
(a) the fact that the proceedings have been discontinued, and(b) details of P’s compliance with the DPA,unless the prosecutor is prevented from doing so by an enactment or by an order of the court under paragraph 12 (postponement of publication to avoid prejudicing proceedings).Court order postponing publication of information by prosecutor12 The court may order that the publication of information by the prosecutor under paragraph 8(7), 9(5), (6), (7) or (8), 10(7) or (8) or 11(8) be postponed for such period as the court considers necessary if it appears to the court that postponement is necessary for avoiding a substantial risk of prejudice to the administration of justice in any legal proceedings.
Use of material in criminal proceedings13 (1) Sub-paragraph (2) applies where a DPA between a prosecutor and P has been approved by the Crown Court under paragraph 8.
(2) The statement of facts contained in the DPA is, in any criminal proceedings brought against P for the alleged offence, to be treated as an admission by P under section 10 of the Criminal Justice Act 1967 (proof by formal admission).
(3) Sub-paragraph (4) applies where a prosecutor and P have entered into negotiations for a DPA but the DPA has not been approved by the Crown Court under paragraph 8.
(4) Material described in sub-paragraph (6) may only be used in evidence against P—
(a) on a prosecution for an offence consisting of the provision of inaccurate, misleading or incomplete information, or(b) on a prosecution for some other offence where in giving evidence P makes a statement inconsistent with the material.(5) However, material may not be used against P by virtue of sub-paragraph (4)(b) unless evidence relating to it is adduced, or a question relating to it is asked, by or on behalf of P in the proceedings arising out of the prosecution.
(6) The material is—
(a) material that shows that P entered into negotiations for a DPA, including in particular—(i) any draft of the DPA;(ii) any draft of a statement of facts intended to be included within the DPA;(iii) any statement indicating that P entered into such negotiations;(b) material that was created solely for the purpose of preparing the DPA or statement of facts.Money received by prosecutor under a DPA14 Any money received by a prosecutor under a term of a DPA that provides for P to pay a financial penalty to the prosecutor or to disgorge profits made from the alleged offence is to be paid into the Consolidated Fund.
Part 2Offences in relation to which a DPA may be entered intoCommon law offences15 Conspiracy to defraud.
16 Cheating the public revenue.
Statutory offences17 An offence under any of the following sections of the Theft Act 1968—
(a) section 1 (theft); (b) section 17 (false accounting);(c) section 20 (suppression etc of documents);(d) section 24A (dishonestly retaining a wrongful credit).18 An offence under any of the following sections of the Customs and Excise Management Act 1979—
(a) section 68 (offences in relation to exportation of prohibited or restricted goods);(b) section 167 (untrue declarations etc);(c) section 170 (fraudulent evasion of duty etc).19 An offence under any of the following sections of the Forgery and Counterfeiting Act 1981—
(a) section 1 (forgery);(b) section 2 (copying a false instrument);(c) section 3 (using a false instrument);(d) section 4 (using a copy of a false instrument);(e) section 5 (offences relating to money orders, share certificates, passports etc).20 An offence under section 450 of the Companies Act 1985 (destroying, mutilating etc company documents).
21 An offence under section 72 of the Value Added Tax Act 1994 (fraudulent evasion of VAT).
22 An offence under any of the following sections of the Financial Services and Markets Act 2000—
(a) section 23 (contravention of prohibition of carrying on regulated activity unless authorised or exempt);(b) section 25 (contravention of restrictions on financial promotion);(c) section 85 (prohibition of dealing etc in transferable securities without approved prospectus);(d) section 346 (provision of false or misleading statements to auditor or actuary);(e) section 397 (misleading statements and practices);(f) section 398 (misleading the FSA).23 An offence under any of the following sections of the Proceeds of Crime Act 2002—
(a) section 327 (concealing etc criminal property);(b) section 328 (arrangements facilitating acquisition etc of criminal property);(c) section 329 (acquisition, use and possession of criminal property);(d) section 330 (failing to disclose knowledge or suspicion of money laundering);(e) section 333A (tipping off).24 An offence under any of the following sections of the Companies Act 2006—
(a) section 658 (general rule against limited company acquiring its own shares);(b) section 680 (prohibited financial assistance);(c) section 993 (fraudulent trading).25 An offence under any of the following sections of the Fraud Act 2006—
(a) section 1 (fraud);(b) section 6 (possession etc of articles for use in frauds);(c) section 7 (making or supplying articles for use in frauds);(d) section 11 (obtaining services dishonestly).26 An offence under any of the following sections of the Bribery Act 2010—
(a) section 1 (bribing another person);(b) section 2 (being bribed);(c) section 6 (bribery of foreign public officials);(d) section 7 (failure of commercial organisations to prevent bribery). 27 An offence under regulation 45 of the Money Laundering Regulations 2007 (S.I. 2007/2157).
Ancillary offences28 Any ancillary offence relating to an offence specified in this Part.
Interpretation of this Part29 “Ancillary offence”, in relation to an offence, means—
(a) aiding, abetting, counselling or procuring the commission of the offence;(b) an offence under Part 2 of the Serious Crime Act 2007 (encouraging or assisting crime) in relation to the offence;(c) attempting or conspiring to commit the offence.30 This Schedule applies in relation to conduct occurring before the commencement of this Schedule as if an offence specified in this Part included any corresponding offence under the law in force at the time of the conduct (and for the purposes of this paragraph, the common law offence of inciting the commission of another offence is to be treated as an offence corresponding to an offence under Part 2 of the Serious Crime Act 2007).
Power to amend this Part31 The Secretary of State may by order amend this Part by—
(a) adding an offence of financial or economic crime;(b) removing an offence.Part 3Deferred Prosecution Agreements: Consequential and Transitional ProvisionConsequential amendments32 In section 2 of the Administration of Justice (Miscellaneous Provisions) Act 1933 (procedure for indictment of offenders), in subsection (2) after paragraph (b) insert—
“(ba) the bill is preferred with the consent of a judge of the Crown Court following a declaration by the court under paragraph 8(1) of Schedule (Deferred prosecution agreements) to the Crime and Courts Act 2013 (court approval of deferred prosecution agreement); or”.33 In section 2 of the Criminal Procedure (Attendance of Witnesses) Act 1965 (issue of witness summons on application to the Crown Court), after subsection (6) insert—
“(6A) Where the proceedings concerned relate to an offence that is the subject of a deferred prosecution agreement within the meaning of Schedule (Deferred prosecution agreements) to the Crime and Courts Act 2013, an application must be made as soon as is reasonably practicable after the suspension of the proceedings is lifted under paragraph 2(3) of that Schedule.”
34 In Schedule 1 to the Contempt of Court Act 1981 (times when proceedings are active for purposes of strict liability rule for contempt of court), in paragraph 7, after paragraph (aa) insert—
“(ab) in England and Wales, if they are discontinued by virtue of paragraph 11 of Schedule (Deferred prosecution agreements) to the Crime and Courts Act 2013 (deferred prosecution agreements);”.35 In section 15 of the Prosecution of Offences Act 1985 (interpretation), in subsection (2)(d) after “(b)” insert “or (ba)”.
36 In section 51 of the Criminal Justice and Public Order Act 1994 (intimidation etc of witnesses, jurors and others), in subsection 10(a)(iii) after “2(2)(b)” insert “or (ba)”.
37 (1) The Criminal Procedure and Investigations Act 1996 is amended as follows.
(2) In section 1 (application of Part 1: disclosure), in subsection (2), after paragraph (f) insert “, or
(g) following the preferment of a bill of indictment charging a person with an indictable offence under the authority of section 2(2)(ba) of the Administration of Justice (Miscellaneous Provisions) Act 1933 (bill of indictment preferred with consent of Crown Court judge following approval of deferred prosecution agreement), the suspension of the proceedings against the person under paragraph 2(2) of Schedule (Deferred prosecution agreements) to the Crime and Courts Act 2013 is lifted under paragraph 2(3) of that Schedule.” (3) In section 28 (application of Part 3: preparatory hearings), in subsection (1)(c) after “2(2)(b)” insert “or (ba)”.
(4) In section 39 (meaning of pre-trial hearing), in subsection (2)(a) after “2(2)(b)” insert “or (ba)”.
(5) In Schedule 3 (fraud), in paragraph 8(1)(c) after “2(2)(b)” insert “or (ba)”.
38 In section 85 of the Proceeds of Crime Act 2002 (proceedings), in subsection (1)(c) at the end insert “or subsection (2)(ba) of that section (preferment by Crown Court judge following approval of deferred prosecution agreement)”.
Transitional provision39 (1) Conduct constituting an alleged offence that occurred before the relevant commencement day may be taken into account for the purposes of this Schedule.
(2) In this paragraph, the “relevant commencement day” means—
(a) in a case where the alleged offence is an offence that is specified in Part 2 when this Schedule comes into force, the day on which this Schedule comes into force;(b) in a case where the alleged offence is an offence that is subsequently added to Part 2 (whether by order under paragraph 31 or otherwise), the day when the enactment adding that offence to Part 2 comes into force.”
Lord McNally
First, I thank the House for its understanding. I am sure that your Lordships will not find when you wake up tomorrow morning that you have cleared the Bill at all its stages and that it will not be coming back. It was a slightly unusual procedure and I am very grateful to the House for its co-operation on it. I hope that once people have had a chance to look at Hansard and see the new shape of the Bill we can, in two weeks’ time, have a proper Committee stage with amendments and the rest. We now turn to the second part of what we were trying to do, which is to bring in the deferred prosecution agreement.
These amendments introduce a new tool for tackling corporate economic crime: deferred prosecution agreements. DPAs will enable more organisations involved in wrongdoing to be brought to justice and secure better outcomes for victims. Last year alone, fraud cost its victims and the taxpayer an estimated £73 billion. This is unacceptable. More needs to be done to hold organisations involved in such wrongdoing to account. As noble Lords will be aware, this Government are committed to making sure that there is the same tough response to economic crime as for any other kind of offending. This harmful activity, which undermines the economy, must be tackled.
We have already brought into force the Bribery Act 2010 and published a national strategic plan, Fighting Fraud Together. Furthermore, the Bill will establish the National Crime Agency, which will have a strong focus on combating economic crime. DPAs are the next step in the battle against economic crime. Currently, prosecuting an organisation for economic crime can pose significant challenges. Such prosecutions often take many years and cost millions of pounds. In many cases, a prosecution and conviction can do more harm than good. Organisations may go out of business, shareholders may lose their investments and employees may be out of work.
The key elements of this scheme are set out in the proposed new schedule in this group of amendments. A DPA will be a voluntary agreement between a prosecutor and an organisation under investigation for economic crime. In return for complying with tough terms and conditions, a prosecution will be commenced but deferred for the duration of the agreement. If the organisation successfully complies with the terms of the agreement, the prosecution will be dropped. In this way, organisations would be held to account for their wrongdoing without the uncertainty, expense or length of a criminal trial. However, if the organisation does not comply with the agreement they can be prosecuted in the usual way. The agreement will be subject to oversight and scrutiny by the judiciary to ensure that it is in the interests of justice and that its terms are fair, reasonable and proportionate. Once agreed and approved by the court the agreement will be fully transparent, with the terms being published for all to see.
Initially, the Director of Public Prosecutions and the director of the Serious Fraud Office will be the only prosecutors able to enter into a DPA. This is because they are, by and large, the prosecutors responsible for bringing proceedings for the relevant offences. However, this may not always be the case. The list of relevant economic offences set out in Part 2 of the proposed new schedule may change, as might the role and remit of different prosecutors. That is why we have provided a power for the Secretary of State to designate further prosecutors as being capable of entering into a DPA. Any decision by a prosecutor to enter into a DPA must be made by the director of the relevant prosecuting agency personally, to ensure that there is prosecutorial oversight of each agreement at the highest level.
These agreements may be used only to address alleged economic offending by organisations. Let me be clear: a DPA cannot be entered into with an individual, nor may they be entered into for just any crime. They have been developed to provide an additional tool to assist in the battle against economic wrongdoing by organisations. Individuals who commit economic crime will be best dealt with through criminal prosecution, where a range of punishments and sanctions are available—including the ultimate punishment of imprisonment.
Paragraph 5 of the proposed new schedule sets out the terms that a DPA must and may contain. If DPAs are to be meaningful, they must make clear what wrongdoing they seek to address and what sanctions are being imposed for dealing with this. For that reason, every DPA will contain a statement agreed between the parties setting out the facts of the case.
Each agreement will set out stringent measures with which an organisation must comply. These measures will need to be proportionate to the alleged wrongdoing and capable of being tailored to the facts of the case. The proposed new schedule does not set out every possible term and condition; that is for the parties to decide. However, it does provide examples of terms that might be appropriate. The terms may include compensating victims of the organisation’s wrongdoing and payment of a financial penalty. Other conditions may require the organisation to put in place a robust compliance and monitoring programme or to pay the prosecutor’s costs.
In determining the level of any financial penalty, the amount must broadly reflect the fine that a court would have imposed on a conviction following an early guilty plea by the organisation. Both parties will need to take account of the various factors that would be considered by a sentencing court, including relevant sentencing guidelines relating to offences, application of the early guilty plea reduction and the means of the organisation. Organisations will not be getting off lightly.
Lord Beecham
My Lords, the Minister may not have noticed but during his speech the clock stopped after seven minutes so we had “007” on the clock. Having seen “Skyfall” the other night, I do not quite see the noble Lord as Daniel Craig mark II, but I am sure that he would do very well in that capacity.
Lord McNally
The noble Lord should see me in my swimming trunks before making that judgment.
Lord Beecham
I am too young to appreciate that offer.
It is ironic that notice of the Government’s intention to proceed with amendments to the Bill to legislate for deferred prosecution agreements should itself have been deferred until barely a week before today’s debate. It is quite unacceptable for material to be made available—indeed, its very existence to be revealed—only five days ago. I appreciate that this is by way of a Second Reading debate but Ministers must have formed the intention of bringing these measures forward months ago, presumably at a time when the expected debate on community sentencing had been scheduled to take place very soon after the end of the Summer Recess. I assume that the date was altered to accommodate the change of Lord Chancellor. It is reasonable to seek to accommodate Ministers in such circumstances but entirely unreasonable to make so little effort to accommodate Members of your Lordships’ House. For the record, can we know whether the new Lord Chancellor is to be in charge of this part of the Bill or whether Mr Clarke will be responsible for it in the time he now has to spare without an attachment to a portfolio? Can the Minister also say when the Explanatory Notes for this part of the Bill will be available to Members of your Lordships’ House?
It is not as if the Government’s proposals are unimportant, breaking new ground as they do, in our system of justice. I acknowledge immediately that consideration was given to and work undertaken around the issues raised in this belated addition to the Bill by the previous Government. Indeed, it might be argued that they are, in a way, an extension of the conditional cautions introduced by the previous Government, although, as my noble and learned friend Lord Goldsmith—who might claim paternity of that policy—has pointed out to me, they are at the other end of the offending scale.
We are, after all, apparently seeking to emulate the American system, under which what are often described as aggressive prosecutors drive hard bargains with offending corporations resulting in huge payments—five times as much, or sometimes much more than that, according to the impact statement, as is likely to be yielded under what we are now contemplating.
I confess to an initial reluctance to embrace a situation in which, in the area of economic crime—for that, as the Minister has made clear, is the area to which the proposals are addressed—one class of defendants should have the opportunity of buying off a prosecution for a one-third discount or, to be more precise, an up to one-third discount, of the fine they might otherwise have to pay. The Committee will need to be convinced that such an approach is acceptable in all the circumstances, and the public will need to be convinced that we are not creating a privileged class of potential defendants without achieving a significant benefit, not only in cash terms but also in terms of corporate behaviour. Hugging a hoodie was never an attractive notion to many people. Hugging a bent bank or crooked company is even less likely to appeal.
Is not the reality that these proposals stem essentially from the failure of the Serious Fraud Office to tackle economic crime effectively? It brings few cases and, all too often, as in the recent Tchenguiz case, fails lamentably to prove them after devoting years to the task. That case evinced a warning from the High Court that the Serious Fraud Office did not have the,
“proper resources, both human and financial”,
to investigate it and, by implication, others like it.
The question arises as to whether Ministers believe that the SFO has the resources to do its job effectively, not least in the light of budget cuts already amounting to £7 million, or 19%, since 2009-10, and planned to fall by a further £3 million, or 7%, by 2015.
Noble Lords may be surprised to learn, as I was, that top salaries in the Serious Fraud Office are in the range of £70,000 to £80,000 per annum, roughly what an assistant solicitor in a City firm acting for corporate clients might expect to earn soon after qualifying.
Unsurprisingly, the SFO has tended to use civil recovery orders under the Proceeds of Crime Act, a process which has aroused the concern of the OECD, not least because such a procedure does not lead to a disclosure of the nature of the wrongdoing or the basis of the settlement. I appreciate that the Minister has made it clear that these proposals would, in the event of matters being concluded, lead to such a disclosure and also, presumably, the basis of the settlement. The whole scenario hitherto smacks of recent concerns about the manner in which Her Majesty’s Revenue and Customs have apparently settled claims on terms appearing too generous to some major companies.
Will the new proposals be better resourced than the present system under the SFO which is signally prone to failure, as it has proved? Will the relevant agencies have the,
“proper resources, both human and financial”
to emulate its American counterparts? Will the Government look again at the issue of vicarious liability for the dishonesty of corporate employees rather than relying on the present, if archaic, doctrine of the directing mind, under which there is no such liability on behalf of the corporation unless a director or senior manager is involved?
In their response to the consultation document the Government indicated that they would,
“limit the application of DPAs to economic crimes, but provide for the list of economic crimes for which a DPA is available to be amended”.
Will this be by regulation or primary legislation and, if the former, by the affirmative or negative procedure?
Lord Goldsmith
My Lords, first I want to declare an interest. As my noble friend Lord Beecham said, I had something to do with an earlier consideration of similar problems when my party was in Government and I was in office, and I want to say something about that in a moment. I also declare that I am currently a practising lawyer and that I and my firm get involved in the sort of cases that this may be concerned with. I have seen how these systems work in the United States and I have thought about them quite hard. I want to make it clear that broadly speaking I am in favour of the proposal for deferred prosecution agreements. However, I have some questions that I will come to, and I understand very well the point made by my noble friend about the timing of the proposals being brought forward.
Before I turn to the substance of what I want to say, I am a little confused at the moment about the procedure that is being followed. This may be because unfortunately I was detained from coming to the House when noble Lords were considering the previous group of amendments. I came in at the tail end to hear something that I am not quite sure I understood, about matters being discussed again on a future occasion. But unless I have misunderstood, I notice that the noble Lord, Lord McNally, has moved government Amendment 155ZB, which provides for the introduction of a schedule relating to deferred prosecution agreements. Without, as it were, dissent, we seem at least to have got the concept of a schedule into the Bill. Whether that means that the noble Lord is going to move the schedule as a complete schedule, I am not sure, but if he does, that gives rise to questions about whether there will be any real opportunity to debate or amend its provisions. I want to ask some questions about the detail, so I would be grateful if the noble Lord could explain the situation.
Lord McNally
We are all in a form of something that is not quite unique territory. Because we have used this device, it may be that an eagle-eyed lawyer will spot a contradiction in process. What I will give as an absolute guarantee to the Committee, by whatever means we use to do it, is that this is intended as if it were a Second Reading debate. Any amendments that need to be made and any further consideration of the detail will be permitted when we come back to the Bill on 13 November. I hope that that gives the noble and learned Lord the reassurance he is seeking.
Lord Phillips of Sudbury
My Lords, I did not expect to be able to be here this afternoon. In many ways, I wish I was not, because I am afraid that I take a rather different view from anyone who has spoken so far—except the noble Lord, Lord Beecham. I sympathise with my noble friend the Minister because this is a really difficult area to address in terms of a change in the law, because plainly the present situation is utterly hopeless.
Following the staggering series of events of the past five years, with the collapse of the financial centres of the world, in particular the City, which has required £80 billion of taxpayers’ money to shore up a system that has, let us be frank, been deeply corrupted—a great deal of the failure of the markets was not through lack of prudential wisdom but through market manipulation and criminality of various kinds—not one single person has been prosecuted and put behind bars. I accept what my noble friend the Minister said in opening, that we need to do something, but what we need to do is not to compromise the basic principle of equality before the law—because that is what we are doing—it is to beef up, hugely, the prosecuting authorities in this country. We have played boys’ games with these matters until now.
I had a meeting with the previous head of the Serious Fraud Office and I think I am right in saying that there are a puny number of highly qualified lawyers there to deal with what are the most difficult forms of prosecution on earth. He told me that his entire team would be outmatched by the lawyers and accountants hired by a bank to face a would-be prosecution that the SFO was considering.
It is not right for us to contemplate this fundamentally unacceptable measure until and unless we have summoned the necessary political will to give the prosecuting authorities a chance of doing their job because, hitherto, we have not. I for one would be willing to see a tenfold or twentyfold increase in the necessary personnel, with the necessary increase in their remuneration. The noble Lord, Lord Beecham, was correct that the disparity in remuneration between the gentlemen and ladies in the Serious Fraud Office and the private sector is crazy. I would confront those difficulties and pay for their remedy. Were there effective prosecutions in this country, the fines that resulted from prosecutions of very large institutions for very large frauds would, I suspect, pay for the increase in the prosecuting resources many times over.
We have to be honest with ourselves and with the country over this. This is plea-bargaining. This is breaking the rule of equality before the law because it places huge, powerful, sophisticated companies engaged in premeditated and long-term fraud in a different position from that of a man or woman had up before the local magistrates for shoplifting. That is another form of economic crime. We are driving a coach and horses through the ancient and proper traditions of this country by giving privilege—that is what it boils down to—to the already rich and powerful. My noble friend said in opening that they are not “getting off lightly”. Well, I have to disabuse him: they are getting off extraordinarily lightly. To start with, there is no naming and shaming. When these matters are brought before the court for approval, there will not be facts there given that will hold up for public contempt the main architects of whatever fraud we are talking about. Least of all will there be prosecution and conviction, which will then of course strike very hard at the reception of that by the individuals who are prosecuted and convicted. Perhaps I may ask my noble friend this important question. Will this legislation prevent individual directors and executives of companies entering into a DPA being prosecuted afterwards for their part in the frauds concerned? If they are not susceptible to subsequent prosecution, that is a further failure of the proposed new regime.
This is a more important departure from the status quo than some may realise. This is pure realpolitik of a sort that it is not right for us to contemplate until— I repeat—we have tried giving prosecuting authorities the resources to deal with the offences being committed. As I have said, we are a million miles from that.
Lord McNally
My Lords, again, this has been an extremely useful exercise. I am glad that we have done it in a way which has allowed this Second Reading-style debate. My noble friend Lord Phillips said that he wished that he was not here. I sometimes share his ambitions in that regard.
My noble friend demanded 10 times the budget and 20 times the personnel for the Serious Fraud Office, with an increase in their remuneration. I say with no sense of arrogance that that is the difference between making speeches up there and making them down here. It would be very easy to say, “Oh, well, we’re going spend all this money”, but the reality is—
Lord Phillips of Sudbury
My noble friend does not do my argument justice. I was saying that if the Serious Fraud Office did that, and if prosecutions were brought and convictions obtained, the fines that resulted would cover those costs. A couple of years ago in New York, KMPG was fined $450 million on a plea bargain. That would pay for a lot of people.
Lord McNally
Yes, I did hear the tail end of my noble friend’s argument where he said that it would all be self-financing, which is always another dangerous thing to say in government.
But, yes, I agree. As the noble and learned Lord, Lord Goldsmith, indicated, it has been the ambition of successive Governments to nail down the problem of white collar crime. If they have not done so, it has not been for want of trying. This is obviously a toe-dipping exercise. The noble Baroness, Lady Hamwee, said that we really needed a seminar. I had the benefit of a seminar at an early stage of the process, because Sir Edward Garnier, when he was Solicitor-General, was the first to try to convince me of the usefulness of deferred prosecution agreements. They are, I freely confess, a very pragmatic approach to the problem. It is not as pure an approach as that for which the noble Lord, Lord Phillips, very powerfully argued, but it seems to me to offer real results. As has been pointed by a number of speakers, it is not entirely new to English law in that there are some parallels with environmental legislation and the 2003 legislation to which the noble and learned Lord, Lord Goldsmith, referred.
This is a test to see what kind of results we can get from this approach, with an opportunity perhaps to extend it later. I heard what was said by the noble and learned Lords, Lord Woolf and Lord Goldsmith, and the noble Lords, Lord Beecham and Lord Marks, about individuals as well as companies. We decided not to take it that far. The noble and learned Lord, Lord Woolf, said that we should look again and I am sure that an appropriate amendment will be tabled for the second part of this Committee stage that allows me to address the Government’s concerns about taking it more widely at that point. At the moment, the Government’s view is that this is a prudent move in the direction of seeing whether deferred prosecution agreements can work effectively, and if they do, they would then, as the noble Lord, Lord Marks, said, start to find their way into our system more easily. I fully agree with the noble and learned Lord, Lord Goldsmith, that it would not just be a matter of patching up previous behaviour but of making sure that there was, as part of any agreement, monitored good behaviour for the future.
Lord Beecham
I am not asking the Minister to reply now because noble Lords are waiting for the next debate, but I remind him that I raised two questions about Parliament’s role in relation to the Bill; first, in relation to the code which the Director of Public Prosecutions and the director of the Serious Fraud Office will produce and, secondly, in relation to penalties which the Sentencing Council will propose. We are concerned about that area, as will be other Members of your Lordships’ House. A reply about that would be helpful before we get to the next stage.
Lord McNally
I am grateful to the noble Lord. I could try and busk it now but it would be far more sensible to write to him and share that with the Committee. To make us entirely in order for our debate on 13 November, when amendments will be acceptable and we will be back on course as a normal Committee day, I must now move Amendment 155EZC.
Lord McNally
(b) where Part 4 of Schedule (Dealing non-custodially with offenders) and section (Dealing non-custodially with offenders) so far as relating to that Part of that Schedule are brought into force in relation to a specified area for a specified period, in connection with those provisions ceasing to be in force at the end of that period or at the end of that period as continued under section 31(4B).”
Lord McNally
Lord McNally
“(4A) An order which brings the monitoring provisions into force only in relation to a specified area may provide that they are to be in force in relation to that area for a specified period; and in this subsection and subsection (4B) “the monitoring provisions” means Part 4 of Schedule (Dealing non-custodially with offenders), and section (Dealing non-custodially with offenders) so far as relating to that Part of that Schedule.
(4B) An order containing the provision permitted by subsection (4A) may be amended by a subsequent order under subsection (2) so as to continue the monitoring provisions in force in relation to the area concerned for a further period.”
Lord McNally
(a) section 22;(b) paragraph 28 of Schedule (Dealing non-custodially with offenders) and section (Dealing non-custodially with offenders) so far as relating to that paragraph, but only so far as relating to disclosure or use of information by a person appointed under section 2(1) of the Courts Act 2003 or provided under a contract made by virtue of section 2(4) of that Act;(c) ”
Lord McNally