Crime and Courts Bill [HL]

Lord Goldsmith Excerpts

Tuesday 18th December 2012 Lords Chamber

Moved by

[Lord Goldsmith]

11: Schedule 16, page 273, line 36, leave out “broadly comparable to” and insert “not more than”

[Lord Goldsmith]

My Lords, this amendment can be dealt with briefly, and I would have said that before the Chief Whip made her statement. It concerns the question of the extent of the discretion that prosecutors will have, subject to the double lock of supervision by the courts, in reaching agreements on deferred prosecution agreements. Along with other noble Lords, including the noble Lord, Lord Marks of Henley-on-Thames, I have been concerned that the Bill does not appear to provide a discretion on the maximum reduction of financial penalty. For example, on 10 December at col. 968 the noble Lord, Lord Ahmad of Wimbledon, talked about a maximum discount of one-third, and it was not the first time that that had been said. That led me to consider whether that was the view of the prosecutors, and having made inquiries of them, it turns out that that is not what they thought the Bill was going to do. It was because of that, and only because of that, that I wanted to raise the matter again for clarification.

I wrote to the noble Lord, Lord McNally, and I am grateful to him and to his officials for his detailed response. What I asked in substance was whether it was in fact the case that one-third was not the maximum discount on the financial penalty that could be agreed; it could be greater than that. I understand from the Minister’s response that, shortly put, the one-third discount is not the maximum that can be agreed and that in appropriate cases, there could be an agreement—I underline, subject to the agreement of the court—which could be greater than that. If that clarification can be made, which otherwise would go uncorrected, although I personally would still prefer to see a greater discretion, at least it would deal with the major problem of an apparent one-third maximum reduction. For those reasons, I beg to move.

[Lord Beecham]

My Lords, I support the amendment moved by my noble and learned friend, although I do not anticipate that he will seek to divide the House on it. It is interesting to note that the amendment has come before the House on the same day as a question from the noble Baroness, Lady Williams of Crosby, that referred, of course, to the settlement of cases in America. She referred to a billion-pound settlement reached under a deferred prosecution agreement over there and contrasted that with the very modest levels of financial penalty incurred in this country under processes that usually involve the Serious Fraud Office or, in revenue cases, Her Majesty’s Revenue and Customs.

Throughout our debates on deferred prosecution agreements, my noble and learned friend has pointed to the need to incentivise potential corporate defendants. At the moment they are only corporate defendants, but in due course there may be a case for extending them to individual defendants. He has stressed the need to adopt this procedure rather than rely on prosecution because, as has been pointed out on several occasions, the success rate of the Serious Fraud Office in these cases has been, to put it mildly, not very marked. Unless there is a credible threat of a successful prosecution, there is virtually no incentive for a defendant corporation to plead guilty and every incentive for it to contest the case. The corporation has a very reasonable prospect of being successful. The case would seem to be similar in revenue cases, hitherto at any rate. HMRC has been apt to settle for rather more modest amounts than one might have expected relative to the level of abuse that is alleged to have taken place. The advantage of the agreements, as has been pointed out by my noble and learned friend and several other noble Lords, is not only that there is a financial penalty available as part of the agreement, but that other measures are available as well.

An additional reason for the Government, through their relevant agencies, to press for a deferred prosecution agreement is because, first, there is a greater incentive for companies to settle, knowing that they will not have to meet the full costs which they can take into account in balancing their considerations about whether to defend or not, and secondly, from the public interest perspective, there can be additional conditions that might apply to such an agreement. Those might be monitoring, changes in practice and so on. Furthermore, there can be a period during which matters can be reviewed. All of this suggests that greater flexibility in discounting from what might be expected to be the maximum fine would assist the whole process, although that does raise the question of what the sentencing guidelines from the Sentencing Council will be with regard to these penalties. Perhaps we ought to be moving more in the direction of the level of fines imposed under the American system, which it is hoped would increase the incentives.

My noble and learned friend is clearly minded to accept the position on the basis of the Minister’s letter. From the Opposition’s perspective, we are content with that, and we look forward to seeing in due course how the system moves forward. We would hope also to have an opportunity to review it, as has been discussed in previous debates. I commend my noble and learned friend on his persistence in this matter and the Minister on what has apparently been a sympathetic response.

[Lord Ahmad of Wimbledon]

My Lords, it is always a pleasure to respond to the noble and learned Lord, Lord Goldsmith, at a rather earlier hour than has been the case in our previous exchanges, and that is always welcome. However, perhaps it is later than I thought would be the case.

Following the debate on Report, I know that my noble friend Lord McNally has corresponded with the noble and learned Lord and reassured him that paragraph 5(4) of Schedule 16 affords a broad discretion to prosecutors and the court when considering a financial penalty term for a deferred prosecution agreement. In particular, on the specific point raised by the noble and learned Lord, my noble friend Lord McNally has confirmed in his letter that the extent of the discretion is such that scope to reduce financial penalty will not be restricted to a maximum of one-third in all cases.

It is appropriate that the noble and learned Lord, Lord Goldsmith, has pointed to the additional discounts in the sentence available for convicted offenders under Section 73 of the Serious Organised Crime and Police Act 2005, which was predated by more informal arrangements. It is our view that in a suitable case the parties to a DPA and the court could consider whether this further discount might be available. The level of any such additional discount would depend on the circumstances and of course reflect the level of assistance given; and the parties should be guided by sentencing practice and pre-existing case law on this matter.

In the light of these assurances and the correspondence that has taken place, and, of course, the related assurances that I have given, I trust that the noble and learned Lord, Lord Goldsmith, will withdraw his amendment.

[Lord Goldsmith]

My Lords, I thank the noble Lord, Lord Beecham, for what he said and for reminding us and the Government that we are going to come back to review these arrangements, we very much hope, for a number of reasons, including this one. My primary concern was to get an assurance that one-third was not the maximum discount that could be agreed. In the light of that assurance, I beg leave to withdraw the amendment.

Amendment 11 withdrawn.