Crime and Courts Bill [HL]

Lord Phillips of Sudbury Excerpts

Tuesday 13th November 2012 Lords Chamber

[Lord Marks of Henley-on-Thames]

My Lords, I shall speak also to Amendments 35, 45, 46 and 47. These amendments would broadly remove the restriction of deferred prosecution agreements—DPAs—to corporate bodies, partnerships and unincorporated associations by permitting DPAs to be entered into with individuals and would instead restrict DPAs to cases where a sentence of imprisonment would not be likely on a guilty plea. The later amendments in my name, along with the amendment in the name of the noble and learned Lord, Lord Goldsmith, would widen the offences for which DPAs might in future be permitted beyond the range of financial or economic crimes.

To put these amendments in context, I welcome the innovation represented by the introduction of DPAs into this country by this Bill for two principal reasons. First, they are an effective device to ensure that criminal behaviour—sometimes very complex criminal behaviour—is met by a sanction. The compulsory imposition of a financial penalty, which is the subject of an amendment in my name in the next group, would ensure that that was the case. They bring about a saving of trials which in this country are, and have been, notoriously uncertain of outcome, as well as extremely expensive, so that they have used up a very large part of the criminal justice system’s overall budget. Secondly, they offer an opportunity for prosecutors to agree a programme of compliance requirements with offenders, and thus offer a chance to change behaviour, so they are part of the toolkit of the rehabilitation revolution, about which we have heard so much in the context of the Bill.

DPAs are for use only in suitable cases. It is important to avoid the worst excesses of such arrangements in the United States where it has been said that they have been used as the rich man’s route to plea bargaining. I suggest that they can and should be used to achieve voluntary compliance in the future with the requirements of the law across a range of fields. The limit on that is that it should not be acceptable for DPAs to be agreed where otherwise a sentence of imprisonment would be appropriate.

It follows that Amendment 23 removes the requirement that a DPA may not be agreed with an individual. In support of that amendment, I ask rhetorically the question, why the distinction? Why should it be that a criminal offence by a corporation, a partnership or an unincorporated association should be treatable by a DPA, but not an offence by an individual? As I suggested in the Second Reading debate we had in Committee, the question is not whether an offender is an organisation or an individual but whether the nature of the offence is suitable for a DPA. The distinction has been drawn that an individual can be imprisoned and an organisation cannot. But I suggest that that distinction is artificial because it is of course possible to provide that DPAs will be entered into only in cases where imprisonment would be unlikely in the case of an individual.

At Second Reading, my noble friend Lord Phillips of Sudbury suggested to me that nothing in the Bill explicitly stated that DPAs were not appropriate for an offence warranting imprisonment. The answer is that in the Bill as it stands such a provision would be unnecessary because it applies only to corporations, partnerships and unincorporated associations. But if it were extended to individuals, I suggest that it would be necessary to make it clear that it was not to be seen as an alternative to imprisonment.

I quite take the point made by the noble and learned Lord, Lord Goldsmith, at Second Reading, that, because of the behaviour-changing arrangements that can be made in DPAs, they might in some circumstances be suitable for drugs offences and the like which would otherwise warrant a sentence of imprisonment. At this stage at any rate, with this very new procedure, I would be wary of introducing a system that could be seen as allowing offenders effectively to buy their way out of a sentence of imprisonment.

Hence, under Amendment 35, we confine DPAs to offences not warranting such a sentence even if the limit to individuals were to be lifted. That would happen at the preliminary hearing where, on the application by a prosecutor for a declaration that a DPA might be appropriate, that would not be able to be granted were a sentence for imprisonment to be appropriate.

Amendments 45, 46 and 47 in my name and Amendment 44 in the name of the noble and learned Lord, Lord Goldsmith, concern the types of offences that might be made the subject of DPAs. The noble and learned Lord’s amendment would effectively allow the addition of any offence by removing the restriction to economic and financial crime. I should make it clear that my amendments are sample amendments only. They are not intended at all to be exhaustive and I have not attempted to conduct a trawl through the statute book to look for appropriate offences. They are intended to be probing and to give examples only of the way in which categories of offences might be usefully made broader.

Amendment 45 suggests that,

“a breach of regulations which is not punishable by imprisonment”,

taken at its broadest, might be an appropriate amendment. Amendment 46 deals with environmental offences under the Protection of the Environment Act. Some of those are punishable by imprisonment as well as by fines but, were the restriction to be only to those offences which would not be likely to warrant a sentence of imprisonment, that would be appropriate.

Similarly, health and safety offences seem to me—as indeed they seemed to be to the noble and learned Lord, Lord Goldsmith, at Second Reading—to be an appropriate area for such broadening of the offences. I have some experience from practice of the way in which the Environment Agency operates in respect of cases of environmental pollution. In fact, it has been operating for some time on the basis that it will agree not to prosecute offenders in circumstances where the offenders agree to pay compensation to clean up pollution and to put in place with the Environment Agency programmes of compliance with legal requirements for the future. That system works well and I suggest that it could be extended on a formal basis, as is suggested in the schedule, far more widely.

I ask noble Lords to support these amendments, and for the Minister to consider taking them back and doing something with them.

[Lord Phillips of Sudbury]

I am not getting at my noble friend because he referred to my intervention last time, but I hope that he will forgive me if I am misunderstanding this. Perhaps other noble Lords are also unsure as to the impact of the removal of the words, in paragraph 4 on page 261, line 32,

“but may not be an individual”.

Does that not mean that the only persons who may enter into a DPA with a prosecutor are the ones mentioned, namely,

“a body corporate, a partnership or an unincorporated association”,

so the removal of the words in his amendment will not actually make any change?

I see that my noble friend has tabled Amendment 24, which does refer to individuals. However, I wonder whether that is not, so to speak, negatived by the removal of those words; but, as I said, I may well have got this wrong.

[Lord Marks of Henley-on-Thames]

My Lords, my noble friend is, as always, entirely on the ball. My amendment is wrong in exactly the way that he mentioned. It should be “or an individual” rather than,

“but may not be an individual”.

So the words that ought to go are, “but may not be”, to be replaced by the word, “or”. For that, I apologise, and I hope that I will be allowed to alter my amendment accordingly. I am not proposing to press it in any event, but we can bring it back on Report if necessary, in a better form.

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[Lord Phillips of Sudbury]

I am most grateful to the noble and learned Lord for giving way. Does he not have a residual concern that if one allows individuals into this plea-bargaining regime it could give rise to the sort of scandal that my noble friend Lord Marks referred to of rich, powerful and well lawyered individuals escaping the opprobrium of prosecution and appearance in court that might otherwise be the way forward?

[Lord Goldsmith]

I am not concerned about that for this reason. There are two very powerful safeguards in the Bill that should prevent that. First, the DPA has to be agreed by a prosecutor and, as the debate on the previous amendment demonstrated, not just any old prosecutor but either the Director of Public Prosecutions or the director of the Serious Fraud Office—or, possibly, a person designated by the Secretary of State. I leave aside the locum tenens that might come in; the Minister will tell us at some point how likely that will be. First, the prosecutor has to decide whether it is appropriate. Having spent, as the Committee will know, a lot of time with prosecutors when I was in office, I had a high regard for their understanding of what the public interest and public reaction is. They know when people need to go to prison, if they are convicted, and they know when it is appropriate for them not to do so. We can rely a great deal on them to decide which cases are appropriate and which are not.

There is then a second safeguard. Under the Bill as it stands, it has to go to court twice, and the court has to be satisfied that it is appropriate and proportionate for such a step to be taken. Those safeguards mean that one can be much more relaxed about the risks to which the noble Lord, Lord Phillips of Sudbury, refers. Of course, I would entirely agree with him that if we had a situation in which the system operated only to the benefit of the rich it would be wholly unsatisfactory. That is one reason why I think that extending the ability of DPAs so that they cover the sort of offence that I have referred to and individuals would meet part of that concern. If anything, I am worried that by limiting this to economic crimes for companies and partnerships one sends the very message that the noble Lord, Lord Phillips of Sudbury, does not want to be sent. I invite the Government to think very hard about that.

Those are the two safeguards. My personal preference would be not to add any other barriers. I would not add the barrier of the offence being likely to carry a sentence of imprisonment. As the noble Lord, Lord Marks, recognised, if this was extended to cover the sort of case with which I have been concerned it would rule those cases out. I would leave it to the good sense, judgment and sense of public interest of the prosecutor and the court to limit the cases. For the same reason, I would leave the ambit of cases that could be covered open. I would not try to cherry pick through the statute book to find other offences that might be appropriate. I would leave that to the prosecutor and then to the court to say whether it was appropriate to use it for this sort of environmental offence or that sort of health and safety offence. I predict that fairly soon we will have a code giving guidance, and no doubt there will be debates in this House and in other places from time to time as well, and we will see the sort of offences that are appropriate. It is a very useful tool. Other dispositions are not normally limited in this way to particular offences, individuals or specified periods in prison. When I move my amendment, I will invite the Government to consider those points very carefully.

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[Lord Beecham]

I am talking about public perception, which might well be less grounded in those more fundamental objectives than we might give it credit for when debating it in this environment, dominated as it is—looking around the Chamber—by lawyers. We have to carry the public with us. The noble Earl, Lord Attlee, is aghast: unfortunately for the legal profession, perhaps, the lawyer gene apparently did not pass from his grandfather. We have to take public perception on board and it is in that sense that I use the term.

[Lord Phillips of Sudbury]

My Lords, forgive me for speaking after the noble Lord, Lord Beecham, but I hope to add a few words to what he said because I was slow on the uptake and did not realise that the last amendment on this schedule is in this group. I endorse 100% the argumentation of the noble Lord, Lord Beecham, for the five-year review. I think I am alone in this House in being fiercely opposed to the whole schedule on principle. I understand the extremely persuasive arguments advanced by all who have spoken tonight—shortly to be enlarged upon by my noble friend Lord McNally—but I am profoundly concerned that we are stepping into a realm that we have no past experience of and which could work out to be far from the hopes of the Government in advancing this proposed plea-bargaining regime.

There are a number of unknowns here that could, in the event, show that, overall, Schedule 17 works against the public interest. There should be a pause after five years so that that can be looked at very clinically, impartially and clearly so that we can take stock of what is a revolutionary change in our criminal law. Let us make no bones about it: this is one of the greatest revolutions in our criminal law system in 100 years. It is not a change that has been signalled well to the public. There has been extraordinarily little comment in any of the broadsheets, magazines or television programmes. In fact, I have not seen reference to this innovation anywhere. For those reasons and many others, I hope that my noble friend the Minister will accede to the amendment. After all, if the Government are right in their arguments for Schedule 17, they have nothing to fear in a five-year review.

[Lord Ahmad of Wimbledon]

My Lords, I welcome the broad support for the introduction of DPAs. I align myself with the words of the noble and learned Lord, Lord Goldsmith, about my honourable friend Edward Garnier in terms of the work he has done in this field.

My noble friend Lord McNally and I have listened very carefully to the arguments and discussions that have taken place on the amendments in front of us. I can assure your Lordships’ House that this Government are about listening and hearing about experiences. While the proposals are quite specific at the moment, this does not rule out returning in future to the extension of the remit of DPAs, particularly where issues beyond economic crime are concerned.

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[Lord Goldsmith]

More than once in this debate it has been said that this is an entirely novel approach. I invite the noble Lord to consider the fact that we already have deferred sentences, under which judges say, “If you do certain things”—and they are supposed to say what they are—“over the next three or six months, I will take a different course”. We have suspended sentences. I have already referred to the fact that we have conditional cautions. I challenge the proposition that the Government’s proposal is so novel, and invite the noble Lord and his office to consider that.

[Lord Phillips of Sudbury]

That applies in a case that has been tried in open court and a conviction has been made. It is vastly different from the plea-bargain situation where there is no open-court hearing, no obloquy and no public shame.

[Lord Ahmad of Wimbledon]

I thank my noble friend for his intervention. As I said in my opening comments, it is not something that the Government are entirely ruling out, but it is the Government’s view at this stage that because this is something new to our justice system, the provision would be focused on organisations. However, I hear very clearly and my ears have not been closed to the points made by the noble and learned Lord. It is a matter that we will examine at some future point in time when this particular DPA scheme is reviewed, as I am sure it will be.

Generally speaking, the law on corporate criminal liability is such that, in order to achieve a conviction, a prosecutor must show that the “directing mind and will” of the organisation satisfies the necessary fault element for the offence. This is often difficult to show, especially in increasingly large, globalised and more sophisticated organisations. Cases can often involve lengthy and protracted investigation, with associated high financial and resourcing costs, with no guarantee of success.

Our proposals will not change the law on corporate criminal liability. However, they will offer an additional route for holding to account organisations that are willing to engage in the process and might otherwise face prosecution. These issues are not present to the same extent in relation to prosecuting individuals. However, I have noted with great interest what the noble and learned Lord, Lord Goldsmith, has said about his personal experience and the experience of the United States in this regard.

Furthermore, one of the elements that the Government considered as regards prosecuting economic crime committed by organisations is perhaps not the same as that which applies to other areas such as health and safety. Therefore, an extension of the proposals to other forms of offending does not appear necessary at this time. In particular, we are not persuaded that a DPA would be the appropriate response where direct physical harm has been caused to an individual by the organisation’s wrongdoing.

As this process is new to our criminal justice system, the Government would like to tread carefully. Our view is that a narrow, targeted approach is the best course of action to begin with. As I have already assured the House, I shall keep the points raised by my noble friend and the noble and learned Lord, Lord Goldsmith, under review. At a future time, should a case be made for applying deferred prosecution agreements to individuals, or for applying them to a broader range of offences, as the noble Lord, Lord Marks, has mentioned, it is right that we come back to Parliament with the necessary primary legislation to extend the scope of the scheme rather than seeking to do it through secondary legislation.

The noble Lord, Lord Beecham, spoke to Amendment 48. The Government’s view is that that amendment is unnecessary. We have already provided an undertaking that we will review the operation of the scheme following its introduction, which is of course essential given the novelty of DPAs in our criminal justice system. Returning to a point that was raised by my noble friend, the Government are in any event committed to reviewing all new primary legislation within five years of Royal Assent. That was the previous Government’s policy on post-legislative scrutiny. We do not need to put such a review on a statutory footing or to sunset the scheme provided for in the Bill. If, following the review, changes to the scheme are necessary or desirable, we can of course bring forward further primary legislation at that stage.

The noble Lord, Lord McNally, and I have listened very closely to the compelling arguments that have been made. With the assurances that have been given to ensure that the matter is reviewed, I would be grateful if my noble friend Lord Marks and the noble Lord, Lord Beecham, would agree to withdraw the amendment.