Why the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is relevant to your business
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Act) will increase the powers of Magistrates’ Courts to impose fines for certain criminal offences in England and Wales. Fines payable in respect of so called “summary” (Magistrates’ Court) or “either way” (Magistrates’ or Crown Court) offences that are currently capped at £5,000 (or at a higher amount) will become fines of an unlimited amount, whilst fines below £5,000 (whether expressed as a fixed fine or by reference to a standard scale) will continue to be capped but the cap may increase.
When the new provisions are brought into force, they are expected to have a significant impact on businesses, with management being forced to reconsider their approach to offences which, given the low fines involved to date, may previously have been treated as relatively minor. The new provisions will have a wide-ranging application across the board but including regulatory matters such as health and safety and environmental. The new provisions will also impact on legislation such as the Companies Act 2006, the Data Protection Act 1998, the Bribery Act 2010 and the Financial Services and Markets Act 2000 which all include criminal offences punishable in the Magistrates’ Court on a summary conviction. All these are relevant for businesses including individuals (such as directors or employees) and “legal persons” (such as companies and LLPs). The new provisions will not have retrospective effect and fines imposed directly by regulators such as the Financial Services Authority will not be affected by the changes.
The main reasons for implementing the changes are said to be to ensure that fines imposed by the Magistrates’ Courts have a real economic impact and to encourage greater regulatory compliance by companies. The changes also serve the government’s aim of reducing costs in the court service: magistrates would no longer be forced to refer the more serious offences to the Crown Court for sentencing as the Magistrates’ Court will itself have sufficient sentencing powers. Further, there is a risk that proportionately higher fines will be imposed on those offenders who work in the corporate and finance sectors and are considered to have “deep pockets”. It is therefore more important than ever that companies and their directors, shareholders and employees ensure that practices, policies and procedures comply with legislation. Even minor breaches may result in unlimited fines.