Who: UK Government
Where: England and Wales
When: 10 June 2014
Law stated as at: 3 July 2014
What happened:
The government published two draft statutory instruments:
• The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Standard Scale of Fines for Summary Offences) Order 2014 (the “Order”); and
• The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Disapplication of Section 85(1), Fines Expressed as Proportions and Consequential Amendments) Regulations 2014 (the “Regulations”).
The Order will be made under s87(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”), which will amend s37(2) of the Criminal Justice Act 1982 to increase by 400% the maximum fines on levels 1 to 4 on the standard scale. The Regulations will disapply section 85(1) of LASPO in relation to customs offences and specify the level of fines for such offences instead. The Regulations also make amendments consequential on sections 85(1) and (2) of LASPO, stating how penalties that are expressed as proportions of amounts of £5,000 or more will be treated under the new regime.
Why this matters:
Both statutory instruments are the first stage of the implementation of sections 85 and 86 LASPO, although it is as yet uncertain when they will come into force. LASPO received Royal Assent on 1 May 2012 and once fully in force; it will affect any primary and secondary legislation that give magistrates the power to impose a fine for an offence.
The implementation of sections 85 and 86 of LASPO will increase the maximum fines that can be handed down in a magistrate’s court; in some cases the level of fine will be uncapped. Section 85 once implemented will change a fine “not exceeding the statutory maximum or the prescribed sum” or a fine “not exceeding [an amount higher than £5,000],” or a fine “not exceeding level 5 on the standard scale” to an unlimited fine, or a fine with a new cap if the government introduces this via secondary legislation.
What this will mean in the commercial context
The government’s reasoning for the changes to the limits on magistrates’ fines is to encourage greater use of fines in magistrates’ courts, enabling magistrates to impose more proportionate fines on wealthy or corporate offenders and organisations.
Therefore, commercial organisations should take note of these changes, as once in force, businesses that are found to have committed an offence under any legislation that permits magistrates to hand down a fine, will face vastly increased penalties. This includes fines for offences against advertising related legislation.
Companies may have to change their risk assessment procedure in relation to these offences, as the potential fines they could face for a breach of legislation will no longer be insignificant. The legislation affected by these changes will include the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008, the Business Protection from Misleading Marketing Regulations 2008, the Consumer Protection from Unfair Trading Regulations 2008, the Consumer Protection Act 1987 and the Privacy and Electronic Communications Regulations 2003, to name just a few.
