New unlimited fines for summary convictions

Change is looming in the Magistrates’ Court in the form of increased powers to levy unlimited fines for summary convictions for any offences where fines are currently capped at £5,000 or more. These changes could have serious implications for many businesses as the Magistrates’ Courts will now have powers to punish corporate defendants (and individuals) for regulatory breaches with unlimited financial penalties.

Previously, cases involving minor breaches would be dealt with in the Magistrates Court with capped fines. Defendants will now have no certainty as to the amount of fines arising from even modest regulatory breaches.  

What will the increased powers be?

The changes to the Magistrates’ Court’s powers can be summarised as follows:

  • Any fine currently capped at £5,000 or more will now be punishable by a fine of an unlimited amount
  • Fines on the “standard scale” (Level 1 – 5; currently capped at £200 - £5,000) will be subject to appropriate increases at the discretion of the Secretary of State.

These changes are not yet in force and none will have a retrospective effect, so they won’t not be applicable to offences committed prior to when the provisions come into force.

How will this affect me and/or my business?

If the changes come into effect there will be notable increases in the amount of fines payable on conviction for any health and safety, environmental and licensing offences which are currently capped at a statutory maximum.  Many such offences are already subject to higher fine levels than the usual maximum of £5,000.  It is worth noting that in its own impact assessment the government identified that nearly two thirds of all fines over £5,000 are issued to organisations, meaning that the new rules will have a disproportionate impact on businesses.

There are also likely to be an increased number of cases dealt with by the Magistrates’ Courts. Currently, the Magistrates’ Courts commit cases considered too serious for their limited sentencing powers to the Crown Court. Clearly the intention behind this change is to limit the number of cases where this step is required.

Although for corporate defendants the removal of the certainty of a maximum fine may mean that more businesses decide to either defend cases that would previously have been the subject of a guilty plea on a commercial basis, or, in the case of offences which can be tried in the Magistrates Court or the Crown Court,  opt for a Crown Court trial where conviction rates are generally lower.

The government’s intention to target greater fines at “wealthy or corporate offenders and organisations” cannot be underestimated. Recent case law from the Crown Court in relation to fines for health and safety and environmental offences has already made clear that fines for large organisations are likely to be measured in several hundreds of thousands of pounds, if not more, for serious incidents.

How can Crisis Response help?

As with all regulatory matters, proactive prevention is the best way to avoid investigations and prosecutions and to benefit from the statutory defences available if you are unfortunate enough to be prosecuted.

Managing the investigation in the wake of an incident is crucial to ensuring that the best results are achieved. It will allow for a strong defence to be built in anticipation of any action by the regulator and help to minimise the scope of any subsequent prosecution.  By taking control of a crisis at an early stage through the collation of physical and witness evidence, protection of privileged documentation and full briefing on any legal implications the organisation can identify and manage these risks. 

Prior to the increased powers coming into force, we recommend that you reconsider your policies and practices to ensure that your business is fully compliant with all relevant regulatory requirements. This review should include regulations which currently attract lower and/or capped fines and therefore have perhaps been considered of less concern prior to the changes taking place. 

Author: Siân Musker

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.