THE LAW REFORM COMMISSION

AN COIMISIÚN UM ATHCHÓIRIÚ AN DLÍ

REPORT

ON

THE INDEXATION OF FINES:

A REVIEW OF DEVELOPMENTS

(LRC 65 – 2002)

IRELAND

The Law Reform Commission

I.P.C. House, 35-39 Shelbourne Road, Ballsbridge, Dublin 4

© Copyright The Law Reform Commission 2002

First Published July 2002

ISSN 1393 – 3132

An Taoiseach Bertie Ahern, TD

Office of the Taoiseach

Government Buildings

Dublin 2

1 July 2002

Dear Taoiseach,

I enclose a copy of the Commission's Report on The Indexation of Fines: A Review of Developments, which will be published in the near future.

Yours sincerely,

Declan Budd

President

THE LAW REFORM COMMISSION

Background

The Law Reform Commission is an independent statutory body whose main aim is to keep the law under review and to make practical proposals for its reform. It was established on 20th October, 1975, pursuant to section 3 of the Law Reform Commission Act, 1975.

The Commission's Second Programme for Law Reform, prepared in consultation with the Attorney General, was approved by the Government and copies were laid before both Houses of the Oireachtas in December 2000. The Commission also works on matters which are referred to it on occasion by the Attorney General under the terms of the Act.

To date the Commission has published sixty-three Reports containing proposals for reform of the law; eleven Working Papers; nineteen Consultation Papers; a number of specialised Papers for limited circulation; An Examination of the law of Bail; and twenty-two Reports in accordance with Section 6 of the 1975 Act. A full list of its publications is contained in an Appendix to this Report.

Membership

The Law Reform Commission consists of a President, one full-time Commissioner and three part-time Commissioners. The Commissioners at present are:

President The Hon Mr Justice Declan Budd, High Court

Full-time Commissioner Patricia T Rickard-Clarke, Solicitor

Part-time Commissioners Dr Hilary A Delany, Barrister-at-Law Senior Lecturer in Law, Trinity College Dublin

Professor Finbarr McAuley

Jean Monnet Professor of European Criminal Justice, University College Dublin

Marian Shanley, Solicitor

Secretary John Quirke

Research Staff

Director of Research Professor David Gwynn Morgan LLM (Lond), PhD (NUI)

Legal Researchers Dara Dowling BCL, LLM (University of Paris II)

Jane McCullough BCL, EMA (Padua)

Mairéad O'Dwyer MB, BCh, BAO, BCL

Brónagh Maher BCL

Simon Kieron Barr LLB (Hons), BSc

Claire Morrissey BCL (Int'l), LLM (K U Leuven)

Claire Hamilton LLB (Ling Franc), Barrister-at-Law

Patricia Brazil LLB

Administration Staff

Project Manager Pearse Rayel

Legal Information Manager Marina Greer BA, H Dip LIS

Cataloguer Eithne Boland BA (Hons), H Dip Ed, H Dip LIS

Higher Clerical Officer Denis McKenna

Private Secretary to the President Liam Dargan

Clerical Officers Teresa Hickey

Gerry Shiel

Sharon Kineen

Consultant Researcher on this Report

Douglas Clarke LLB, BCL (Oxon), LLM (Harvard), Barrister-at-Law

Contact Details

Further information can be obtained from:

The Secretary

The Law Reform Commission

IPC House

35-39 Shelbourne Road

Ballsbridge

Dublin 4

Telephone (01) 637 7600

Fax No (01) 637 7601

Email info@lawreform.ie

Website www.lawreform.ie

The Commission would like to thank Mr James Hamilton, Director of Public Prosecutions, Mr Shane Murphy, Senior Counsel, Mr Justin Dillon, Barrister-at-Law, Mr David Barniville, Barrister-at-Law, and Mr Thomas O'Malley, Barrister-at-Law, who offered advice and assistance in relation to this Report. Full responsibility for this Report, however, lies with the Commission.

INTRODUCTION

A. Background to the Report

1.

In 1991, the Law Reform Commission published a Report on the Indexation of Fines¹ (“the 1991 Report”), wherein it concluded that there was a pressing need for action to combat the erosion by inflation of the value of criminal fine maxima.² The Commission articulated three core objectives of any reforming legislation in this area. First, it should ensure the imposition of equal fines for offences of equal gravity. Secondly, it should take account of the past and future effect of inflation on the real value of fines. Thirdly, it should be flexible enough to adjust for the differing means of those upon whom fines are imposed.

2.

Having surveyed the laws of several jurisdictions,³ the Commission proposed and analysed two possible reform options. The first option was to adopt by legislation a standard fine system, whereby fine values would be maintained by reference to a price index. In explaining the nature of a standard fine system involving the use of categories, the Commission stated:

3.

The second option was to adopt by legislation a variable fine system,⁵ whereby fines would be calculable in a particular case by reference to the gravity of the offence and the means of the offender. In explaining the nature of a variable fine system, the Commission stated:

4.

The Commission concluded its analysis of variable fines in Chapter Four of the 1991 Report as follows:

5.

Ultimately, for reasons of practicality, clarity and doubts as to the constitutional validity of a variable fine scheme, the Commission recommended the adoption of a standard fine scheme. The Commission summarised its recommendation thus:

6.

Accordingly, the Commission recommended the adoption of a category system involving the selection of three to five categories which would extend retrospectively to embrace equivalent bands of fine values for earlier periods.⁹ The Commission explained its recommendation thus:

B. Overview of the Report

7.

As noted above, the Commission recommended in its 1991 Report that priority should be given to the immediate introduction of a standard fine system involving the use of categories. That recommendation was underpinned by significant policy considerations with constitutional force. Legislation giving effect to the recommendation has not yet been passed. The Commission also reserved for future consideration (and, in particular, in the light of the British experience) the question of whether a variable fine system

should be introduced. Against this background, the Commission decided that it was appropriate to review developments in relation to the indexation of fines since the publication of the 1991 Report. The objectives of this review were to:

C. Outline of the Report

8.

Chapter One of this Report highlights significant developments in Ireland in relation to the indexation of fines since 1991. Chapter Two highlights significant developments in this area in other jurisdictions. Specifically, the laws of the following jurisdictions have been surveyed and the relevant provisions thereof will be outlined: the United Kingdom, the Commonwealth of Australia, the Australian Capital Territory, New South Wales, the Northern Territory of Australia, Queensland, South Australia, Tasmania, Victoria, Western Australia, New Zealand, Canada, Hong Kong and the United States of America. Chapter Three presents the conclusions and recommendations of the Commission.

CHAPTER ONE: A REVIEW OF DEVELOPMENTS IN IRELAND SINCE 1991

A. Introduction

1.01

The recommendations of the Law Reform Commission in its 1991 Report have yet to be implemented by legislation. There have, however, been some piecemeal legislative developments which should be noted. In this regard, the legislative provisions which establish an indexation scheme for “on-the-spot” litter fines will be outlined. Although levies are beyond the scope of this Report, the legislative provisions concerning environmental levies and landfill levies will also be outlined since they too provide for indexation schemes and are, therefore, relevant to an assessment of the central issues addressed in this Report. This Chapter will also highlight legislative and judicial developments regarding the assessment of fines.

B. Developments Since 1991

(a) Litter Pollution Fines

1.02

Section 28(1)(b) of the Litter Pollution Act, 1997, as amended by the Litter Pollution Regulations, 1999,¹¹ empowers a litter warden or member of the Garda Síochána who has reasonable grounds for believing that a person is committing or has committed a prescribed offence under the Act to give the person a notice stating, inter alia, that he is alleged to have committed the offence in question and that he can within a specified time period¹² make a payment of £50,¹³

accompanied by the notice, to the local authority specified therein. Such a notice must also state that a prosecution in respect of the alleged offence will not be instituted during the period specified in the notice and that, if the payment specified in the notice is made during that period, no prosecution in respect of the alleged offence will be instituted.¹⁴

1.03

Section 14(3) of the Waste Management (Amendment) Act, 2001 amended section 28(1)(b) of the Litter Pollution Act, 1997, with effect from 1 January 2002, by the substitution of “€125” for “£50”. In addition, section 14(4) of the 2001 Act empowers the Minister for the Environment, having regard to certain specified factors, to make an order amending section 28(1)(b) of the Litter Pollution Act, 1997 by substituting for the amount specified therein for the time being an amount that is greater than that amount. The specified factors are:

1.04

Pursuant to section 14(5) of the 2001 Act, the Minister is empowered to amend or revoke an order under section 14(4) of that Act. Section 14(6) of the 2001 Act provides that the power under section 14(4) and (5) shall not be exercised in such a manner as will result in the amount standing specified in section 28(1)(b) of the Litter Pollution Act, 1997 on any date in any relevant period¹⁶ being greater by 25 per cent than the amount that stood so specified on any other date in that period.

(b) The Environmental Levy

1.05

The power to impose a levy in respect of, inter alia, the supply to customers of plastic bags is conferred by section 72 of the Waste Management Act, 1996, as inserted by section 9 of the Waste Management (Amendment) Act, 2001. Pursuant to section 72(2), the Minister for the Environment can, with the consent of the Government, make regulations providing that an “environmental levy” shall be chargeable, leviable and payable in respect of the supply to customers of plastic bags, at the point of sale to them of the goods or products to be placed in the bags or otherwise, in or at a specified class or classes of supermarket, service station or other sales outlet.¹⁷ Pursuant to section 72(3), the Minister is required to specify

the amount of the levy in such regulations but the levy cannot exceed 19 cent for each plastic bag supplied to a customer.¹⁸ Section 72(7) empowers the Minister to make an order once, and once only, in each financial year¹⁹ amending section 72(3) by substituting for the amount standing specified in that subsection for the time being an amount equal to the amount obtained by multiplying 19 cent by the figure specified in section 72(8).²⁰ The latter figure is the quotient, rounded up to 3 decimal places, obtained by dividing the consumer price index number²¹ relevant to the financial year in which the order concerned is made by the consumer price index number relevant to the 2001 financial year.²²

1.06

Section 72(12) of the Waste Management Act, 1996, as inserted by section 9 of the Waste Management (Amendment) Act, 2001, empowers the Minister to make a provisional order²³ extending the application of section 72 to such other types of article as he or she considers appropriate by:

(c) The Landfill Levy

1.07

The power to impose a landfill levy is conferred by section 73 of the Waste Management Act, 1996, as inserted by section 11 of the Waste Management (Amendment) Act, 2001. Pursuant to section 73(1), the Minister can, after consultation with any Minister of the Government concerned, make regulations providing that there shall be chargeable, leviable and payable a “landfill levy” in respect of certain waste disposal activities therein specified.²⁵ Pursuant to

section 73(3), the Minister is required to specify the amount of the levy in such regulations but the levy cannot exceed €19 for each tonne of waste disposed of.²⁶ Section 73(8) empowers the Minister to make an order once, and once only, in each financial year,²⁷ amending section 73(3) by substituting for the amount standing specified in that subsection for the time being a greater amount, not being an amount that is greater than that amount by €5.

(d) Determining the Amount of a Fine

1.08

Order 23, Rule 4 of the District Court Rules, 1997²⁸ provides that where the District Court imposes a penalty it must, in fixing the amount of the penalty, take into consideration amongst other things the means of the accused so far as they are known to it at the time. This reflects section 43(2) of the Criminal Justice Administration Act, 1914 which provides that “[a] court of summary jurisdiction, in fixing the amount of any fine to be imposed on an offender, shall take into consideration, amongst other things, the means of the offender so far as they appear or are known to the court.”

1.09

Pursuant to section 109 of the Children Act, 2001, a court is required, in determining the amount of a fine to be imposed on a child²⁹ and, also, in determining whether to award costs against a

child and the amount of any such costs, to have regard to, among other considerations, the child's present and future means in so far as they appear or are known to the court. For that purpose, the court can require the child to give evidence as to those means and his or her financial commitments.

1.10

The nature and extent of the duty to have regard to the means of an offender when a court is imposing a fine was considered by the Court of Criminal Appeal in The Director of Public Prosecutions v. Redmond³⁰ in the context of an appeal by the Director of Public Prosecutions for a review of a fine pursuant to section 2 of the Criminal Justice Act, 1993. The respondent had pleaded guilty to 10 charges which related to a failure to make tax returns in respect of a number of specified years.³¹ The trial judge had imposed a fine of £500 in respect of each of the first five charges and £1,000 in respect of each of the next five and, thus, a total fine of £7,500. The Court of Criminal Appeal noted that the appellant had confined his application for review to the proposition that the fines were too small in amount and did not submit that a sentence of imprisonment was appropriate. In this light, it considered that it was “important to state the principle on which fines are assessed” and, citing O'Malley on Sentencing Law and Practice³², stated that “regard must be had to the means of the offender when a fine is being imposed”.³³ The Court continued:

1.11

The Court observed that a fine of £7,500 is neither lenient nor harsh in itself, but only in terms of the circumstances of the person who must pay it:

1.12

The Court noted that there was no evidence on any of these points. It stated that since the appellant's specific contention was that the fines were inadequate, to the point of representing divergence from principle, it was “a grave difficulty for the Appellant's case that there was no evidence whatsoever of the Respondent's means”.³⁷

The Court added that “[h]aving regard to the obligation of the Court imposing a fine to take these means into account, it seems difficult to criticize a particular level of fine without this evidence.”³⁸

1.13

In the circumstances of the case and having regard to the onus of proof on the application, the Court concluded that the matters stated by the trial judge to have been taken into consideration were correctly so considered:

C. Conclusions

1.14

The recommendations of the Commission in its 1991 Report in relation to a standard fine system have not yet been implemented by legislation. However, there have been a number of legislative developments primarily in the field of environmental law which are rooted in the same policy considerations as those underlying the recommendations of the Commission. Any lingering doubts about the force of those policy considerations are quickly removed by reference to the survey of legislative developments in other jurisdictions in Chapter Two of this Report. Most of those jurisdictions have enacted laws aimed at combating the erosion by inflation of criminal fine maxima, thus achieving the central objective that the Commission argued should underpin any reforming legislation in this jurisdiction.

1.15

The enactment of legislative provisions such as those contained in the Litter Pollution Act, 1997 and the Waste Management (Amendment) Act, 2001 is welcome to the extent that it provides a means of updating certain fines and levies in accordance

with, inter alia, the value of money and thus, achieves, at least in part, the central objective of reforming legislation articulated by the Commission in 1991. However, the Commission believes that a systematic approach to the indexation of fines is required and that it is undesirable and unnecessarily complicated to attempt indexation on a piece-meal legislative basis. Rather, the Commission favours the enactment of legislation establishing a standard fines system based on the categories model outlined in its 1991 Report. Such a system would apply to fines for summary offences across the full spectrum of legislation, thus obviating the need to target laws on an individual basis while enhancing accessibility to and the clarity of the relevant provisions of such laws.

1.16

If legislation based on the categories model favoured by the Commission is to be enacted, it will be necessary to make provision for the existing scheme for the indexation of litter fines outlined above. One option would be specifically to exclude the monetary amounts encompassed by that scheme from the general indexation of fines framework. Another option would be to repeal this indexation scheme, thus allowing the monetary amounts covered by it to be updated in accordance with the general indexation of fines framework. For reasons of clarity, consistency and practicality, the Commission favours the latter approach.

CHAPTER TWO: A REVIEW OF DEVELOPMENTS IN OTHER JURISDICTIONS SINCE 1991

A. Introduction

2.01

This Chapter provides an overview of significant developments in other jurisdictions since the publication by the Commission of its 1991 Report.

B. Developments in Other Jurisdictions

(a) United Kingdom

(i) Standard Fine Scale

2.02

As outlined in the 1991 Report, section 37 of the Criminal Justice Act, 1982 introduced a standard scale of fines for summary offences in England and Wales.⁴⁰ The terms of the standard scale were set out as follows by section 37(2):

2.03

Section 37(2) of the Criminal Justice Act, 1982 and section 289G of the Criminal Procedure (Scotland) Act, 1975 (the corresponding statutory provision in Scotland) were substituted by section 17(1) of the Criminal Justice Act, 1991⁴¹ as follows:

2.04

An enactment (whether contained in an Act passed before or after the 1982 Act) which provides that a person convicted of a summary offence shall be liable on conviction to a fine or a maximum fine by reference to a specified level on the standard scale is construed as referring to the standard scale for which section 37 provides, as that standard scale has effect from time to time by virtue of section 37 or an order made under section 143 of the Magistrates' Courts Act, 1980.⁴² An enactment which confers power by subordinate instrument to make a person liable on conviction of a summary offence (whether or not created by the instrument) to a fine

or maximum fine by reference to a specified level on the standard scale is construed likewise.⁴³

2.05

By way of example, section 96(11A) of the Transport Act, 1968,⁴⁴ as amended, provides that “[w]here in the case of a driver of a motor vehicle, there is in Great Britain a contravention of any requirement of the applicable [European] Community rules as to periods of driving, or distance driven, or periods on or off duty, then the offender and any other person (being the offender's employer or a person to whose orders the offender was subject) who caused or permitted the contravention shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.” This section was considered by the House of Lords in Vehicle Inspectorate v. Nuttall.⁴⁵

(ii) Unit Fines System

2.06

As noted above, the Commission stated in its 1991 Report that it was confident of the potential merits of a variable fine system and it suggested “that the question be considered again, after a standard fine system has been introduced, and in the light, in particular, of British experience.”⁴⁶ The British experience in relation to a variable fine system since the publication of the 1991 Report is particularly instructive. Pursuant to sections 18 and 19 of the Criminal Justice Act, 1991 (which came into force on 1 October 1992), England and Wales adopted a unit fines scheme.⁴⁷ However, these sections were repealed in 1993 by section 65 of the Criminal Justice Act, 1993. Having regard to the views expressed by the Commission in its 1991 Report, it is appropriate to outline the provisions of sections 18 and 19 of the Criminal Justice Act, 1991 and to explore the reasons for their demise.

2.07

Section 18 of the Criminal Justice Act, 1991 introduced a unit fines system which applied where a magistrates' court imposed a fine on an individual: (a) for a summary offence which was punishable by a fine not exceeding a level on the standard scale; or (b) for a statutory maximum offence (that is, an offence which was triable either way and which, on summary conviction, was punishable by a fine not exceeding the statutory maximum).⁴⁸ The amount of such a fine was stated to be the product of:

2.08

Section 19 of the 1991 Act required a court, in fixing the amount of a fine,⁵¹ to take into account, inter alia, the means of the offender so far as they appeared or were known to the court, irrespective of whether the effect of so doing was to increase or reduce the amount of the fine.⁵²

2.09

As noted above, the units fines system introduced by sections 18 and 19 of the 1991 Act was abolished by section 65 of the Criminal Justice Act, 1993.⁵³ In this regard, it is appropriate to explore the reasons for the downfall of the units fines system in England and Wales. The Minister of State for the Home Office offered the following explanation on behalf of the British Government:

2.10

Professor Andrew Ashworth highlighted several problems with the unit fines system that had been introduced.⁵⁶ First, “the amount of unit fines under the statutory scheme was far higher than in the experimental schemes”⁵⁷ and it, therefore, “resulted in a scheme with a quite different flavour”.⁵⁸ Secondly, “the scheme emphasised income to the exclusion of capital and other indicia of wealth – an approach aimed at simplicity, but productive of some injustice.”⁵⁹ Thirdly, “the statutory scheme became extremely complex, not merely in the exceptions incorporated in section 18 of the Act but also in the regulations for calculating weekly disposable income.”⁶⁰ Fourthly, “a vocal group of magistrates, particularly some stipendiary magistrates, felt that the scheme was misconceived because it was too rigid and overlooked the problems of determining the income of certain types of offender, such as prostitutes and foreign tourists.”⁶¹ However, Professor Ashworth observed that it was a fifth difficulty that was probably the major factor in the decision to abolish unit fines:

2.11

Professor Ashworth noted that when proposing unit fines, the White Paper included the portentous statement that “it can be difficult to make it clear to the public, and to offenders, that a particular fine is a fair punishment when another equally culpable is given a fine of a different level.”⁶³ He observed that although it was difficult, “at the time when some magistrates, many newspaper editors and many politicians were failing to grasp the point, little effort was made to promote the claims of the principle of equal impact.”⁶⁴

2.12

The difficulties that beset the English unit fines system were also recently considered by the Criminal Justice Policy Group of the New Zealand Ministry of Justice (“the New Zealand Group”).⁶⁵ The New Zealand Group concluded that the abandonment of the unit fines system seemed to result from the widespread media criticism of apparently very high fines being imposed for minor offences: “[p]art

of the difficulty was that the media were reluctant to acknowledge the rationale of equal impact between offenders of different means, and criticised different fines for similar offences committed by rich and poor individuals as though they were grotesque aberrations, rather than the result that the legislation had been intended to achieve.”⁶⁶ Even so, the Group considered that “it was difficult to view the sheer size of the increase in fines for the better-off offenders as good justice in some cases”:

2.13

The New Zealand Group also highlighted “the discrepancy between fixed penalties and the unit fines that could be imposed if the fixed penalty offence was taken to court”:⁶⁸

2.14

The New Zealand Group also noted that “there was perhaps insufficient attention paid to sentencing judges' reluctance to increase fines for richer offenders”:⁷⁰

2.15

The New Zealand Group highlighted the following lessons from the English experience:

2.16

In England and Wales, section 65(1) of the Criminal Justice Act, 1993 substituted the following for the provisions of section 18 of the Criminal Justice Act, 1991:

(b) Commonwealth of Australia

2.17

As noted in the 1991 Report,⁷⁴ the Australian Law Reform Commission recommended the adoption of a penalty unit system for both federal and Australian Capital Territory offences.⁷⁵

2.18

Penalty units were introduced by the Federal Government in section 4AA of the Crimes Act, 1914 (Cth.), as inserted by the Crimes Legislation Amendment Act 1992 (Cth.). Section 4AA provides that in the law of the Commonwealth or a Territory Ordinance, unless the contrary intention appears, a “penalty unit means A$110.”

2.19

By way of example, section 29D of the Crimes Act, 1914 provides that a person who defrauds the Commonwealth or a public authority under the Commonwealth is guilty of an indictable offence and imposes a penalty of 1,000 penalty units and/or 10 years imprisonment in respect thereof. Section 29D was recently considered by the Federal Court of Australia in the case of Joyce v. Grimshaw.⁷⁶

2.20

It should be noted that the Australian Law Reform Commission is presently considering the relationship between criminal, civil and administrative penalties and the principles that should guide the formulation and application of civil and administrative sanctions. The terms of reference direct the Commission to articulate and evaluate principles relevant to federal civil and administrative penalties, including, inter alia, the principles for determining and setting maximum penalties.⁷⁷

(c) Australian Capital Territory

2.21

The law in this area is governed by the Crimes Act, 1900, as amended. This Act does not provide for any system of indexing fines.

2.22

It should be noted, however, that section 431A of the Crimes Act, 1900 provides that before imposing a fine on a person for an offence against a law of the Territory, the court shall take into account the financial circumstances of the person where those circumstances can be ascertained, in addition to any other matters that the court is required or permitted to take into account. Section 429A provides that in determining the sentence to be imposed on a person, the matters to which a court shall have regard include, inter alia, such of the following matters as are relevant and known to the court:

(d) New South Wales

2.23

Part III of the Crimes (Sentencing Procedure) Act, 1999⁷⁸ is concerned with the penalties that may be imposed under the laws of New South Wales. Section 17 provides that unless the contrary intention appears, a reference in any Act or statutory rule to a number of penalty units (whether fractional or whole) is taken to be a reference to an amount of money equal to the amount obtained by multiplying A$110 by that number of penalty units. By way of example, section 27(1) of the Marine Pollution Act, 1987 provides that “[i]f a discharge to which this Part applies occurs, each appropriate person in relation to the discharge and any other person whose act caused the discharge, are each guilty of an offence punishable, upon conviction, by a fine not exceeding: (a) if the offender is a natural person – 2,000 penalty units; or (b) if the offender is a body corporate – 10,000 penalty units.” This section was recently considered by the Supreme Court of New South Wales (Court of Criminal Appeal) in Thorneloe v. Filipowski.⁷⁹ The Court noted that the conversion of those penalty units into monetary sums is A$220,000 for a natural person and A$1,100,000 for a body corporate.

2.24

Section 19 of the 1999 Act provides for the effect of an alteration in penalties⁸⁰ as follows:

2.25

Section 6 of the Fines Act, 1996⁸¹ provides that in the exercise of its discretion to fix the amount of any fine, a court is required to consider:

2.26

In its 1996 Report on Sentencing,⁸² the New South Wales Law Reform Commission noted that a disadvantage of the court-imposed fine is its potentially discriminatory effect on offenders of different financial standing who are required to pay the same amount of money following conviction for offences of similar gravity. It observed that the fine system may operate unfairly in two ways: (a) a fine for a certain amount of money may represent a much more severe punishment for one offender than for another; and (b) the imposition of a further penalty for fine default may be more likely for an offender who does not have the financial means to pay than for an offender who does. The Commission considered two options for reducing the inequities in court-imposed fines, one of which was the adoption of a day fine system. The Commission explained that “[u]nder the day-fine system, the sentencing court determines the amount of the fine to be imposed in an individual case on the basis of a specified number of day-fine units, the amount of each unit being calculated by reference to the offender's daily income.”⁸³ It observed that the object of a day-fine system “is to provide a more effective

means of tailoring the fine to fit the individual offender's income”.⁸⁴ Nevertheless, the introduction of the day fine had only received limited support in the submissions to the Commission:

2.27

The Commission considered that it was a compelling objection to the court-imposed fine if it operated as a harsher penalty for offenders with fewer resources, with the potential for an increase in the incidence of fine default if offenders are obliged to pay fines which are beyond their financial means. In this regard, the Commission highlighted that an advantage of the day fine is that it requires the sentencing court to calculate the fine according to a formula which is directly based on the offender's income. The

Commission noted that other jurisdictions had expressed approval of the day-fine system, at least in theory, because of this advantage.⁸⁶

2.28

Notwithstanding the benefits outlined above, the Commission concluded that a day-fine system should not be introduced in New South Wales for the following reasons:

(e) Northern Territory of Australia

2.29

The law in this area is governed by the Sentencing Act, 1995, as amended, and the Penalties Act, 1999, as amended. Section 3(1) of the Penalties Act provides that a reference to a penalty for an offence⁸⁸ against a provision of an Act expressed as a number of penalty units (whether fractional or whole) is to be read as a reference to an amount of money equal to the amount obtained by multiplying A$100 by the number of penalty units. Section 3(2) provides that in its application to an Act, subsection (1) yields to a contrary intention in the Act. Section 4 provides that if the amount prescribed by section 3 is changed, the new amount applies in calculating the amount of each penalty unit for an offence against a provision of an Act only in respect of an offence committed after the commencement of the provision effecting the change.

2.30

Section 17(1) of the Sentencing Act, 1995 provides that where a court decides to fine an offender, it must, in determining the amount

of the fine and the way in which it is to be paid, take into account as far as practicable: (a) the financial circumstances of the offender;⁸⁹ and (b) the nature of the burden that its payment will impose on the offender. However, a court is not precluded from fining an offender because it has been unable to ascertain these matters.⁹⁰ In fixing the amount of a fine, a court is permitted to have regard to, inter alia: (a) the loss or destruction of or damage to property suffered by a person as a result of the offence; and (b) the value of any benefit derived by the offender as a result of the offence.⁹¹ A court is required to give preference to restitution or compensation where it considers that it would be appropriate to impose a fine and to make a restitution or compensation order but that the offender has insufficient means to pay both.⁹² Nevertheless, a court is not precluded from imposing a fine and making a restitution or compensation order.⁹³

(f) Queensland

2.31

Queensland has adopted a penalty units system. Pursuant to section 5 of the Penalties and Sentences Act, 1992, a reference in any Act to a penalty of a specified number of penalty units is a reference to a fine of that number of penalty units.⁹⁴ Thus, for example, if a statutory provision provides that the maximum penalty is 10 penalty units, the offender is liable to a maximum fine of 10 penalty units.⁹⁵ The value of a penalty unit is:

2.32

If an Act expresses a penalty or other matter as a number (whether whole or fractional) of penalty units, the monetary value of the penalty or other matter is the number of dollars obtained by multiplying the value of a penalty unit by the number of penalty units.⁹⁷ If an order of a court expresses a penalty or other matter as a monetary value, the number of penalty units is to be calculated by dividing the monetary value of a penalty unit by the value of the penalty as at the time the order is made.⁹⁸

2.33

Section 205 of the 1992 Act provides that a reference in an Act or document to the Penalty Units Act, 1985 may, if the context permits, be taken to be a reference to the Penalties and Sentences Act, 1992.

2.34

Section 48(1) of the 1992 Act provides that if a court decides to fine an offender, it must, in determining the amount of the fine and the way in which it is to be paid, take into account as far as practicable: (a) the financial circumstances of the offender;⁹⁹ and (b) the nature of the burden that its payment will impose on the offender. However, a court is not precluded from fining an offender because it has been unable to ascertain these matters.¹⁰⁰ In fixing the amount of a fine, a court is permitted to have regard to, inter alia: (a) the loss or destruction of or damage to property suffered by a person as a result of the offence; and (b) the value of any benefit derived by the offender as a result of the offence.¹⁰¹ A court is required to give

preference to restitution or compensation where it considers that it would be appropriate to impose a fine and to make a restitution or compensation order but that the offender has insufficient means to pay both.¹⁰² Nevertheless, a court is not precluded from imposing a fine and making a restitution or compensation order.¹⁰³

(g) South Australia

2.35

The law in this area is governed by the Criminal Law (Sentencing) Act, 1988. This law does not provide for any system of indexing fines. However, a penalty units system is provided for by section 20(2) of the Corporations (Ancillary Provisions) Act, 2001. Section 20(2) provides, inter alia, that for the purposes of an offence against an applied law, the amount of a penalty unit specified in relation to that offence by the applied law, or a provision taken by force of section 19(1) to apply to the matter that is the subject of the declaratory provision, is A$100.

2.36

Section 33(1) of the 1988 Act provides that on imposing a fine upon a defendant, a court may, by order: (a) specify a period within which the fine must be paid; or (b) direct that the fine be paid in instalments of a specified amount at specified times or at specified intervals. In determining the time within which a fine is to be paid, a court must have regard to the effect of the fine on the welfare of dependants of the defendant and on the defendant's ability to satisfy any order or direction for compensation made, or to be made, by the court under the Act or any other Act.¹⁰⁴ A court is not obliged to inform itself of these matters but it should consider any evidence in relation thereto which has been placed before it by the defendant or the prosecutor.¹⁰⁵

(h) Tasmania

2.37

As noted in the 1991 Report,¹⁰⁶ the Tasmanian Law Reform Commission recommended the adoption of a penalty unit system similar to that implemented in Victoria by the Penalties and Sentences Act, 1981.¹⁰⁷

2.38

A penalty units system was introduced in Tasmania by the Penalty Units and Other Penalties Act, 1987. Section 4 of the Act provides that where, in any Act or subordinate instrument for the time being in force, a number (whether whole or fractional) of “penalty units” is prescribed as the penalty for an offence against that Act or subordinate instrument or is specified for some other purpose in that Act or subordinate instrument, the Act or subordinate instrument shall¹⁰⁸ be construed as setting out a penalty of a number of dollars equal to the product obtained by multiplying A$100 by the number of penalty units so prescribed or so specified. By way of example, section 37(2) of the Workplace Health and Safety Act, 1995 lists the following penalties in respect of conduct that frustrates the work of an inspector or a person assisting an inspector under the Act:¹⁰⁹ (a) in the case of a body corporate, a fine not exceeding 500 penalty units; and (b) in the case of a natural person, a fine not exceeding 200 penalty

units. This section was recently considered by the Supreme Court of Tasmania in the case of Dougherty v. Ling.¹¹⁰

(i) Victoria

2.39

As noted in the 1991 Report,¹¹¹ a penalty unit system was introduced in Victoria by the Penalties and Sentences Act, 1981. The law in this area is presently governed by the Sentencing Act, 1991,¹¹² as amended. Section 109(2) of the 1991 Act, as amended by section 12 of the Sentencing (Amendment) Act, 1997¹¹³ provides that an offence which is described in an Act, subordinate instrument or local law as being an offence of a level specified in column 1 of the following table or as being punishable by a fine of a level specified in that column is, unless the contrary intention appears, punishable by a fine not exceeding that specified opposite it in column 2 of that table.

2.40

Section 110 of the 1991 Act provides that if in an Act, subordinate instrument or local law there is a statement of a number (whether whole or fractional) of what are called “penalty units”, that statement must, unless the context otherwise requires, be construed as stating a number of dollars equal to the product obtained by multiplying A$100 by that number of penalty units. By way of example, there is a fine of 100 penalty units for non-compliance with section 17 of the Accident Compensation (Work Cover Insurance) Act, 1993. Thus, the maximum fine for non-compliance with section 17 is A$10,000. This section was recently considered by the Supreme Court of Victoria in Victorian Workcover Authority v. I. R. Cootes Pty. Ltd.¹¹⁴

2.41

Section 114 of the 1991 Act provides for the effect of an alteration in penalties as follows:

2.42

Section 50(1) of the 1991 Act provides that if a court decides to fine an offender, it must, in determining the amount and method of

payment of the fine, take into account, as far as practicable, the financial circumstances of the offender¹¹⁵ and the nature of the burden that its payment will impose. However, a court is not precluded from fining an offender simply because it has been unable to ascertain the financial circumstances of the offender.¹¹⁶ In fixing the amount of a fine, a court is permitted to have regard to, inter alia: (a) any loss or destruction of, or damage to, property suffered by a person as a result of the offence; and (b) the value of any benefit derived by the offender as a result of the offence.¹¹⁷ A court is required to give preference to restitution or compensation where it considers that it would be appropriate to impose a fine and to make a restitution or compensation order but that the offender has insufficient means to pay both.¹¹⁸ Nevertheless, a court is not precluded from imposing a fine and making a restitution or compensation order.¹¹⁹

(j) Western Australia

2.43

The law in this area is governed by the Fines, Penalties and Infringement Notices Enforcement Act, 1994 and the Sentencing Act, 1995. These laws do not provide for any system of indexing fines. However, it should be noted that a penalty units system has been incorporated into the following statutory schemes: the Road Traffic Act, 1974, as amended, and the Corporations (Ancillary Provisions) Act, 2001.¹²⁰ In respect of the former, section 5(1)(a) provides, inter

alia, for the use of the abbreviation “PU” in describing penalties for offences. In this regard, “PU” stands for penalty units and a reference to a number of PUs is a reference to an amount in dollars, that is, that number multiplied by 50.¹²¹ By way of example, the penalty for driving a motor vehicle while one's driver's licence is cancelled or suspended is a fine of not less than 20 PU or more than A$2,000 and/or imprisonment for a term not exceeding 18 months. Section 5(1)(a) was recently considered by the Supreme Court of Western Australia in Nebro v. Duxbury.¹²²

2.44

Section 53(1) of the Sentencing Act, 1995 provides that, subject to Division 1 of Part 2 of the Act,¹²³ if a court decides to fine an offender, it must, in deciding the amount of the fine, as far as is practicable, take into account the means of the offender and the extent to which payment of the fine will burden the offender. A court can fine an offender even though it has been unable to ascertain these matters.¹²⁴ A court must not fine an offender if satisfied that, after paying compensation to the victim in accordance with a compensation order under Part 16 of the Act, the offender will be unable to pay the fine within a reasonable time.¹²⁵

(k) New Zealand

2.45

The law in this area is governed by the Criminal Justice Act, 1985, as amended. This Act does not provide for any system of indexing fines.

2.46

The imposition of monetary penalties in New Zealand was recently reviewed by the Criminal Justice Policy Group at the

Ministry of Justice.¹²⁶ The Group noted the existence of indexation systems in a number of other jurisdictions and considered the adoption of such systems in New Zealand as follows:¹²⁷

2.47

Section 27(1) of the Criminal Justice Act, 1985 provides that in fixing the amount of any fine to be imposed on an offender, a court must take into consideration, inter alia, the means and responsibilities of the offender so far as they appear or are known to the court. Where a court imposes a fine in addition to a sentence to make reparation, it must, in fixing the amount of the fine, take into consideration the amount payable under that sentence.¹²⁹ The impact of section 27 was considered by the New Zealand Group:

2.48

The New Zealand Group noted that there was minimal guidance as to how and to what extent the offender's means should be taken into account when the court is considering the imposition of a fine. Consequently, the courts are limited in the extent to which the means of the offender affect the amount of the fine. This affects the ability of fines to be fairly adjusted to the individual circumstances of the offender and may discourage the use of fines for those on very low or very high incomes. In this light, the Group considered the question of whether a unit fines system should be adopted. The Group noted that “the unit fine system is a different concept of fining, with the seriousness of an offence to society no longer expressed by the dollar value of the fine but as a period of time when an offender must make a financial sacrifice”:

2.49

The New Zealand Group articulated a number of arguments in favour of the unit fines system. First, it facilitates a just and fair approach to punishment in line with the principle of equal impact on offenders. Secondly, unit fines are consistent with most other sanctions of the court through expressing the penalty as a period of time. Thirdly, unit fines promote uniformity of approach to fines. Fourthly, unit fines remove the necessity to update the level of fine to take account of inflation. Fifthly, unit fines will be used more often than fixed or standard fines because they can be more punitive for the more affluent offenders and, as a result, sanctions involving supervision or incarceration can be used less thereby saving resources.

2.50

The introduction of a unit fines system in New Zealand was considered by the Penal Policy Review Committee in 1981.¹³² In its Report, the Committee commented that a unit fine system such as the

Swedish one required an accurate and independent check of the offender's income which was not available in New Zealand. In light of this fact and, also, the complexity of the Swedish system, the Committee concluded that such a system was unsuitable for New Zealand. Some members of the Committee were strongly opposed to the upward adjustment of fines for wealthier offenders.

2.51

In April 1994, the Government agreed that a pilot scheme of time fines (based on a unit fines system) should proceed for the purpose of assessing the fiscal impact of such a scheme, the implications for efficient case flow management in the courts, and the general acceptability of time fines. The Department of Justice was directed to develop the proposal further following consultation. Having studied the operation of the unit fines scheme in England and Wales, a scheme that avoided its shortcomings was proposed. In particular, the proposed scheme retained flexibility for the courts and avoided the rigid application of a formula that in England and Wales led to such variation among fines for offences of the same gravity depending on the income of the offender. The proposed scheme would have required the court, having reached the decision that a fine was the appropriate sentence, to:

2.52

The proposed scheme was to cover all offences in respect of individuals except:

2.53

It was argued that the scheme had the capacity to increase the use of fines in preference to the more costly community-based sentences and so to assist with the ratcheting down of sentence types and levels, although the fiscal impact was uncertain because of the range of variables involved (sentencing practice, administrative costs of new procedure and payment patterns). For this reason, a trial of the scheme was recommended in order to test these variables. Further work was to be undertaken on minimum and maximum dollar amounts to be applied to the number of weeks, how 'income' would be assessed, and the procedures involved. Legislative amendments (to the Criminal Justice Act and Summary Proceedings Act) were also necessary.

2.54

In November 1994 officials reported to the government that both the Judiciary and the Law Commission had reservations about the proposal for a time fines scheme. Their major concern was that many infringement fees were set at a very high level relative to court-imposed fines and that a time fines scheme would exacerbate those inconsistencies. In August 1995, the Government decided that no further work would be undertaken by officials on the development of a time fine system.

2.55

Against this background, the New Zealand Group outlined the following arguments against the adoption of a day/unit fine system:

2.56

The New Zealand Group concluded that in order to address the above concerns the following issues would need to be resolved prior to the introduction of a unit fines system:

(l) Canada

2.57

The law in this area is governed by Part XXIII of the Criminal Code. This Code does not provide for any system of indexing fines.

2.58

In 1999, the Canadian Institute for the Administration of Justice held a conference entitled, “Changing Punishment at the Turn of the Century: Finding a Common Ground”.¹³⁴ The indexation of fines does not appear to have been addressed at this conference.

2.59

Section 734(2) of the Criminal Code provides that, except when the punishment for an offence includes a minimum fine or a fine imposed in lieu of a forfeiture order, a court may fine an offender only if it is satisfied that the offender is able to pay the fine or

discharge it by way of a work programme (in provinces where such programmes exist).

(m) Hong Kong

2.60

Section 113C(2) of the Criminal Procedure Ordinance¹³⁵ provides that where an Ordinance provides for a fine, other than an excluded fine, for an offence expressed as an amount of money, the fine shall be deemed to be a fine at the level relevant to the amount of the fine in the following table:

2.61

Section 113C(3) provides that where a provision in an Ordinance specifies a fine, other than an excluded fine,¹³⁶ expressed as an amount of money that may be prescribed under subsidiary legislation, the fine shall be deemed to be a fine at the level relevant to the amount of the fine in the above table. The Chief Executive in

Council is empowered to amend by regulation the amounts set out in the table to reflect his opinion of the effect of inflation on the value of the amounts set out in the table since the date that the amounts in the table were last amended.¹³⁷

(n) United States of America

2.62

As noted in the 1991 Report,¹³⁸ section 6.03 of the American Law Institute Model Penal Code¹³⁹ proposes a hybrid category system whereby dollar limits are set for each degree of felony and misdemeanour. Section 6.03 does not appear to have been revised since the publication of the 1991 Report.

C. Conclusions

2.63

It is clear from the above that most of the jurisdictions surveyed have established a legislative framework for updating fine values, thus combating their erosion by inflation. It is also notable that, in many jurisdictions, this was achieved in the context of a codification of sentencing laws generally.

2.64

It is also appropriate to highlight that most of the jurisdictions surveyed have enacted legislative provisions specifying certain matters which, in so far as practicable, a court is required to take into account when determining an appropriate sentence. These include some or all of the following:

2.65

England and Wales adopted a unit fines scheme in 1992¹⁴⁰ but abolished it in 1993 primarily because of the perception that very high fines were being imposed for minor offences. The desirability of unit fines schemes has been considered subsequently in a number of other jurisdictions and the arguments against the adoption of such schemes would appear to have prevailed.¹⁴¹

CHAPTER THREE: CONCLUSIONS AND RECOMMENDATIONS

A. Conclusions

3.01

In its 1991 Report on the Indexation of Fines, the Commission concluded that there was a pressing need for action to combat the erosion by inflation of the value of criminal fine maxima.¹⁴² The Commission articulated three core objectives of any reforming legislation in this area. First, it should ensure the imposition of equal fines for offences of equal gravity. Secondly, it should take account of the past and future effect of inflation on the real value of fines. Thirdly, it should be flexible enough to adjust for the differing means of those upon whom fines are imposed. Having surveyed the laws of several jurisdictions, the Commission recommended, inter alia, that priority should be given to the immediate introduction of a standard category fine system.¹⁴³

3.02

The recommendations in the 1991 Report of the Commission have not yet been implemented by legislation. However, there have been a number of legislative developments primarily in the field of environmental law which are rooted in the same policy considerations as those underlying the recommendations of the Commission. Thus, the enactment of legislative provisions such as those contained in the Litter Pollution Act, 1997 and the Waste Management (Amendment) Act, 2001 is welcome to the extent that it provides a means of updating certain fines and levies in accordance with, inter alia, the value of money and thus achieves, at least in part, the central objective of reforming legislation articulated by the Commission in 1991. However, the Commission believes that a systematic approach to the indexation of fines is required and that it is undesirable and

unnecessarily complicated to attempt indexation on a piece-meal legislative basis. Rather, the Commission favours the enactment of legislation establishing a standard fines system based on the categories model outlined in its 1991 Report. Such a system would apply to fines for summary offences across the full spectrum of legislation, thus obviating the need to target laws on an individual basis while enhancing accessibility to and the clarity of the relevant provisions of such laws.

3.03

If legislation based on the categories model favoured by the Commission is to be enacted, it will be necessary to make provision for the indexation scheme for litter fines established by the legislation referred to above. One option would be specifically to exclude the monetary amounts encompassed by this scheme from the general indexation of fines framework. Another option would be to repeal the indexation scheme, thus allowing the monetary amounts covered by it to be updated in accordance with the general indexation of fines framework. For reasons of clarity, consistency and practicality, the Commission favours the latter approach.

3.04

Legislative developments in other jurisdictions provide a significant added impetus to the recommendations of the Commission. As is clear from the survey of laws in other jurisdictions contained in Chapter 2, most of the jurisdictions have enacted legislative measures aimed at combating the erosion by inflation of criminal fine maxima, thus achieving the central objective that the Commission argued should underpin any reforming legislation in this jurisdiction.¹⁴⁴ In this regard, the codification of sentencing laws undertaken by most Australian states and the concomitant adoption of penalty units schemes is particularly notable.

3.05

It is also appropriate to highlight that most of the jurisdictions surveyed have adopted legislative measures which achieve, at least in part, another of the three objectives which the Commission posited should underpin any reforming legislation, namely, that it should be flexible enough to adjust for the differing means of those upon whom fines are imposed. Most of the sentencing laws in those jurisdictions

specify various matters which, in so far as practicable, a court must take into account when determining the sentence to be imposed in a particular case. They include some or all of the following:

3.06

It should be noted, however, that while it was implicit in the objective concerning the flexibility of any reforming legislation that fines should be adjusted upwards for wealthier offenders, the means-related provisions of the sentencing laws referred to above have generally been interpreted as though the ability to pay a fine is a mitigating factor, with the result that the amount of a fine that might otherwise be imposed on the basis of the gravity of the offence is reduced.¹⁴⁵

3.07

In its 1991 Report, the Commission expressed confidence in the potential merits of a variable fine system and suggested that the question be considered again, after a standard fine system has been introduced, and in the light, in particular, of British experience.¹⁴⁶ As noted above, England and Wales adopted a unit fines scheme in 1992¹⁴⁷ but abolished it in 1993 mainly because of the perception that very high fines were being imposed for minor offences. The desirability of unit fines schemes has been considered subsequently in a number of jurisdictions and the arguments against the adoption of such schemes would appear to have prevailed.¹⁴⁸

3.08

The experience of jurisdictions in which unit fines systems were adopted or considered yields a number of lessons which are relevant not simply to the question of whether such a system should be adopted in this jurisdiction but, also, to the broader question of how legislation aimed at achieving the three core objectives outlined in the 1991 Report¹⁴⁹ should be structured. One of the core lessons in this regard is the need to convey the principle of equality of impact to all involved in the administration of the criminal justice system and to the public generally. Specifically, it is imperative to convey that the imposition of different fines in respect of similar offences in circumstances where the means of the offenders differs is not an aberration, productive of inequality, but, rather, a result that accords entirely with the underlying principle of equal impact upon offenders of different means.¹⁵⁰ As noted above, the failure to appreciate this principle was central to the downfall of the unit fines system in England and Wales. An appreciation of this principle will be essential to the success of any reforming legislation that requires a sentencing judge to have regard to the financial circumstances of an offender, irrespective of whether the effect of so doing would be to increase or to reduce the amount of the fine. In this context, it will also be important to have due regard to the difficulties of obtaining accurate and timely information on the financial circumstances of an offender.¹⁵¹ More generally, a complex and rigid legislative scheme

for the computation of fines must be avoided. By extension, the discretion of sentencing judges must be preserved.

B. Recommendations

3.09

The experience of jurisdictions in which unit fines systems were adopted or considered provides strong reasons for caution in respect of the adoption of such a system in this jurisdiction. The Commission believes that it would be inappropriate to adopt such a system at the present time and that many of the positive features of such a system can be achieved by adopting the recommendations which follow.

3.10

A standard fine system based upon the category model proposed by the Commission in its 1991 Report should be introduced by legislation as a matter of urgency.

3.11

The scheme for the indexation of litter fines should be repealed so that the monetary amounts covered by that scheme can be updated within the general indexation of fines framework established in accordance with the foregoing recommendation.

3.12

The reforming legislation should also provide that when a court is determining the amount of a fine, it should, in so far as is practicable have regard to, among other factors,¹⁵² the financial circumstances of the offender and the nature of the burden that payment of a particular fine will impose upon the offender and his dependents. In this regard, the legislation should also provide that a court should have regard to such matters irrespective of whether the effect of so doing would be to increase or to reduce the amount of the fine.¹⁵³ The relevant provisions of such legislation should be

structured in such a way as to convey that they are founded upon the principle of equality of impact upon offenders of different means. The said provisions should also be without prejudice to the general discretion of the sentencing judge to impose a penalty that is appropriate and just having regard to all of the circumstances of the case.

3.13

In the light of the foregoing recommendation, the Commission also recommends that section 43(2) of the Criminal Justice Administration Act, 1914 should be repealed and there should be substituted for Order 23, Rule 4 of the District Court Rules, 1997¹⁵⁴ a rule which accords with the relevant provisions of the reforming legislation.¹⁵⁵

THE LAW REFORM COMMISSION

AN COIMISIÚN UM ATHCHÓIRIÚ AN DLÍ

APPENDIX: LIST OF LAW REFORM COMMISSION PUBLICATIONS