The Sentencing Council has published its definitive guideline on sentencing corporate offenders for fraud, bribery and money laundering offences, together with a response to its consultation on the draft guideline published in June 2013. The guideline is in response to the perceived scarcity of convictions for corporations that have committed economic crimes, as well as the absence of an established sentencing practice. The guideline aims to ensure consistent and appropriate sentencing for economic crimes committed by corporations and to ensure that they do not profit from the offence. Deferred prosecution agreements (DPAs) come into force on February 24, 2014 and the Sentencing Council notes that, while a DPA is not a criminal conviction, the guideline can be used to inform the level of financial penalty that forms part of a DPA, which it states should be broadly comparable to the likely fine that would be imposed following a conviction after a guilty plea. The guideline comes into force on October 1, 2014 and will apply to all corporate offenders sentenced on or after that date, irrespective of when the offence occurred. The guideline for individuals will be published later in 2014.

The guideline outlines a 10-step process to sentencing as follows:

  • Step one: The court must consider making a compensation order for any personal injury, loss or damage resulting from the offence.
  • Step two: The court must consider confiscation at the prosecution’s request. Only after compensation and confiscation have both been considered may the court consider imposing a fine.
  • Step three: When calculating the fine, the court must consider the offence category with reference to the culpability of the organisation and harm. The court must decide whether the corporation has shown a high, medium or lesser level of culpability in relation to the offence and will look at its role and motivation. Where there is insufficient evidence to establish the actual/intended gain, a percentage (10-20 per cent) of the revenue from the product/business area to which the offence relates will be arrived at. In large cases of fraud or bribery, in which harm is deemed to impact commerce or markets, a higher figure may be justified.
  • Step four: The court must identify the appropriate starting point and sentencing range, by multiplying the harm figure by a percentage figure reflecting culpability. In determining this figure, the court will consider whether there are any aggravating or mitigating factors, by reference to non-exhaustive lists of factors reflecting the "seriousness" of the offence and "personal" mitigation.
  • Step five: The court will adjust the fine upwards or downwards in order to ensure that it is proportionate to the corporation's size and financial position, the seriousness of the offence and any "unacceptable" harm the payment of a fine might cause to third parties.
  • Step six: The court will consider any factors that would indicate a reduction, such as assistance to the prosecution.
  • Step seven: The court will take into account any potential reduction following a guilty plea.
  • Step eight: The court will then consider whether to impose any further orders on the corporation, such as a financial reporting order.
  • Step nine: Where the corporation is being sentenced for multiple offences, the court must consider whether the total sentence is just and proportionate to the offences taken as whole.
  • Step ten: The court must give reasons for and to explain the effect of its sentence.

(Sentencing Council: Fraud, bribery and money laundering – Corporate offenders definitive guideline, 31.01.14)

(Sentencing Council, Fraud, bribery and money laundering – Corporate offenders: Response to consultation, 31.01.14)