My Lords, I will make some observations about the noble Lord’s amendments in this group. I shall speak also to Amendments 28 and 29 in my name. It is worth reminding ourselves what the requirements of a DPA may be, as set out in paragraph 5(3). We have spoken as if the only requirement is likely to be a financial penalty. We talked about paying the price and buying one’s way out of trouble. However, a number of requirements may be included, not just the payment of a financial penalty. The words “financial penalty” appear in paragraph 5(3)(a). Paragraph 5(3)(b) refers to a requirement,
“to compensate victims of the alleged offence”.
Paragraph 5(3)(c) refers to a requirement,
“to donate money to a charity or other third party”.
Paragraph 5(3)(d) refers to a requirement,
“to disgorge any profits made by P from the alleged offence”—
no doubt to the person from whom they have been made, not to the prosecutor.
Paragraph 5(3)(e) refers to a requirement,
“to implement a compliance programme or make changes to an existing compliance programme relating to P’s policies or to the training of P’s employees or both”.
I wish to underline that that can be a very powerful tool for changing behaviour, but also an onerous tool. Frequently in cases where such a system exists, a monitor is required. The company then has to pay for an individual—the noble and learned Lord, Lord Woolf, was such a person—who will have full access to what it is doing and whose job it will be, from inside, to see that it is complying with the programme. That can be a very powerful tool for making sure that it changes its behaviour—but, as I said, also an onerous one.
Paragraph 5(3)(f) refers to a requirement,
“to co-operate in any investigation related to the alleged offence”,
and paragraph 5(3)(g) to a requirement,
“to pay any reasonable costs”.
I invite the Government to reconsider even their proposal, whether or not they accept the amendment of the noble Lord, Lord Marks. Possibly this is one of the more important amendments being considered tonight. I looked back at the Government’s response to the consultation on this offence. I noted from page 28 of the paper that more than half the respondents to the consultation did not agree that there should be a fixed minimum payment for a financial penalty. I wish to understand why, given that the majority of respondents took a different view, the Government have committed to this.
I am concerned about several things. First, if we impose this restriction, the DPA may be used in fewer cases, because it will become unattractive to agree to it. I recall that in a previous debate, in answer to a question from me, the noble Lord, Lord McNally, confirmed that the Government saw DPAs being used even in cases where the defendant did not admit guilt. In those circumstances, it becomes surreal to start talking about the financial penalty that would have been imposed on a defendant if they had pleaded guilty when they have not.
Secondly, the cost of the compliance programme—in terms not just of money but of obligation—can be sufficiently significant that it justifies saying, “No, you do not have to pay the same financial penalty”. I will also ask a question about financial penalties. That is why I read out the list. “Financial penalty” is only one requirement on it. I fear that by imposing this obligation, we may create a distorted view. For example, somebody may say: “What about the victims?” The answer may be: “I am afraid that I cannot afford to compensate them because you are making me pay a financial penalty which is commensurate with what I would have been fined, so there is no more money, or at least I am not giving you any more”. That is quite contrary to the principle in the criminal law that where financial measures are made, you treat the fine as the second thing, and if there is money for compensation, you try to get that paid first. I am concerned that this will have a counterintuitive and unsatisfactory effect.
I would avoid this sort of perverse incentive. I would avoid putting on the straitjacket. Of course I take the point about public confidence—although the more in this debate we invite the public not to have confidence, perhaps the more they will not have confidence. Perhaps we should start looking at this in a different way. My answer to this—as it was to the previous amendment—is that there is a double lock on a DPA in the form of the most senior prosecutors and the court. That is sufficient to ensure that what comes out of the DPA is satisfactory. I therefore do not support the amendment of the noble Lord, Lord Marks. My Amendment 28 is designed to have the effect that the financial penalty should not be more than the fine would have been, which is obviously perfectly reasonable.
Amendment 29 deals with a somewhat different but equally important point. It seeks to change the provision in sub-paragraph (5) that a,
“DPA may include a term setting out the consequences of a failure by P to comply with any of its terms”,
and convert it to an obligation not a permission. This is on the basis that the DPA should state what will happen to you if you do not meet its terms—that is what this is all about—in the interests of both the public and the person who is on the receiving end of the DPA. It is an amendment of a different order but I invite the Government to consider it.
9.15 pm