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July 14, 2014

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Increased fining powers for Magistrates – the impact on business


Derek Millard-Smith, Legal Director (twitter @drivinglawyer) Hill Dickinson LLP

Increased fines for motoring offences filled the press at the start of June 2014 with many stories leading with the news that motorway speeding offences could soon attract seemingly massive fines of as much as £10,000. This fourfold increase on the current maximum of £2,500 is an obvious concern for individuals, but what could these changes mean for business? While the level of speeding fines is what grabs the headlines, the new legislation bringing these into effect, applies much more widely and raises the maximum thresholds for all offences that are dealt with at the Magistrates court.

What’s happening and when?

Sections 85 and 86 of Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into force at the end of May 2014, and have now laid the ground for increased Magistrates court fining powers. Exactly when these powers will come into effect is yet to be announced, but it seems imminent given that the legislation has now been drafted.

What’s new?

The new legislation will increase fining powers significantly in relation to a huge range of offences, not only those relating to personal motoring charges. As a general rule, if a criminal offence is punishable on summary conviction or is an either way offences it will be impacted. Areas covered include commercial and trade law matters, financial crime, health and safety and environmental. It is the first time since the early 1990s that the fine levels have been increased, so, while the changes might seem substantial, it is probably past time that they were reviewed.

According to the draft legislation the standard scale of fines is being increased at all levels:

Level 1 rises from £200 to £800

Level 2 rises from £500 to £2,000

Level 3 rises from £1,000 to £4,000

Level 4 rises from £2,500 to £10,000

Any fine which is currently capped at either the statutory maximum of £5,000 or at a higher amount will become an unlimited fine based upon the ability to pay, unless it is specifically excepted from this provision.

Where does the legislation apply?

The legislation applies only to Magistrates courts in England and Wales — other rules will apply in Scotland and Northern Ireland.

The legislation will not apply retrospectively so will have effect in relation only to offences committed after the relevant powers come into force.

What does this mean for businesses?

The legislation applies to criminal charges brought against corporate bodies in the Magistrates courts, so will have a direct impact on any corporate body being prosecuted for relevant offences.

Looking at the motoring offences, many of these are of course personal to the driver and the business will not be liable to pay them. However the expected increase does offer the business an opportunity to consider re-iterating the importance of driving legally to their workforce which should make for safer vehicles on the road.  From an individual’s perspective, fines are based on an individual’s means and a typical fine for speeding is equivalent to an individual’s net weekly pay, so those on average or below income will not be affected, however high earners taking home more than the previous maximum will feel it and therefore may think again before throwing caution to the wind on the open road.

Likewise, larger businesses will also be likely to receive higher fines than they will have done previously for the same offence due to the thresholds increasing and fines being based upon ability to pay — this may serve as a further deterrent to ignoring due diligence and essential corporate governance requirements.  

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